EUROPEAN COMMISSION

Brussels, 16.6.2025

COM(2025) 290 final

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS

State of the Digital Decade 2025: Keep building the EU's sovereignty and digital future

{SWD(2025) 290 final} - {SWD(2025) 291 final} - {SWD(2025) 292 final} - {SWD(2025) 293 final} - {SWD(2025) 294 final} - {SWD(2025) 295 final}

1.Introduction 

The EU’s digital transformation is a central driver for ensuring that Europe remains competitive, resilient, reduces its excessive dependencies and enhance its technological sovereignty, while reinforcing its strategic autonomy 1 . To this effect, the Digital Decade Policy Programme (DDPP) 2 , adopted in 2021, has provided the EU with a structured, strategic and legally binding governance framework, enabling it to navigate an increasingly volatile geopolitical, economic, and technological landscape. This demonstrates the EU’s determination and commitment to decisive, long-term action, driving forward its vision for a digitally transformed Europe.

In the face of today’s geopolitical challenges, the DDPP has become more vital than ever. Strengthening Europe’s technological sovereignty and resilience is key to protecting strategic interests and reinforcing the EU’s global leadership and competitiveness. The DDPP plays a crucial role in this context, fostering coordination among Member States, aligning their efforts, and addressing the urgent need for an accelerated digital transformation.

Through the Digital Decade, the EU sets and monitors digital objectives and targets, aligns initiatives through national roadmaps, and enhances joint investment. This demonstrates the EU’s determination and commitment to decisive, long-term action, driving forward its vision for a digitally transformed Europe. Furthermore, the Digital Decade fosters cooperation across EU, Member State, regional and city levels, accelerating digital transformation and supporting the implementation of the Competitiveness Compass 3 . By adopting a broader, integrated perspective, the Digital Decade connects competitiveness, sovereignty, sustainability and democratic values. It underlines how the digital transformation is not only a matter of fuelling innovation and growth but also of fostering the most important strategic assets for Europe’s sovereignty, stability, and global influence, as illustrated in Figure 1.

This Communication describes the State of the Digital Decade in 2025, examining relevant digital policy developments and progress with the EU’s digital transformation since the last report published in 2024. It also lays the groundwork for the review of the DDPP in 2026, with possible changes to targets, objectives and governance in view of technological and EU policy developments.

More detailed analyses, including EU level recommendations, are presented in the Annexes to the Communication and in supporting documents, specifically Staff Working Documents, Eurobarometer and studies 4 which, all together, constitute the 2025 State of the Digital Decade report.

In particular, this Communication is accompanied by 28 Annexes:

·Annex 1, an extensive analysis of the progress made towards the Digital Decade objectives and targets, and includes horizontal recommendations addressed to all Member States;

·Annexes 2-28, summaries of the analysis made for each of the 27 Member States, including country-specific recommendations.

Figure 1: The Digital Decade and EU digital priorities

2.Tracking the EU’s Digital Decade overall progress

a.2025: a defining year for the EU’s future

In 2025, the global Artificial Intelligence (AI) revolution is gaining further momentum with breakthroughs in foundational technologies, which are reshaping innovation frontiers, redefining competitiveness, and changing people’s everyday lives. Workers now use AI tools to boost productivity – from factory-floor assistants in manufacturing to AI office software development – streamlining tasks and supporting decision-making. Meanwhile, autonomous car fleets are starting to scale, notably in the US and Asia, with self-driving taxis and delivery services setting new standards for urban mobility and economic efficiency. Furthermore, AI is revolutionising healthcare, making it more effective, accessible, and economically sustainable. AI is also a game changer for the green transition. enabling real time environmental monitoring, underpinning circular economy, streamlining industrial processes, and supporting smarter resource management across sectors such as water, energy, transport, and agriculture. Amid these rapid advances, a key emerging issue is how to harness the power of AI through effective policy and democratic governance to advance societal progress—promoting broad-based prosperity, inclusive growth, and public benefits 5 . 

Establishing EU leadership and positioning Europe as a true AI continent is a paramount priority, requiring a comprehensive set of assets, capabilities, and infrastructures — from advanced skills to robust ethical frameworks — as illustrated in Figure 2. It includes notably highly efficient digital infrastructure – from connectivity to quantum computing – to support the current surge in AI innovation. A major boost in computing power, data storage, and fast, secure, low-latency connectivity is also essential to train foundation models and develop vertically integrated AI applications.

Figure 2: The seven pillars for becoming an AI leader and the role of the Digital Decade

These foundational technologies are crucial for defence and cybersecurity, enabling real-time data analysis, battlefield situational awareness, autonomous decision-making, cryptanalysis, secure communications and next-generation cybersecurity solutions.

This has spinoff value, as 10% of the EU’s defence spending is expected to be channelled into European deep tech, potentially generating an annual market impact of EUR 245 billion, as a powerful catalyst for innovation and industrial renewal 6 . Meanwhile, geopolitical shifts are turning the EU's digital supply chain dependencies into strategic vulnerabilities. As supply chains are increasingly weaponised through overreliance on high-risk-vendors or restrictions and tariffs, technological sovereignty has moved to the forefront of the EU agenda, driving the need for a more coordinated industrial policy, deeper public-private partnerships, and targeted investments with the objective of positioning the EU not as a mere passive consumer of global technology, but as a proactive, competitive force, spearheaded by its digital and industrial transformation. Excessive dependence on foreign entities is also exposing the EU’s financial system’s resilience, including in critical areas such as payment systems and crypto assets, which is becoming increasingly vulnerable to external influence and disruptions, sometimes beyond the reach of European regulation. The prospect of a digital euro is becoming a cornerstone of Europe’s digital finance strategy and economic security, strengthening Europe’s financial ecosystem, innovation capacity and strategic autonomy.

The growing sophistication of the threats we face – including disinformation, cyberattacks, deepfakes, and algorithmic manipulation – requires widespread digital literacy and a skilled ICT workforce. These threats, whose creation and dissemination are amplified by AI and online platforms, also have the potential to distort electoral outcomes, deepen societal polarisation, erode public trust in democratic institutions and compromise critical infrastructure. They also challenge the rule of law by undermining the integrity of democratic processes, weakening institutional accountability, and disrupting the enforcement of legal norms online — particularly when harmful or illegal content spreads unchecked across platforms. Additional risks are emerging from complex use patterns of algorithms and digital tools, such as online platforms, and their impact on children’s safety and wellbeing 7 . If left unchecked, these online threats could put the very foundations of democracy at risk – undermining the rule of law and disrupting evidence-based public debate and policymaking. 

Events in 2025 have thus underscored the urgent need for Europe to innovate, compete and grow while assuming greater responsibility for its strategic autonomy, resilience, security and defence, developing its own sovereign technologies not just as a matter of competitiveness, but as a strategic imperative.

b.From metrics to meaning: what 2024 reveals about the EU’s digital trajectory

Since July 2024, the EU has shown uneven progress across DDPP targets and objectives. Certain areas, such as the deployment of edge nodes, the availability of e-Health services, and ‘basic’ 5G radio coverage, are demonstrating comparatively high levels of target achievement. In contrast, several key domains – particularly foundational digital technologies such as AI, cloud services, data analytics, along with ICT specialists and basic digital skills – are showing deeply unsatisfactory progress. While improving at a slow pace, the digitalisation of public services and the roll out of Very High-Capacity Networks (VHCN) are showing signs of increased maturity, while deployment of Fibre to the premises is progressing but not enough to reach 100% by 2030.

More generally, the monitoring of general objectives shows that the EU is still facing major challenges to harnessing the digital transformation for its productivity and competitiveness. The deployment and integration of these technologies across the EU economy are still too limited, while regulatory fragmentation and administrative complexity continue to pose significant challenges for start-ups, SMEs, and innovators 9 . The EU still lacks sovereign, pan-European digital connectivity and cloud computing infrastructure, as well as integrated management systems needed to support its development and a good level of security. With the increase in cyberattacks, which surged by 150% in 2024, security has become paramount. This need closely aligns with the priorities of most European citizens: around four out of five Europeans think that improved cybersecurity and stronger protection of online data and safety would significantly facilitate their daily use of digital technologies 10 . A widespread lack of digital skills remains a systemic barrier to the EU’s digital transformation. In particular, persistent shortages of ICT specialists are slowing progress towards the Digital Decade targets in key areas like AI, cybersecurity, and semiconductors. This shortage is compounded by the continuous gender imbalance among ICT specialists.

