Human capital is one of the four main thematic areas described in the "Digital Economy and Society Index"(DESI). The annually issued report is the result of the European Commission's monitoring of the progress of European Union member states on digitization since 2014. The diagnoses presented there draw the attention of national and EU authorities to elements that should be prioritized in planned activities. What does the picture of Europe's digital society look like in the latest report? You can find out in this article.

"In the future, we must rely on digitally strong and digitally skilled citizens, a digitally skilled workforce and digital experts. Decisive action will be required to successfully deal with demographic trends and address the existing shortages of skilled labor in the context of digital and green transformation."

‍

The human capital section of the DESI 2021 report begins with such words, thus pointing the way forward for at least the next decade. And what is the starting point, i.e. the current state of the digital society in Europe?

Human capital in Europe - general characteristics

In the DESI 2021 report, the human capital index includes two components - "internet literacy" and "advanced skills and development." The first is based on the frequency and complexity of use of digital devices and the Internet. The second incorporates information on the number of information and communications technology (ICT) specialists, graduates of such fields, and companies investing in employee development in this area.

‍

Digital skills in the EU

(percent of citizens, 2015-2019)

Having at least basic digital skills

Having more than basic digital skills

Having basic IT skills

Source: European Commission, DESI 2021

‍

Today, just over half of Europeans have basic digital (56 percent) and IT skills (58 percent). At the same time, a great disparity is apparent between younger (up to 24 years old) and better educated people, and those over 55 and retired. Among the former, basic skills are possessed by more than 80 percent, while among the latter only about 30 percent. The disparity between urban and rural residents is also apparent. There, basic skills are possessed by 62 and 48 percent of people, respectively.

‍

Human capital in EU member states

(scale of 0-100)

The ability to use the Internet

Advanced skills and development

Source: European Commission, DESI 2021

‍

Using the Internet

The question of how Europeans use the Internet looks much better than their digital capabilities. 91 percent of all households in Europe have access to the web. 86 percent of citizens use the Internet regularly (at least once a week), and nearly 80 percent do so daily or almost daily.

‍

In Denmark, Luxembourg and Sweden, only 1 percent of citizens have never used the Internet. However, there are also countries such as Greece and Bulgaria, where no contact with the web is declared by about 20 percent of the population.

Barriers to Internet access

As the DESI 2021 report shows, there are four main reasons why Europeans do not have access to the Internet at home. Two come to the fore: lack of need or interest and insufficient skills. These were indicated by 45 percent of respondents each. A quarter of respondents pointed to the high cost of equipment and 23 percent to the high price of services.

ICT professionals and graduates

In the European market, as in the rest of the world, there is an apparent shortage of workers skilled in ICT. 55 percent of companies trying to hire someone with such skills in 2020 reported a problem finding a suitable candidate. The shortage is felt even more acutely in currently key areas - cyber security and data analytics. 

‍

Number of ICT specialists employed in the EU
(2013-2020)

Source: European Commission, DESI 2021

‍

This is also compounded by a lack of appropriate specialized educational programs in artificial intelligence, cyber security and quantum engineering. In this context, it is not surprising that more than 70 percent of companies consider the lack of people with the right digital skills as an obstacle to further growth.

‍

In 2020, the European Union employed 8.4 million ICT professionals, accounting for 4.3 percent of the total workforce. 3.1 million (nearly 37 percent) of them were employed in two member countries - Germany and France.

‍

ICT specialists in the EU

(percent of all employees, 2015-2020)

Source: European Commission, DESI 2021

Women in ICT

An aspect highlighted in the DESI 2021 report is the percentage of women employed in ICT specialist positions. In the European Union as a whole, they represented in 2020. 18.5 percent of specialists. They account for the largest share, almost ⅓, in Bulgaria. By contrast, in countries such as the Czech Republic, Malta and Hungary, almost 9 out of 10 ICT specialists are men.

‍

Women ICT professionals in the EU
(percent of all ICT professionals, 2015-2020)

Source: European Commission, DESI 2021

ICT graduates

Growing market demand for workers with the right digital skills is resulting in an increasing number of graduates from relevant schools and majors. However, their number is still too small to fill all vacant positions.

‍

The latest figures show that across the European Union, graduates of ICT schools and majors accounted for 3.9 percent of all school leavers. Their highest percentage was in Estonia (8 percent), Ireland (7.8 percent) and Finland (7.4 percent). At the same time, they accounted for less than 3 percent of graduates in Belgium, Cyprus, Portugal and Italy.

‍

Graduates of ICT schools and faculties in EU member states

(percent of all graduates)

Source: European Commission, DESI 2021

Improving digital skills of employees

For some companies, the way to have adequately digitally qualified employees is to provide them with training. ⅕ of all companies in the European Union provide ICT courses and training to their employees. In the SME segment, this is 18 percent of companies, while among large companies the percentage is as high as 68 percent.

‍

Companies providing ICT training to employees in EU member states

(percent of all companies)

Source: European Commission, DESI 2021

‍

Among countries, the clear leader is Finland, where 38 percent of companies provide training. Belgium, Denmark and Sweden also score above 30 percent. At the other end of the scale are Bulgaria and Romania, where such activities are undertaken by 7 and 6 percent of companies, respectively.

Digital Compass 2030 - plans for the future

In March 2021. The European Commission adopted a new development strategy in the socio-economic sphere - Digital Compass 2030. It sets out the main directions for Europe's digital transformation.

‍

In terms of basic digital skills, the European Union's goal for 2030 is for a minimum of 80 percent of the population to have them. However, this will be an extremely difficult task, given that in the 2015-2019 period the increase was only 0.9 p.p. per year. (from 54 to 56 percent).

‍

Plans for the number of ICT specialists are also ambitious. According to the Compass, by 2030 there should be at least 20 million of them working in EU member states. Taking into account the growths of previous years, achieving the goal will not be an easy task in this regard either.