Europe’s digital divide widens as skills lag behind infrastructure growth

A new study examining Europe's digital readiness warns that the European Union's digital transformation could be hindered by uneven progress in digital skills and infrastructure. Despite steady advancements in connectivity and digital services, the gap between high-performing and lagging countries continues to expand, posing challenges for the bloc's competitiveness and its Digital Decade 2030 targets.

The research, titled "Digital Skills and Digital Transformation Performance in the EU-27: A DESI-Based Nonparametric and Panel Data Study", published in Economies, explores how disparities in digital competencies and ICT infrastructure influence member states' overall digital transformation performance. The study uses data from the Digital Economy and Society Index (DESI) to assess digital inclusion, infrastructure, and human capital across 27 EU countries from 2018 to 2024.

Digital skills as the cornerstone of Europe's transformation

The authors' analysis reveals a strong, statistically significant link between digital competencies and transformation performance, confirming that nations with more digitally literate populations consistently outperform those with lower skill levels.

Using a combination of nonparametric correlation, Friedman ANOVA, and panel regression methods, the study examines 12 key indicators within the DESI framework. These indicators encompass Internet use, digital inclusion, ICT specialists, and ICT graduates, all of which collectively define a nation's capacity to adapt to technological change.

The findings are clear: human capital remains the single most decisive factor in determining digital transformation outcomes. Countries such as Finland, Sweden, Denmark, and Germany lead Europe's digital revolution due to their strong ICT education systems, workforce adaptability, and advanced digital literacy. These nations also demonstrate high levels of innovation capacity, benefiting from sustained investment in both public education and private sector upskilling initiatives.

The study identifies Bulgaria, Greece, Cyprus, and Portugal as laggards, struggling to achieve the same momentum. These nations face structural limitations, including underdeveloped broadband infrastructure, lower investment in ICT training, and socio-economic inequalities that restrict access to technology. The result is a persistent digital skills divide, which threatens to slow down the EU's collective progress toward achieving its Digital Decade 2030 vision.

Importantly, the study also asserts that digital transformation is not a purely technological process. Even when infrastructure and digital tools are available, their potential remains underused unless populations possess the necessary competencies to leverage them effectively. This interdependence between skills and technology underscores the human dimension of Europe's digital future.

Infrastructure and innovation: The uneven digital map of Europe

The study further explores how infrastructure quality and innovation ecosystems influence national performance in digital transformation. According to the findings, Fiber-to-the-Premises (FTTP) coverage, Very High Capacity Networks (VHCN), and mobile broadband penetration rates have a measurable impact on both individual and enterprise-level digital participation.

Panel regression results confirm that network infrastructure is a critical driver of digital inclusion, enabling faster data exchange, advanced online services, and smoother integration of artificial intelligence, e-government platforms, and digital business tools. However, the research also notes that investment alone is insufficient, particularly when the benefits of digitalization are concentrated in urban centers while rural regions remain underserved.

The analysis reveals a pattern of regional polarization, where Northern and Western European countries enjoy near-universal broadband access, while parts of Southern and Eastern Europe lag behind. This spatial imbalance not only hinders economic growth but also deepens social inequality, as rural populations and small enterprises struggle to keep pace with the digital economy.

According to the authors, cohesive infrastructure policies are essential to bridging these divides. Public-private partnerships, EU structural funds, and national broadband strategies must focus on expanding high-speed Internet access to remote and economically disadvantaged areas. Moreover, infrastructure upgrades must be coupled with policy mechanisms that promote digital entrepreneurship, ensuring that technological development translates into economic resilience and job creation.

The study also highlights that innovation ecosystems, particularly those connecting academia, government, and industry, play a key role in sustaining digital momentum. Countries with robust R&D institutions and active digital policy frameworks tend to exhibit higher DESI scores, indicating that knowledge diffusion and technological adoption move hand in hand.

Yet, even among the leaders, challenges persist. The rapid acceleration of AI and automation technologies demands continuous adaptation, and the study warns that Europe's digital success will depend on its ability to evolve from a reactive to a proactive innovation model, where skills and policy anticipate disruption rather than merely respond to it.

Policy, education, and the road to digital equity

EU's digital transformation cannot be achieved through infrastructure expansion alone, the study asserts. Instead, policymakers must adopt a multi-layered approach, combining investment in technology with strategies for education, inclusion, and governance.

Education emerges as the linchpin of Europe's digital resilience. The study calls for expanded ICT curricula, vocational retraining programs, and lifelong learning initiatives to equip citizens with the competencies required for an AI-driven economy. In countries where education systems have already integrated coding, data analysis, and digital citizenship into early learning, digital transformation performance is markedly higher.

The study also points to digital inclusion policies as a mechanism for strengthening cohesion. Gender gaps, generational divides, and socio-economic barriers must be addressed through targeted interventions, ensuring equal participation in the digital economy.

From a policy perspective, the authors recommend a series of strategic actions:

• Align national education systems with EU digital skill frameworks, ensuring consistent standards across member states.
• Incentivize businesses to invest in employee digital upskilling and reskilling programs.
• Promote cross-border cooperation in data sharing, digital infrastructure planning, and innovation funding.
• Monitor and evaluate digital transformation metrics regularly to identify disparities and allocate resources efficiently.

In addition, the research identifies the need for a stronger link between policy and performance measurement. By leveraging DESI indicators as benchmarks, the EU can ensure that digital transformation remains evidence-based and inclusive.

Without decisive policy alignment and equitable investment in human capital, the digital divide could evolve into a structural divide, undermining Europe's competitiveness on the global stage.