Figure 3: Taking stock of KPIs progress toward 2030 11   12

Meanwhile, the EU’s digital future is becoming increasingly dependent on stable energy production. In 2024, global electricity demand grew by more than twice the annual average increase over the past decade. Global Data centre electricity consumption is set to more than double to around 945 TWh by 2030, equivalent to Japan’s current total electricity consumption 13 . The data centre industry must grow and evolve to accommodate inter alia the explosive growth and evolution of AI, generative AI and future AI iterations already in the making. This trend alone is set to represent 40% of the total energy demand in 2030 for data centre capacity 14 . Exponentially rising energy demands are rapidly outpacing the development of clean and reliable energy supply and grid capacity across the EU. This discrepancy is emerging as a potential significant barrier to the scaling of key digital technologies and delaying the EU’s ability to fully leverage AI and data-driven innovation for economic competitiveness. These trends further underscore the imperative to strengthen the alignment between the green and digital transitions, as a key driver of the EU’s long-term competitiveness and security  15 . 

In order to see current perspective of achieving the 2030 targets, Figure 4 below tracks the progress of KPIs toward their EU targets, benchmarking achievement levels against projected timelines. The horizontal axis displays the target year for each KPI (based on the baseline trajectories where available), while the vertical axis shows the percentage of the target already attained as of 2024. The chart categorises KPIs into three groups: those ahead of schedule, on track (approaching targets), or delayed (falling below expected progress).

Figure 4: Tracking KPIs progress and expected timeline

c. Halfway through the Decade: momentum is building among Member States and EU institutions, with some early signs of concrete progress

Two years after its entry into force, the DDPP is now in full implementation mode with concrete and ambitious action taken by the EU and Member States.

Collective ownership by all Member States of the Digital Decade targets and objectives is essential to achieving them and ensuring a consistent, impactful, and inclusive digital transformation across the EU. Member States are proactively implementing the DDPP, which is first and foremost a collaborative framework for Member States to work together, align and pool resources on digital policy.

All Member States have developed National Digital Decade strategic roadmaps (National Roadmaps), outlining the policies, measures and actions being taken from 2024 onwards to drive the EU’s digital transformation from 2024 on. The adoption of the roadmaps represents a significant milestone, as Member States are collectively committing to a total of 1 910 measures with a total investment of EUR 288.6 billion, comprising EUR 205.1 billion from public budgets (equivalent to 1.14% of the EU’s GDP).

Figure 5: Public budget intensity in Member States Roadmaps 16  

Following the 2024 State of the Digital Decade report recommendations, 21 Member States have updated their National Roadmaps and added roughly 20% of new measures 17 . Over half of the measures indicating a timespan are planned to end in 2026, likely reflecting national budget cycles and the conclusion of the Recovery and Resilience Facility (RRF) plans and investments, suggesting a potential decline in support starting in 2027. 

Member States are demonstrating their commitment to collective action through the implementation of annual recommendations. Member States addressed 57% of the 306 country-level recommendations issued by the Commission in 2024, either by implementing significant policy changes (12%) or making some changes (45%) through new measures. 19 Member States have addressed at least half of their recommendations through new measures. Among the EU-level recommendations, over 45% show either notable (35%) or significant progress (10%), with strong results in the areas related to the development of human-centred AI and safeguarding of digital rights and principles. On the other hand, 48% of the EU-level recommendations issued in 2024 have only seen limited progress, and 7% show no progress. This mixed picture highlights that, while there is clear momentum toward achieving some of the Digital Decade targets and objectives, there remains a continued need for structured and bolder policy action to accelerate and improve EU’s trajectory in the Decade.

Figure 6: National Roadmaps: budget breakdown per target and general objective 18  

Through the European Digital Infrastructure Consortia (EDICs), concrete multi-country cooperation is advancing to develop large-scale projects that a single Member State cannot tackle alone, covering key strategic areas such as AI, smart cities, health, mobility, and agri-food. Three EDICs have been established in 2024: the Alliance for Language Technologies EDIC, the Local Digital Twins towards the CitiVERSE EDIC and the EDIC for European Blockchain Partnership and European Blockchain Service Infrastructure (EUROPEUM-EDIC).

Member States are also supporting Important Projects of Common European Interest (IPCEIs) in the digital field. In 2024, IPCEI on Cloud Infrastructure and Services (CIS) was launched, with the participating companies advancing on their projects and the IPCEI ecosystem extending to include new indirect partners. In 2024, several Member States decided to enter into the design phase of three potential IPCEI candidates in the area of digital: one focusing on innovative AI services, one on advanced semiconductor technology applications and one on deploying computing infrastructure. Work is ongoing between the interested Member States and the Commission to shape those IPCEI candidates. 

The Digital Decade Board (DDB), which brings together national representatives, has emerged as a key platform for coordination and exchange on issues related to digital transformation. It is well positioned to take on a growing role in advancing the EU’s digital transformation by strengthening cooperation, facilitating the implementation of digital policies, and supporting the development and adoption of solutions that simplify processes and reduce administrative burden, as well as advising on how to better link the targets and objectives with financing possibilities.

Furthermore, the Digital Decade Best Practice Accelerator, launched in July 2024, has been instrumental in further fostering collaboration among Member States through a combination of regular workshops and a dedicated online platform. This platform serves as a central hub for the exchange of information, challenges, and best practices related to achieving the goals of the Digital Decade. It features a repository that has compiled 52 best practices and organised eight workshops focusing on thematic clusters (Digital skills, Green IT, Tech Uptake, led respectively by Slovenia, France and Finland, Belgium), which enable in-depth exploration of specific areas crucial for the digital transformation of the EU. Additionally, discussions are ongoing for the launch of three new clusters in 2025, focusing on reducing administrative burden, digital rights and principles, and digital sovereignty.

The monitoring the Declaration on Digital Rights and Principles 19 shows increasing commitment among Member States to take action, with over 2000 initiatives – 80% of them led by government organisations – identified across the EU. Member States are most active in the area of digital education, training and skills, as well as in working towards a better protected, safe and secure digital environment.

Finally, cities are vital enablers of the EU’s Digital Decade, serving as key implementation hubs that bring digital transformation directly to citizens, public services, and businesses—especially SMEs—through their proximity, innovation ecosystems, and local leadership. The report shows that there is still further potential to be unlocked through deeper cooperation with cities as part of EU’s digital governance, investment in local digital capacity, and alignment of local strategies, leveraging tools such as local observatories, and multi-country projects such as LDT-CitiVERSE.

d. Despite recent efforts, public and private investment levels are not yet fully aligned with the Digital Decade’s ambition and scale

In recent years, the EU has achieved some progress in strengthening its digital infrastructure and technological capabilities. Significant investments have been made in strategic areas, notably through initiatives like the Digital Europe Programme. Some examples of these achievements include:

·Over the past eight years, eight supercomputers have been acquired, three of which ranked among the world’s top 10 fastest supercomputers and were also recognised as being among the greenest and most energy-efficient.

·More than 150 European Digital Innovation Hubs are currently operational across the EU, covering nearly 90% of European regions, providing important support to both public and private organisations, in particular SMEs 20 . 

·The European Digital Identity Wallet, which is currently being piloted across the EU, will provide a secure and user-controlled tool enabling citizens to prove their identity, share documents, and sign digitally.

·In the semiconductor sector, four state-of-the-art pilot lines have been launched to test and validate advanced chip technologies.

In line with the priorities outlined in the Competitiveness Compass 21 , on 9 April 2025 the Commission adopted the AI Continent Action Plan, outlining a set of actions relating to computing infrastructure, data, the development of AI algorithms and adoption, skills, and regulatory simplification. The action plan signals the EU’s ambition to become more competitive on the global stage by harnessing the potential of AI technologies and fostering strategic investments such as the AI Gigafactories, as well as launching targeted initiatives like Invest AI to scale public and private financing and Apply AI to accelerate the deployment of trustworthy AI across key sectors of the economy and public services.

Despite those achievements it is clear that continued and reinforced effort is essential to meet the scale of the digital transition and secure Europe’s technological sovereignty.

As the EU reaches the midpoint of its Digital Decade, this report—together with recent estimates from institutions including the EPRS, ECB, and the Draghi report using different scopes and methodologies 22  show that the EU’s digital objectives will not be achieved without a transformative shift in its investment landscape. The Draghi report sets out that the additional effort of the EU should amount to EUR 150 billion a year for digital technologies. Similarly, the European Central Bank (ECB) stresses the importance of focusing EU finances on future-oriented investments, warning that failure to scale digital capabilities could compromise the EU’s long-term competitiveness and financial stability.

According to estimates by the European Parliamentary Research Service, only advancing high-tech digital innovation (HTDI) alone across Europe will require between EUR 212 and 380 billion annually 23 , more than triple the EU’s current yearly total investment in digital technologies and infrastructure. A large part of the investment needs will have to come from private investments, mobilised through a deepened Capital Markets Union 24 , increased risk financing, and industrial partnerships 25 (see below). A quarter of that estimate will need to come from public channels, including national budgets, EU programmes 26 , at a time when fiscal space is constrained across many Member States and medium-term budgetary pressures remain elevated, despite the increased flexibility of the new EU fiscal framework. 

