The European Union (EU) is channeling more than €200 billion (over US$179 billion) into supporting Europe’s digital transformation goals and objectives. The third yearly Communication on the State of the Digital Decade report, published this week, confirms that digital transformation is still a key priority for the EU and a driver for Europe’s competitiveness and strategic autonomy.
Since 2023, the Commission’s Joint Research Centre (JRC) has supported the identification of the EU funding that contributes to achieving the EU’s 2030 Digital Decade targets.
How is the EU investing in Europe’s digital transformation?
Latest estimates predict that €207 billion (21 percent of total analyzed funds) will support digital objectives until 2027. Of this, €177.5 billion contributes directly to achieving the EU’s Digital Decade targets.
The analysis shows that 27 percent of the Digital Decade target-relevant spending focuses on the digitalization of public services and 37 percent on the digitalization of businesses. The largest share of the budget has been allocated to the online provision of key public services, the uptake of digital technologies by firms and the basic digitalization of small and medium-sized enterprises (SMEs) and innovative scale-ups.
The analysis also covers the geographical distribution of Digital Decade spending across Member States. Italy and Spain are the countries with the largest budget allocations, with Spain in particular receiving the largest per capita, followed by Italy and Greece.
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Challenges hinder Europe’s digital transformation
The State of the Digital Decade 2025 report highlights key achievements and gaps in the areas of digital infrastructure, digitalization of businesses, digital skills and digitalization of public service.
The report shows that although there are certain advancements, the rollout of connectivity infrastructure, such as fiber and 5G stand-alone networks, is still lagging. More companies are adopting artificial intelligence (AI), cloud and big data, but adoption needs to accelerate.
Just over half of Europeans (55.6 percent) have a basic level of digital skills, while the availability of ICT specialists with advanced skills remains low and with a stark gender divide, hindering progress in key sectors such as cybersecurity and AI.
What’s more, the data shows persisting challenges such as fragmented markets, overly complex regulations, security and strategic dependence. Further public and private investment and easier access to venture capital for EU companies would accelerate innovation and scale.
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