Ireland has continued to improve in the European Commission’s Digital Economy and Society Index (DESI) rankings, and pushed up to fifth place in 2021.

We rank behind Denmark, Finland, Sweden and the Netherlands, and sit just above Malta, Estonia, Luxembourg, and Spain.

Ireland was ranked sixth in 2020 and 2018, seventh in 2019, and eighth in 2016 and 2017.

The 2021 Digital Economy and Society Index (DESI) tracks member state progress in digital competitiveness in:

• Human capital,
• Broadband connectivity,
• Integration of digital technologies by businesses, and
• Digital public services.

Pandemic effects are not visible in all data, and will become more apparent in 2022.

Mixed picture

The index reports some progress across all member states, but presents a mixed picture.

Despite some convergence, the gap between the EU's frontrunners and those with the lowest DESI scores remains large, the European Commission has said.

Margrethe Vestager (executive vice-president for a Europe Fit for the Digital Age) (small picture) said: “The message of this year's Index is positive. All EU countries made some progress in getting more digital and more competitive, but more can be done.”

She added that key investments through the Recovery and Resilience Facility will bring the best of digital opportunities to all citizens and businesses.

Thierry Breton (Commissioner for the Internal Market) added that more work was needed to ensure that European citizens and businesses, in particular SMEs, could access and use cutting-edge technologies that would make their lives better, safer and greener.

In all, 66% of Irish SMEs have basic ‘digital intensity’, compared with a 60% EU average. And 32% sell online, compared with an EU average of 17%. 

E-commerce makes up  27% of Irish SME turnover, compared with the EU average of 12%.

Information-sharing lag

Irish businesses are lagging in electronic information sharing (28% as against and EU-wide 36%), use of AI (14% versus 25%), and use of e-invoices (19% against 32%). 

Just 56% of individuals in the EU have at least basic digital skills.

The data shows a slight increase in ICT specialists in employment: in 2020, the EU had 8.4 million ICT specialists compared with 7.8 million a year earlier.

Given that 55% of enterprises reported difficulties in recruiting ICT specialists in 2020, this lack of advanced digital skills is a contributing factor in the slower digital transformation of businesses in many member states.

Digital decade targets

EU ‘digital decade’ targets are for 80% of the population to have basic digital skills; and for 20 million ICT specialists.

Only 19% of ICT specialists and about one-third of science, technology, engineering and mathematics graduates are female.

There has been a large increase in the use of cloud technologies, from 16% of companies in 2018 to 26% in 2020.

Large enterprises continue to lead the way in the usage of digital technologies. They use electronic information-sharing through enterprise resource planning (ERP) and cloud software much more frequently than SMEs (80% and 35% respectively for ERP; and 48% against 25% respectively for cloud).

Advanced-technology use struggles

Only a fraction of enterprises use advanced digital technologies (14% big data, 25% AI, and 26% cloud).

Current adoption of digital technologies is well below the EU's 2030 target that 90% of SMEs should have at least a basic level of digital intensity – up from 60% in 2020; and that at least 75% of enterprises should use advanced digital technologies.

At present, only a fraction of companies use big data, even in the best performing countries, as opposed to a target of 75%.