Strategic public procurement, notably thanks to the forthcoming revision of the Public Procurement Directives, will be crucial to achieve the EU’s objectives on resilience, innovation, simplification, and EU preference through public investment. When combined with measures outlined in the AI Continent Action Plan and the upcoming Cloud and AI Development Act and the support of GovTech 27 , this revision will ensure that highly critical public sector develops highly secure, EU-based cloud capacity. Another unexplored opportunity is to make digitalisation eligible for sustainable (climate) financing demonstrating the energy and material efficiency gains of digitalisation in major industries, building notably on the recent work of the European Green Digital Coalition 28 .

Analyses also converge on the critical areas where investment needs to be channelled to, from the roll-out of advanced connectivity infrastructure in fibre, 5G – in particular stand-alone and mid-band, including full coverage of transport corridors 29  – to the development of next-generation semiconductors, including AI-specific chips, the scaling of secure and sovereign cloud and data infrastructure, the advancement of trustworthy AI and quantum computing technologies, and the development of robust cybersecurity capacities. Equally important is the sustained investment in training more digital technology specialists, digital literacy and upskilling, without which the benefits of innovation will remain inaccessible to many regions and sectors. 

The cloud computing capacity gap between Europe and competitors like the US and China is expected to widen, unless significantly more capital is directed towards expanding edge and cloud computing capabilities. This report also identifies more precise mismatches between digital priorities and the funding allocated through EU public instruments (cf. figure 7), showing notably that insufficient attention is paid to the general objectives and the digital principles, skills development, foundational technologies, gigabit connectivity infrastructure deployment and digitalisation of SMEs. In this context, it is crucial to focus and align public spending as much as possible with strategic priorities and maximise its impact and efficiency 30 . 

Structural obstacles remain to foster the financing of the EU’s digital transformation. On the public side, persistent fragmentation of national strategies, limited coordination at EU level, and slow absorption of EU funds impede the effective deployment of available resources. There is also a need to better coordinate action, in order to channel more public funding into sovereign digital assets, including trusted clouds, AI models, chips and cybersecurity while fostering joint projects between Member States. 

Mobilising private capital at scale will be critical to bridge the gap—through a deeper Capital Markets Union, better-aligned public-private instruments, and stronger mechanisms for de-risking and blended finance. Recent analysis by the ECB 31 also highlights the need to focus not only on headline investment targets but also on improving delivery conditions, investment absorption, and project quality.

The fragmentation and underdevelopment of the EU’s financial markets, along with the tendency in the EU to avoid high-risk endeavours, still limit the flow of investment into high-growth and innovative sectors, with a large share of household savings not channelled towards productive investment. The EU also lacks a mature venture capital ecosystem, which limits access to finance for high-growth and innovative companies 32 . The EU accounts for only 5% of global Venture Capital (VC) fundraising in innovation, compared to 52% for the US and 40% for China 33 . European AI startups raised about EUR 11 billion in venture capital funding in 2024, more than six times less than in the US (about EUR 71 billion) 34 . These gaps are particularly critical for high-risk, high-impact investment in deep tech, where traditional bank financing is often insufficient. For cybersecurity, EU venture capital totalled just EUR 814 million 35 concentrated in a few Member States, compared to EUR 15 billion in the US. Leveraging public resources to crowd in private investment – particularly through risk-sharing mechanisms and financial instruments – is therefore essential to scale innovation across the continent. 

Figure 7: Comparison between gaps identified and EU funding from selected programmes in 2020-2027 (JRC estimates) 36

* 69% is referred to FTTP coverage; 82% to VHCN coverage.

** 82% is referred to digital public services for citizens; 86% to digital public services for businesses.

The report’s findings also underscore the need to establish a larger pool of public capital to leverage private investment in the European economy and reduce financing costs for European businesses. Decisive action is needed to significantly increase the funding opportunities for all EU businesses, from the start-up phase right through to more mature companies building on the recently adopted EU Startup and Scaleup Strategy 37 . The main challenges to be addressed include the reinforcement and deployment of blended finance tools to de-risk private investment (e.g. InvestEU, expected to mobilise more than €372 billion of public and private investment through an EU budget guarantee of €26.2 billion), as well as the establishment of a Savings and Investments Union 38  to scale private investment across borders, including through the simplification of Initial Public Offering (IPO) pathways and the unlocking of pension fund capital for digital investments, to accelerate scale-up trajectories.

Next to investments, reforms play a crucial role for the advancement towards the digital transition. The Recovery and Resilience Facility (RRF) was designed with this dual focus, supporting not only investments but also structural reforms, in connection with the European Semester 39 . In the digital domain, on a total of about 2 500 milestones and targets, about 600 (24%) qualify as reforms 40 . They include, for instance, reforms to facilitate network deployment, strengthen cybersecurity, to modernise labour market policies and education systems, or implement the once-only-principle.

In their national roadmaps, Member States were invited to also include 'regulatory and reform-oriented measures' 41 , but so far, they have provided little information on which roadmap measures qualify as reforms. As a first step, the relevance of reforms is reflected in the recommendations issued in this report at both horizontal (please see Annex 1) and Member State level, such as establishing enabling framework conditions and ecosystems that support commercialisation and technology transfer, in the area of digitalising SMEs and start-ups as well as the uptake of advanced technologies.

Finally, the Technical Support Instrument (TSI) has provided targeted expertise and capacity-building assistance to Member States in designing and implementing reforms, including in the area of digital. For instance, with the 2025 flagship ‘ComPAct - Capacity for Europe’s Digital Decade’, public administrations in the Member States get support in creating the technological foundations for data-driven policies that integrate interoperability and AI technologies.

3. Addressing digital weaknesses and excessive dependencies

While global access to innovative and affordable technology, infrastructure and services is vital for EU competitiveness, the EU’s reliance on foreign digital technologies, infrastructure and services exposes it to several risks. While digitalisation is a driver of innovation, productivity and global competitiveness, persistent strategic dependencies threaten the EU’s economic security and technological sovereignty. Excessive dependencies are particularly acute in the areas of semiconductors, cloud and data infrastructure and cybersecurity technologies.

The EU still lacks a significant domestic semiconductor manufacturing capacity. It lacks capacity to manufacture advanced node fabrication (below 10nm), essential for both civilian and military applications 42 . This capacity is mainly concentrated in East Asia and in the US: 80% of the EU companies’ suppliers are headquartered outside the EU, with 35% located in the US, 12.4% in Taiwan, 11.7% in China or Hong Kong and 10% in South Korea 43 . In the event of geopolitical turmoil in East Asia affecting Taiwan – currently producing over 90% of the world’s most advanced chips – particularly with the intention of controlling its semiconductor industry (most notably TSMC, the world’s most advanced chipmaker), the consequences would be severe. Most European industries – from automotive to aerospace, from medical equipment to defence – would face critical production deadlocks.

Foundational AI model development is also dominated by the US, notably because of the US access to vast computing power through US hyperscalers who are also devolving much of their capital investments into cloud development. This situation presents several risks for the EU, starting with the lock-in of users to proprietary ecosystems, as well as the critical risk of EU user companies and citizens being exposed to the application of US laws such as the US Cloud Act. Currently, the largest EU cloud operator holds a mere 2% share of the EU market. This trend is expected to persist, with US hyperscalers projected to drive 65% of data centre demand in Europe by 2028 44 . Cybersecurity technologies taken up in Europe often originate from outside the EU, potentially exposing European networks to foreign influence or backdoor vulnerabilities.

Risks have also been identified in quantum technologies, particularly regarding the potential transfer of expertise through unmonitored foreign direct investment, talent poaching and collaborations lacking proper safeguards. On the other hand, it is also to be considered that the EU possesses significant strengths and leads in quantum science and research excellence, has a highly skilled workforce as well as one of the world's most dynamic startup ecosystems in quantum technologies. Initiatives such as Quantum Flagship, the Chips Joint Undertaking, and the new Quantum Pilot Lines also build on these strengths. Safeguarding these assets while fostering innovation remains a priority for sustaining Europe's competitiveness in this critical domain. 

Europe is not yet harnessing the full power of open source 45 - a public good that can be freely used, modified, and redistributed allowing all to use the technology at will - and the vibrant community of European open source developers, which could be an important avenue for tech sovereignty to reduce Europe’s dependencies from third countries. Digital dependencies and vulnerabilities relating to research security intersect with broader economic security concerns, especially in the current geopolitical context. Key risks include the weaponisation of dependencies and economic coercion for political leverage.

In addition to this, no pan-EU digital platform is today among the most visited in Europe and ‘European citizens are served mostly by non-EU commercial platforms’ 46 . These large platforms are often a gateway for a large number of business users to reach end users everywhere in the Union and control important ecosystems in the digital economy. Their position and the rules they set on their platforms can lead to unfair practices conditions for businesses using them, and harm users, as well as limit contestability and create an uneven playing field for other companies. Another concern in the digital landscape is the trade and exchange of illegal goods, services and content online, as well as the misuse of online services to amplify the spread of disinformation and for other harmful purposes. Modern connectivity is no longer a collection of separate technologies – satellites, submarine cables, mobile and fixed networks – but a deeply interconnected ecosystem. To respond to the growing demand for critical, low-latency applications - such as autonomous vehicles and remote surgery, increasingly higher amounts of data 47  need to flow seamlessly across all these domains, as disruptions in one can affect the entire network’s performance and security. This will require in the near future a global approach ranging from orbital assets to terrestrial infrastructure, linking together in a unified, resilient, and globally optimised system. And for that we need to build the basis now, with full coverage of fibre and accelerated development of stand-alone 5G. The resilience and security of Europe’s connectivity infrastructure is increasingly challenged by the geopolitical and technological complexities of today’s digital landscape. The full implementation of the EU 5G Toolbox and the promotion of standalone 5G networks are essential for mitigating security risks associated with mobile connectivity. Furthermore, core infrastructures like submarine data cables remain vulnerable to physical sabotage, risks and challenges that are addressed by Cable Security Action Plan 48 . In parallel, the EU’s autonomy in the field of communications is undermined by the EU’s heavy reliance on non-European satellite systems, a critical dependency starkly revealed during the war in Ukraine, when SpaceX threatened multiple time to interrupt the delivery of Starlink satellite services.

Finally, the risk of digital dependency is also critical in systemic sectors such as the financial sector. Today, the EU lacks a unified payment system, and while only seven countries of the Euro area have their own national payment systems 49 , the EU as a whole relies heavily on international card schemes, representing over 64% of all card-initiated transactions in the euro area 50 . In addition, mobile app payments, dominated by non-European tech firms (such as Apple Pay, Google Pay and PayPal), now account for nearly a tenth of retail transactions and are showing double-digit annual growth. These developments are exposing the EU to geopolitical and cybersecurity risks. The Commission’s legislative proposal on the digital euro, adopted in June 2023, continued its path of interinstitutional negotiations in 2024. The final decision on its issuance rests with the European Central Bank, following the conclusion of the legislative process.

4. Harnessing digitalisation for the EU’s defence capacity

Digital technologies are a cornerstone of the EU efforts to reinforce its security, strategic autonomy, and defence capabilities. By harnessing the potential of synergies between civilian and defence AI applications, the EU can unlock new opportunities for innovation, enhance Europe’s competitiveness and reinforce its strategic autonomy in this critical domain.

Robust and secure communication networks are essential for modern defence operations. Sovereign satellite communication infrastructure is vital for independent defence and crisis response. Integration of 5G and 6G technologies will further enhance secure, real-time operational capabilities across domains. In parallel, sovereign cloudified networks are critical to ensure that sensitive defence data is securely stored, processed, and protected within the EU jurisdiction. AI represents a transformative force in both civilian and military contexts as AI-enabled systems are key to accelerating threat detection, improving decision-making, and supporting autonomous operations.

Semiconductors underpin nearly all modern defence capabilities. As global supply chains remain vulnerable to geopolitical tensions, the Commission is committed to supporting a secure and sovereign European semiconductor ecosystem building on new five pilot lines with a total investment of EUR 3.7 billion, now able to also serve defence applications.

Figure 8: The increasing overlap between digital and defence policy areas

Quantum technologies will increasingly shape the future of secure communications, sensing, and computing. Through initiatives such as EuroQCS, EuroQCI, and the Quantum Flagship, the EU is investing in quantum computing for complex problem solving, ultra-secure communications, gravimetry sensors, and precise positioning, navigation and timing -to mention just a few that serve both defence and civilian applications and critical infrastructures.

The development and scale-up of dual-use start-ups and unicorns are essential to ensuring Europe’s long-term strategic competitiveness. However, a EUR 1.25 trillion defence investment gap since 2006 is indicative of chronic underinvestment, particularly for deep tech startups which includes an EUR 4 billion shortfall for SMEs, hindering innovation 51 . Bridging this gap requires sustained investment, better integration of digital and defence strategies and targeted support for dual-use technologies and innovation ecosystems. Persistent barriers to private investment, including outdated exclusion policies, constraints related to Environmental, Social and Governance (ESG) standards, and a lack of defence-focused financial instruments 52  have hindered the growth of digitally intensive SMEs and start-ups developing defence or dual solutions. About 40% of defence SMEs still face difficulties in accessing sources of financing, especially during the growth phase 53 . 

In conclusion, amid an evolving geopolitical landscape and the changing nature of warfare, the Commission’s efforts to integrate digital technologies into the defence ecosystem—and vice versa—are essential to strengthening the EU’s security, resilience, and technological leadership. Civilian-focused initiatives have laid important groundwork for harnessing advanced digital technologies such as AI, quantum computing, and semiconductors in support of defence capabilities. Nonetheless, key challenges persist, including the need for deeper policy integration, addressing digital infrastructure gaps, and accelerating innovation through targeted investment in dual-use technologies and enhanced coordination between digital and defence strategies.

5. International aspects of the Digital Decade

The digital transformation is reshaping economies and societies across Europe and globally, reinforcing the EU’s strategic interest in securing technological competitiveness as the foundation of long-term political sovereignty. Building on the EU’s strengths and internal policies and actions, the International Digital Strategy for the European Union 54  seeks to (i) boost the EU’s tech competitiveness through economic and business cooperation with trusted partners (ii) promote a high level of security for the EU and its partners and (iii) shape global digital governance and standards in line with the EU values-based approach.

The Commission has continued to develop its network of Trade and Technology Councils (TTC) and Digital Partnerships. The EU has also expanded its growing portfolio of free trade agreements and digital trade agreements, which set high-standard digital trade rules and provide a platform for cooperation on digital trade issues. The Global Gateway strategy is playing a key role in promoting digital infrastructure investment, notably of secure 5G networks provided by trusted vendors and secure and resilient submarine cables. More broadly, the Global Gateway strategy is strengthening Europe’s role as a trusted partner in global connectivity. Additionally, the Commission is supporting digital transformation efforts in enlargement countries and the EU’s neighbourhood, while also engaging in multilateral forums to drive progress on key issues, such as the governance of AI (including the G7 Hiroshima AI Process and the Council of Europe Convention), Council of Europe Convention) or the promotion of secure and data protection compliant Digital Public Infrastructures (notably in the G20).

Finally, the Declaration on Digital Rights and Principles 55 has had a significant impact on international discussions, serving as inspiration for several international declarations 56  and contributing to the first comprehensive framework for global digital governance. By promoting its values and standards globally, the EU is helping to shape the future of the digital economy and ensure it is aligned with its strategic interests and values.

6. Conclusion

Amid intensifying geopolitical pressures, rapid technological change, and rising global competition, the Digital Decade anchors the EU’s resolve to shape a digital future rooted in technological sovereignty, competitiveness, innovation, sustainability and resilience.

As the EU reaches the pivotal midpoint of the Digital Decade, 2025 can be the moment when ambition turns into lasting impact. The choices made now will determine whether Europe completes its shift from a regulatory pioneer to a global leader in sovereign, secure, and ethical digital technologies. The report underlines the importance of responding with unity, determination, and sustained effort.

While the EU has sharpened its strategic focus and made real progress, major challenges continue to undermine the pace and resilience of its digital transformation. Skills shortages, infrastructure gaps – especially in connectivity and foundational technologies – and increased security and sovereignty concerns all demand urgent attention. Fragmented markets, overly complex regulations, possible tensions on energy capacity, and insufficient societal resilience and safeguards are also limiting the EU’s ability to scale innovation and unlock the full potential of its private capital.

The findings of this report highlight the importance of acting more consistently, focusing on these internal barriers and prioritising the acceleration of innovation cycles, the scaling of strategic technologies across the Single Market, and investment into the sovereignty and security of its digital ecosystem. In this regard, the National Roadmaps adopted by Member States mark a crucial turning point. Their success depends not only on ambition, but on coherent, long-term execution and alignment across all levels of governance. This also means making full use of the enabling instruments – from EDICs and the coming AI and Cloud Development Act, the EU Wallet, the GDPR, the DSA, DMA and AI Act – to the upcoming ‘28th Regime’ proposal – as well as better aligning investments with actual needs.

The stakes are high. Without decisive and further coordinated action, the EU risks missing out on substantial gains. According the EPRS study, an ambitious, coordinated policy could potentially increase the EU GDP by 1.84% compared to the baseline, based on increased productivity, more efficient public services, and a thriving innovation ecosystem 57 . By turning its collective strengths into strategic advantage and sustaining coordinated action over time, Europe can not only meet the goals of the Digital Decade but lead the way in shaping a digital future grounded in resilience, trust, and shared prosperity.

Achieving this vision requires strong, collective ownership from all Member States, and cooperation with all parties involved, including cities, local and regional groups, to deliver digital policies that have tangible impact for citizens, businesses, and public services.

Considering the evidence presented in this report, the Commission will continue discussing with Member States, the European Parliament, and stakeholders on how to progress together, leveraging the Digital Decade’s governance mechanism, notably the Digital Decade Board. The report will also inform the co-operation with stakeholders and partners outside the EU.

As set out in the DDPP, the Commission will monitor and assess the implementation of these recommendations and report on the progress made in the State of the Digital Decade 2026. The Commission will also start preparing the review of the DDPP, planned by June 2026. This will provide an opportunity for a strategic reflection on the Digital Decade’s framework, objectives, and governance, to better address shifting geopolitical, technological, and societal realities.

(1)

See notably COM(2025) 30 final A Competitiveness Compass for the EU, as well as the 2024 Progress Report on the Implementation of the Strategic Compass for Security and Defence.

(2)

DECISION (EU) 2022/2481

(3)

  A Competitiveness Compass for the EU , COM(2025) 30 final.

(4)

Please see the following page: https://digital-strategy.ec.europa.eu/en/policies/2025-state-digital-decade-package.

(5)

Daron Acemoglu and Simon Johnson, Power and Progress: Our Thousand-Year Struggle Over Technology and Prosperity (2023)

(6)

Dealroom.co. The 2025 European deep tech report, March 2025.

(7)

See Annex 1 to the Communication, related recommendations and Staff Working Document.

(8)

Eurobarometer Digital Decade 2025.

(9)

A Competitiveness Compass for the EU , COM(2025) 30 final.

(10)

Eurobarometer Digital Decade 2025.

(11)

The current KPI for the 5G target does not reflect the actual quality of service experienced by users. It monitors areas where a 5G signal is available, regardless of the network performance. Therefore, the current stage of 5G deployment can be considered only as ‘basic 5G’.

Regarding quantum, data is based on: Strategic Advisory Board of the European Quantum Flagship,  Key Performance Indicators for Quantum Technologies in Europe , , March 2025. Note that it is expected that six additional quantum computers will be deployed until the end of 2025 as several procurement procedures are currently ongoing. 

(12)

 No 2024 data is available for Cloud take-up, Data analytics take-up and Basic digital skills. The 2024 value of SMEs digital intensity is compared with the 2022 value. Full details on the KPIs in DESI 2025 Methodological note at https://digital-strategy.ec.europa.eu/en/policies/2025-state-digital-decade-package

(13)

 Estimates at global level, on annual basis. Source: International Energy Agency,  AI and Energy , April 2025.

(14)

McKinsey,  AI power: Expanding data center capacity to meet growing demand , October 2024. 

(15)

Digitalisation, environmental sustainability and resilience are mutually reinforcing transformations, as digital solutions could cut 15–20% of global greenhouse gas emissions by 2030 across sectors, notably through improved efficiency in buildings, energy, transport, and manufacturing sectors. Digitalisation can also help resource optimisation, water resilience, pollution and waste reduction as well as create new market opportunities for example through products meeting high eco-design standards or in boosting circularity.

(16)

When referring to national roadmaps, data used in this report are those declared by the Member States in their national roadmaps, on the basis of the Commission's guidance (C(2023) 4025 final). Data might reflect possible variations in reporting practices and methodological choices across Member States. No systematic assessment was made of the extent to which Member States followed the guidance.

(17)

Roadmap adjustments submitted by 31/03/2025 are taken into account. In accordance with Article 8 of the Decision (EU) 2022/2481, which establishes the Digital Decade Policy Programme 2030, Member States are required to submit adjustments to their national roadmaps to the Commission every two years, starting within 5 months of the publication of the second Report on the Digital Decade. If a Member State believes that no updates are necessary, it must provide a justification for this to the Commission.

(18)

Number of measures and budgets as reported by the Member States. The budget in the graph is split between targets and objectives, most of the budget (99.58%) is allocated towards the targets which are often related to some of the objectives. The budget breakdown shown for objectives (0.42%) only shows the breakdown of the budget allocated towards objectives that are not associated to the targets.

(19)

See SWD ‘Monitoring of the European Declaration on Digital Rights and Principles’.

(20)

See De Nigris, S., Kalpaka, A. and Nepelski, D., Characteristics and regional coverage of the European Digital Innovation

Hubs network, Publications Office of the European Union , Luxembourg, 2023, doi:10.2760/590526, JRC134620, and European Commission: Joint Research Centre, Carpentier, E., D’Adda, D., Nepelski, D. and Stake, J., European Digital Innovation Hubs Network’s activities and customers, Publications Office of the European Union, Luxembourg, 2025, https://data.europa.eu/doi/10.2760/7784020 , JRC140547.

(21)

  A Competitiveness Compass for the EU , COM(2025) 30 final.

(22)

See European Parliamentary Research Service, Cost of Non-Europe in High-Tech Digital Innovation: Investment Needs and Economic Benefits , July 2024; European Central Bank, Mind the gap: Europe’s strategic investment needs and how to support them , ECB Blog by Othman Bouabdallah, Ettore Dorrucci, Lucia Hoendervangers and Carolin Nerlich, 27 June 2024; Draghi, M.,  The future of European competitiveness , 2024; World Economic Forum, Europe’s Digital Transformation: Time for Bold Action, July 2024.

(23)

 European Parliamentary Research Service, Cost of Non-Europe in High-Tech Digital Innovation: Investment Needs and Economic Benefits , July 2024, pages 56-57 and 60-61.

(24)

  What is the capital markets union? - European Commission .

(25)

EPRS (2024) estimates that around one fourth of the required HTDI investment would need to come from public sources. The study also provides an overview of other estimates for the public-private split from comparable analyses.

(26)

 Other estimates concur, for example estimating that creation of sovereign, interoperable, and secure digital infrastructure stack alone would represent a total investment of EUR 300 billion over ten years (Bria, Timmers, Gernone,  EuroStack – A European Alternative for Digital Sovereignty. Bertelsmann Stiftung , 2025 EuroStack – A European Alternative for Digital Sovereignty, February 2025 ). 

(27)

Public sector engagement with start-ups and SMEs to procure innovative solutions.

(28)

European Green Digital Coalition’s Net Climate Impact Assessment of digital solutions– www.greendigitalcoalition.eu

(29)

 For connectivity infrastructure, the EU requires over EUR 200 billion by 2030 for gigabit connectivity and ‘full 5G’. White Paper, how to master Europe's digital infrastructure needs , COM(2024) 81 final.

(30)

 These priorities are central in the context of the Competitiveness Compass  (COM (2025) 30 final) and the Communication ‘Road to  the next multi-annual financial framework ’ (COM(2025) 46 final). Moreover, higher alignment between funding and key digital needs was advocated by a recent ECA report on the Recovery and Resilience Facility (ECA Special report 13/2025). 

(31)

 European Central Bank, Mind the gap: Europe’s strategic investment needs and how to support them , ECB Blog by Othman Bouabdallah, Ettore Dorrucci, Lucia Hoendervangers and Carolin Nerlich, 27 June 2024.

(32)

EIB, Investment Report 2024/2025: Innovation, integration and simplification in Europe , 2025.

(33)

  Competitiveness Compass  (COM (2025) 30 final).

(34)

Dealroom.co, Opening moves in global AI - AI, startups & venture capital, AI Action Summit, Paris , February 2025.

(35)

European Commission, European industrial technology roadmap for the next generation cloud-edge offering, 2021.

(36)

Data on budget in the first column are based on estimates by the Joint Research Centre (JRC) based on the mapping of five major programmes—RRF, CEF Digital, Horizon Europe, DIGITAL, and Cohesion Policy—and their contribution to the Digital Decade targets. Estimates are referred to the multi-annual financial framework 2021-2027, with the Recovery and Resilience Facility covering the period 2020-2026. Amounts should be regarded as broad estimates. See also Annex 1 to this Communication (section 5.b), and SWD ‘Digital Decade in 2025: progress and outlook’ (section 4.2.2). Source: European Commission: Joint Research Centre, Nepelski, D. and Torrecillas, J. Mapping EU level funding instruments 2021-2027 to Digital Decade targets – 2025 update, Publications Office of the European Union, Luxembourg, 2025, JRC141966.

(37)

COM(2025) 270 final Choose Europe to start and scale.

(38)

  Savings and Investments Union A Strategy to Foster Citizens’ Wealth and Economic Competitiveness in the EU , COM(2025) 124 final.

(39)

The RRF regulation required that he recovery and resilience plan ‘contributes to effectively address all or a significant subset of challenges identified in the relevant country-specific recommendations’ (REGULATION (EU) 2021/241 establishing the Recovery and Resilience Facility, article 18.4).

(40)

  Recovery and Resilience Facility Scoreboard .

(41)

  Guidance to the Member States on the preparation of the national Digital Decade strategic roadmaps , C(2023) 4025 final.

(42)

 IC Insights, McClean Report,  May 2Q Update of The McClean Report 2022 .

(43)

Ciani, A., Nardo, M., The position of the EU in the semiconductor value chain: evidence on trade, foreign acquisitions, and ownership, European Commission, Ispra, 2022, JRC129035.

(44)

McKinsey. The role of power in unlocking the European AI revolution , 2024. 

(45)

 According to Open Forum Europe, open-source software is estimated to contribute between EUR 65 to EUR 95 billion to the European Union’s GDP. Open-source software is today the basis for most software solutions, as open-source represents about 70% of all codes. But whilst Europe annually spends between EUR 10 and EUR 24 billion of public funds on software, only a minor fraction directly supports the European open-source industry, which comprises primarily of small and medium-sized enterprises (SMEs), start-ups, and individual developers (Blind, K.; Böhm, M., Grzegorzewska, P., Katz, A., Muto, S., Pätsch, S., Schubert, T. (2021). The impact of Open Source Software and Hardware on technological independence, competitiveness and innovation in the EU economy , Final Study Report. Brussels). 

(46)

 Draghi, M.,  The future of European competitiveness , 2024.

(47)

Statista, 2025 (Volume of data/information created, captured, copied, and consumed worldwide from 2010 to 2023, with forecasts from 2024 to 2028).

(48)

  EU Action Plan on Cable Security , JOIN(2025) 9 final.

(49)

  The digital euro: maintaining the autonomy of the monetary system , Keynote speech by Philip R. Lane, 2025.

(50)

Volume share of international card schemes in total electronically initiated card payments with cards issued in the euro area and transactions acquired worldwide for the first half of 2023. Based on data collected under Regulation (EU) No 1409/2013 of the European Central Bank on payments statistics (ECB/2013/43), as amended.

(51)

 European Commission, Defence Investment Gaps Analysis and Way Forward , 2024.

(52)

Dealroom.co & NATO Innovation Fund, Defence, Security and Resilience in Europe: The state of startups and venture capital, February 2025.

(53)

European Commission, Report on “Access to equity financing for European defence SMEs”, November 2023.

(54)

  An International Digital Strategy for the European Union , JOIN(2025) 140 final. 

(55)

  European Declaration on Digital Rights and Principles for the Digital Decade (2023/C 23/01).

(56)

The OECD Declaration on a Trusted, Sustainable and Inclusive Digital Future and discussions for a United Nations Global Digital Compact (GDC).

(57)

EPRS, Benefit of an EU strategic innovation agenda , Cost of Non Europe, 2025.

EUROPEAN COMMISSION

Brussels, 16.6.2025

COM(2025) 290 final

ANNEX

to the

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions

State of the Digital Decade 2025: Keep building the EU's sovereignty and digital future

{SWD(2025) 290 final} - {SWD(2025) 291 final} - {SWD(2025) 292 final} - {SWD(2025) 293 final} - {SWD(2025) 294 final} - {SWD(2025) 295 final}

Contents

1.    Introduction    

2.    Reinforcing technological sovereignty, security, and competitiveness    

3.    Protecting and empowering people, preserving EU democracies and values    

4.    Harnessing digitalisation for the green transition    

5.    Building coherence, efficiency and simplification    

1.Introduction 

This annex forms an integral part of the State of the Digital Decade 2025 report. It retains the four-chapter structure of the 2024 report, focusing on: technological sovereignty, security, and competitiveness; protecting and empowering people; harnessing digitalisation for the green transition; and a horizontal chapter on building coherence, efficiency and simplification.

The analysis provides an overview of the state of play, identifies key strengths to build on as well as gaps and shortages, and offers targeted recommendations to all Member States in areas requiring stronger collective action. The analysis primarily relies on the monitoring conducted through the Digital Economic and Society Index (DESI). It is further supported by relevant studies, expert analysis, and the National Digital Decade Strategic Roadmaps submitted by Member States.

2.Reinforcing technological sovereignty, security, and competitiveness 

a.A continent supporting digital innovation and sovereignty 

I.Closing the innovation gap

-Research and Innovation (R&I) for a digitally transformed Europe

The trends identified in the 2025 State of the Digital Decade are still very much demonstrating the EU’s weakness in digital innovation, particularly the limited scale of investment in R&D and the insufficient focus on breakthrough innovation 1 . According to data from the EU Industrial R&D Investment Scoreboard, the US dominates digital R&D, accounting for around 40% of all digital companies and 53% of total R&D investment among those identified in 2023 2 .

Overall, while Europe remains a global hub for scientific exchange, it lacks critical mass of top-performing players, reflecting a fragmented ecosystem with limited specialisation 3 . The latest available Eurostat data shows that the percentage of the ICT sector in gross value added is relatively low and grew only marginally in recent years, from 4.86% in 2019 to 5.46% in 2022 4 . While European organisations excel in producing high-impact scientific publications, they struggle to transform this knowledge into patented innovation. Compared to the US and China, the EU lags behind in patent filings, with fewer applications submitted.

Digital technologies also play a crucial role in the EU’s efforts to innovate, compete and grow to ensure its freedom and reinforce its security, strategic autonomy, and defence capabilities, with a significant potential for leveraging synergies between civilian and defence applications. Start-ups and innovative companies in the field of dual-use technologies also play a key role, but their potential is limited by a long-standing defence investment gap—especially for deep tech and SMEs. Barriers like outdated policies and limited financing options further restrict growth.

To drive growth and cross-border investment in defence-related innovation, the European Commission has launched several dedicated instruments, including the EUDIS Matchmaking and Accelerator Programmes, and mobilised new funding channels through the European Innovation Council (EIC) and the TechEU Scale-up Fund. In January 2024, via the European Investment Fund, the Commission launched a EUR 175 million Defence Equity Facility, designed to leverage up to EUR 500 million in venture capital for defence technologies with dual-use potential. This complements European Defence Fund investments in advanced digital domains and innovation-driven initiatives. One of these initiatives is the EUDIS Hackathon, which gathered over 275 participants from 16 Member States and generated more than 70 innovative solutions to address pressing defence challenges.

-Boosting the scale-up capacity of Europe

The 2025 data on unicorns in the EU reflects a slowing down of the dynamic that characterised COVID times in 2021 and 2022. In 2024, the number of unicorns established in the EU rose by 12 units, reaching 286 unicorns. The target of 500 unicorns is expected to be reached in 2034 if no further actions are taken 6 .

There are significant variations among Member States – with Germany (69 unicorns), France (48) Sweden (39), and the Netherlands (32), topping the list. However, the EU still lags significantly behind China (397) and the US (1687), the latter demonstrating a higher annual growth rate (6% against 4.4% in the EU).

Despite its vast economic potential, the Digital Single Market remains fragmented, with a complex landscape of national regulations, administrative procedures, and obstacles to data and knowledge sharing that leaves a large potential untapped.

First and foremost, there is a need for a substantial development of EU capital markets. The lack of private capital for ‘big ticket’ investments still prevails. This forces too many EU startups to seek late-stage growth capital from venture capital funds outside the EU, which can often result in them moving their corporate headquarters outside the EU. The Savings and Investments Union 7  will be crucial to improving how the EU financial system channels savings into the real economy, and uses those savings for productive long-term investment. 

To foster the rise and development of scaleups, the EU is set to adopt an EU Startup and Scaleup Strategy in 2025. This strategy aims to address financial, regulatory, and administrative barriers that hinder startups from scaling up into mature, profitable companies–an urgent priority to prevent them relocating outside the EU. For innovative companies to emerge and existing ones to scale up, the single market plays a crucial role. As part of this effort, the Commission will present a ‘28th regime’ to make it possible for innovative companies to benefit from a single, harmonized set of EU-wide rules, wherever they invest and operate in the single market. At the same time, the implementation of the Digital Markets Act is creating and opening up significant opportunities for startups and scaleups by imposing specific obligations on gatekeepers and thereby ensuring that small businesses that use such platforms benefit from fair and open markets.

However, EU-level action alone is not enough to address these challenges, and cooperation with Member States will be critical, especially to attract and retain talent, foster access to finance, promote tech transfer policies and the public procurement of innovative products and services. It can build on the Member State-led Europe Startup Nations Alliance 8 (ESNA), which supports national innovation policy makers in sharing and implementing best policy practices for startups.

II.Fostering Ecosystems and infrastructure for an AI continent

Connectivity

Modern connectivity is no longer a collection of separate technologies— satellites, submarine cables, mobile and fixed networks—but a deeply interconnected ecosystem. To respond to the growing demand for critical, low-latency applications, such as autonomous vehicles and remote surgery, higher amounts of data 9  need to flow seamlessly across all these domains, as disruptions in one can affect the entire network’s performance and security. This requires a global approach, spanning from orbital assets to terrestrial infrastructures in a unified, resilient, and globally optimised system. The EU must already lay the the foundation for this approach, with full coverage of fibre and accelerated development of stand-alone 5G.

Regarding fixed connectivity, accelerated action is needed to meet 2030 targets. Very high Capacity Networks (VHCN) coverage reached 82.5% in 2024, with a growth rate of 4.9%, while fibre coverage stood at 69.2% of households in 2024, marking an 8.4% annual increase. However, at the current pace, full coverage would only be achieved by 2051. In particular, rural deployment of fibre lags behind, with just 58.8% coverage in 2024.

Data on the uptake of gigabit connectivity and 5G shows an upward trend, although there is still room for improvement. In 2024, only 22.3% of fixed broadband subscriptions were at speeds of 1 Gbps or higher (up from 18.5% in 2023). Overall, basic 5G coverage 10  across the EU reached 94.3% in 2024, which is comparable to the 97% estimated coverage in the US and 95% in China and India 11 . Rural 5G coverage in the EU and in the US are comparable with the EU at 79.6% and the US at 82%. Both regions have lower rural coverage compared to China (85.2% estimated) and India, which leads with 92.1% rural coverage. 5G take-up (share of the population using 5G SIM cards) increased in the EU from 21.7% to 35.6% in 2024. This is higher than India's 11.1%, but it is still significantly behind the US (96.5%) and China (73.1%). Ensuring that the spectrum needs for future connectivity are met is another critical challenge, while the incomplete assignment of the three 5G pioneer bands and the slow progress reported (on average in Europe only 75% of the relevant spectrum has been assigned by February 2025) exacerbate the problem.

In 2025, Europe is significantly falling behind in adopting 5G stand-alone (SA) networks, with only 2% of 5G users connected via SA infrastructure 12 . This sluggish uptake reflects ongoing challenges in infrastructure deployment and device readiness across the region. In stark contrast, the US is far ahead with 24% of its 5G users operating on SA networks and China has surged with 77.1% — underscoring the country’s aggressive roll-out of next-generation core technologies. These disparities reveal a growing global divide in 5G evolution, spotlighting China’s technological momentum and exposing the structural and policy hurdles hampering Europe’s shift from 5G non-stand-alone (NSA) to true SA capabilities.

In their National Roadmaps, Member States reported devoting a significant portion (approximately 28%) of their measures’ total budget to gigabit fixed connectivity, amounting to EUR 80.6 billion (with EUR 56.6 billion coming from private sources). The 103 measures primarily focus on regulatory actions to facilitate network deployment, as well as financial support for non-viable and commercially unattractive areas and strategic parts of the networks. About one third of the measures are dedicated to each of the two areas. In their roadmap adjustments, Member States maintained a strong emphasis on regulatory actions to facilitate network deployment.

In terms of 5G investments, Member States reported investing EUR 5.9 billion (with EUR 2.9 billion coming from non-public funds), which accounts for approximately 2% of the total budget of their measures. The 39 measures for 5G focus on spectrum management, as well as financial support for non-viable and commercially unattractive areas, and strategic parts of the network. There is equal emphasis on each of the two areas. In their roadmap adjustments, Member States placed a significant focus on increasing financial support for 5G networks.

To improve market incentives to build the digital networks of the future, the Commission is working on a future Digital Networks Act (DNA), to be proposed by the end of 2025, aiming to improve digital connectivity for all end-users. In parallel, the Commission is setting up 5G standalone large-scale pilots with EUR 205 million funding under the Connecting Europe Facility, a large-scale pilot for Telco-edge-cloud deployments under Horizon Europe (EUR 75 million funding), as well as taking a proactive role in the global race for 6G by developing a spectrum roadmap and shaping global standards.

Regarding satellite connectivity (broadband internet, direct-to-device or D2D and Internet of Things or IoT satellite), the EU is facing a dual challenge of capacity and sovereignty. The EU remains heavily reliant on non-EU actors to access space, notably SpaceX launchers, and on US satellite constellations such as Starlink, while the satellite capacity of EU operators lags behind its competitors. Comparing the number of satellites paints a stark picture for the EU which has only 3 893 launched and planned satellites. China has launched 220 satellites and has an additional 27 198 planned, and the US has 7 633 launched and additional 33 397 planned - both countries have very ambitious expansion plans for the coming years 13 . Satellites are becoming an essential component of an efficient, secure and resilient connectivity network, increasingly providing low latency broadband connectivity. The convergence of non-terrestrial and terrestrial networks is accelerating, including in 5G and future 6G systems, increasing mobile coverage through satellite D2D connections—and improving network resilience and security with advanced encryption.

Already counting on GOVSATCOV, the EU will start improving its strategic presence in space with the development of IRIS². IRIS² is the new EU multi-orbit satellite constellation 14 of 292 satellites which will provide for secure connectivity and high-speed broadband to eliminate connectivity dead zones. In December 2024, the Commission and the SpaceRISE industry consortium, comprising the three major EU satellite operators, signed a 12-year concession contract for the design, development, and operation of IRIS². On the regulatory side, the Commission continues work with the Radio Spectrum Policy Group (RSPG) to develop a common approach to define common requirements for satellite constellations accessing the EU market and satellite D2D and to explore the potential of the EU harmonised 2 GHz Mobile Satellite System (MSS) frequency band, which will become available for reassignment in 2027, as a strategic tool to support its ambitions in the space market.

Submarine data cables are the backbone of global digital communication, carrying over 99% of international data traffic, which makes their security and resilience a top priority for the EU. In 2025, the EU has taken several steps to mitigate potential vulnerabilities that could be exploited by geopolitical adversaries (see section on cybersecurity below) and invested considerably in studies and works supporting submarine cables and backbone infrastructure. CEF-Digital already supports 51 Global Gateways projects (mostly on submarine cables) for a total investment of EUR 420 million. The demand for CEF funding is constantly increasing for submarine cables: the total requested funding is almost 6 times higher than the available budget in forth call.

Cloud and edge infrastructures

The role of edge nodes is critical in the future AI ecosystem. Edge computing enables more immediate AI processing of massive data volumes and intelligent interpretation of data in minimal processing times (milliseconds). It also provides a more secure processing environment and reduces data transmission costs and network congestion. The applications are numerous, including video observation, analysis and asset/equipment monitoring, tracking and performance optimisation 15 .

In 2024, it is estimated that a total of 2 257 edge nodes were deployed across the EU, which is a single-year increase of 1 072 new nodes compared to 2023. 2025 represents a pivotal moment in the deployment trajectory; it is expected to see 1 455 new nodes deployed, the biggest single year increase, which is in line with the estimated trajectory to reach 10 000 by 2030. The density of edge nodes across the EU reveals varying levels of deployment across Member States. France, Germany, Italy, and Spain are at the forefront of edge node deployment. Today’s edge node deployments mainly address the critical need for accessing real-time data, with 20% of organisations already using these solutions extensively and 42% planning to adopt them. As AI and machine learning applications evolve, businesses are likely to adopt edge nodes more with a promising future adoption rate of 54% 16 . This underlines the transformative potential of AI and machine learning in driving business innovation, informing decision-making, and monetising edge solutions.

Growing data centre capacity across Member States will also be critical in supporting the development of AI. The amount of computing power utilised to train leading AI systems has expanded by 350 million times over the past 13 years 17 and, since 2010, the training computing power used to create AI models has been  growing at a pace of 4.6 times per year 18 , underlying the dependence of AI on cloud computing infrastructure and software to train and use AI models at scale 19 . The investment needs for developing cloud infrastructures are massive. Europe today has around 8-10 GW of installed data centre capacity, amounting to roughly a third of the installed capacity in the US and half of the installed capacity of China 20 . Even though Europe’s capacity is projected to increase significantly, potentially reaching 70% growth by 2030, the gap with the US is expected to widen further, as US data centre capacity is set to double in the same period 21 . Industry forecasts predict that demand for data centre services will outpace supply, widening the gap in Europe’s cloud computing capacity relative to global competitors 22 .

In this context, the EU Cloud and AI Development Act will be key to accelerate the deployment of data centres in Europe, by cutting red tape, accelerating permitting procedures, improving access to land, finance and energy, and creating the right conditions to incentivise large investments in energy-efficient cloud and edge capacity. The act will address these obstacles, with a view to at least tripling the EU’s data centre capacity within the next five to seven years and bringing it to a level that meets the needs of EU businesses and public administrations by 2035. Finally, several Member States of the Joint European Forum for IPCEI (JEF-IPCEI) in November 2024 decided to enter into the design phase of two new potential Important Projects of Common European Interest (IPCEI). These new initiatives, focused on innovative AI Services (IPCEI-AI) and on deploying computing infrastructure (IPCEI-ECI), amongst others to support the ambitions set out in the AI Continent Action Plan 23 . 

Moving forward it will be crucial for the EU to closely monitor the deployment of data centre capacity across Member States in cloud and edge infrastructures. Ensuring a balanced and strategic expansion of data centres is essential to supporting the growing demand for AI compute capacity. In practice, it will be fundamental to include the systematic monitoring of investments in infrastructure and data centres. This would help ensure that European businesses and the public sector have adequate access to the necessary compute capacity to benefit from edge, cloud computing and AI-driven solutions. 

Semiconductors

In 2024 the EU's share of global value chain revenues was 10.5%, still far from the 2030 target of 20%. Huge investments were approved in the last semester of the previous US administration, and China is accelerating its investment in legacy chips manufacturing. The EU’s share is projected to increase again moderately in the coming years driven by the steady growth of the EU’s value chain revenues, in a context of sustained massive investments in other regions of the world, responding to strong growth of the global market revenues now projected to pass EUR 1.4 trillion in 2030. This implies that the EU's semiconductor revenues must grow more than four times their current value to achieve the Digital Decade target by 2030.

In their National Roadmaps, Member States have committed to investing a substantial EUR 49.2 billion in semiconductors, accounting for 17% of the roadmaps’ total budget across all targets. Private sources are expected to contribute EUR 8.6 billion to this investment 24 . The 52 measures reported in the roadmaps mainly focus on supporting R&D and boosting production capacity and industrial deployment of semiconductors. Roughly one-third of the measures are dedicated to each of these areas, indicating a balanced approach to driving growth and innovation. These areas also remain a priority in the Member States’ roadmap adjustments.

The European Chips Act has established a framework to attract investments from major semiconductor manufacturers into a first-of-a-kind for EU facilities. The first seven projects announced already exceeding EUR 30 billion in investments and there are other promising projects worth almost another EUR 30 billion in the pipeline. The approved IPCEI on Microelectronics and Communication Technologies (IPCEI ME-CT) brings together 14 Member States and 56 companies, channelling around EUR 20 billion from both private and public sources into 68 collaborative projects across multiple countries. Furthermore, a proposal for new IPCEIs on advanced semiconductor technologies is currently in the design phase. Moreover, the Chips Act is the basis for supporting five pilot lines with a total of EUR 3.7 billion funding. These projects will bridge the gap between laboratory innovation and industrial-scale manufacturing in key areas such as beyond 2nm leading-edge system-on-chip, fully depleted silicon-on-insulator applications, advanced packaging, wide band gap materials, and photonic integrated circuits.

For Europe to compete globally in the semiconductor sector, it is essential to substantially increase investments and to continue its commitment to the leading value chain areas, including semiconductor equipment, chips design, analogue components, sensors, photonics, while also securing a strong entry into emerging markets such as computing and AI-oriented silicon.

With this aim in mind, the Commission is starting the formal review of the Chips Act, which is planned by Q3 2026, with a clear support for a Chips Act 2.0 from industry, some Member States, and other stakeholders.

Quantum and High Performance Computing (HPC)

The EU reached and exceeded the target in 2024 as the first two quantum simulators were deployed in France and Germany 25 . Moreover, it is expected that six additional quantum computers will be deployed until the end of 2025 as several procurement procedures are currently ongoing.

In their National Roadmaps, Member States reported investing EUR 4.1 billion in quantum computing (1% of the total budget of the National Roadmaps), of which EUR 3.8 billion come from private sources. The 63 measures reported mainly focus on supporting R&D and deploying quantum technologies, with roughly one third of the measures dedicated to each area. In their adjustments, Member States primarily focused on R&D for quantum technologies.

Quantum computing is a priority for the EU’s leadership as a foundational technology, with frequent technological breakthroughs, increasing geopolitical focus and regions taking measures to secure their interests in this strategic field. Quantum technologies are poised to revolutionise multiple industries, driving innovation in healthcare, transportation, energy, defence, chemicals, and pharmaceuticals. Following the Quantum Technology Flagship in 2018, committing EUR 1 billion over a decade to reinforce Europe’s leadership, total funding has grown to EUR 7 billion.

Despite being a leading source of public funding for R&I in quantum 26 , the EU still struggle to mobilise private finance to scale up, attracting only 5% of global private funding (50% goes to US companies) 27 . This limited private funding hinders the scale-up capacity and contributes to brain drain and intellectual property migration. Moreover, it creates dependence on non-EU capital and platforms, putting the EU’s quantum sovereignty at risk, especially for hardware and full-stack quantum solutions.

The European Investment Council has already invested over EUR 200 million in all the fields of quantum technologies (sensing, communication and computing) and announced a new STEP Scale-Up scheme 28 , making up to EUR 900 million of deep tech scale up funding available. 

The Commission is fostering the development of Quantum Pilot Lines to strengthen Europe's strategic autonomy in quantum technologies. In 2025, six pilot lines for quantum chips were selected under the Chips Joint Undertaking (JU), bridging laboratory prototypes and industrial manufacturing. QU-PILOT ensures technology maturation (TRL 4 – 7), quality control, and certification processes, paving the way for the future stability pilot lines under the Chips JU (TRL 8 – 9). It offers open access to support startups, SMEs, and academia, preventing a critical gap between R&D and industrial production. The Quantum Strategy and Quantum Act will set out the EU’s plans to establish itself as the global leader in quantum technologies by 2030 and beyond.

The High-Performance Computing JU (EuroHPC) is contributing fully to the Digital Decade’s quantum acceleration target by 2025 and has already selected eight sites across the Union to host the first EU quantum computers in Czechia, Germany, Spain, France, Italy, Poland, Luxembourg and the Netherlands.

Since its establishment in 2018, EuroHPC is leading the development of a world class supercomputing infrastructure. Over the past five years, EuroHPC has contributed to the acquisition of eight supercomputers, including computers that are among the most powerful in the world. These computers include LUMI (ranked #8 globally), Leonardo (#9), and MareNostrum 5 (#11), which collectively multiply Europe’s computational capabilities. EuroHPC has also helped develop the first European system to reach the exascale frontier (JUPITER), which will become fully operational in Q2 2025. A second exascale supercomputer (Alice Recoque) is to be installed within the next year. Two further mid-range EuroHPC systems in Greece and Sweden are currently being procured. These efforts have contributed to developing a world-leading, secure, and interconnected supercomputing ecosystem, broadening HPC usage, and cultivating essential skills for European science and industry.

With the launch of the AI Factories initiative, nine new AI optimised supercomputers will be procured and deployed across the EU in 2025 and 2026, to match the EU’s ambition of becoming a leading AI Continent. EuroHPC supercomputers have already enabled many scientific breakthroughs. For example, in 2024 the unprecedented and unique kilometre-scale Earth system models and global multi-decadal climate projections up to year 2050 were made possible through cooperation between EuroHPC and the EU’s Destination Earth initiative 29 . This initiative has contributed to better predicting and mitigating the effects of climate change and extreme weather events in the EU.

Both HPC and quantum computing will play a key role in the development of AI Factories and Gigafactories as presented in the AI Continent Action Plan. The AI Factories will deploy and operate AI-dedicated supercomputers connected to large data centres. These Factories will support AI startups and research ecosystems by providing supercomputing services for the large-scale training and development of trustworthy and ethical AI models, particularly in health, climate change, robotics, and automated driving. Additionally, AI Factories will foster talent development through advanced education, training, and reskilling programmes for AI stakeholders.

b.Foster dissemination of digital technologies in the economy 

A key factor undermining Europe’s competitiveness is the insufficient dissemination of digital technologies across its economy. This limited uptake hampers productivity growth and limits businesses’ ability to leverage technology for the creation of innovative services and business models 30 .

Achieving a basic level of digital intensity among more than 90% of EU SMEs is a key target of the EU’s Digital Decade strategy. As of 2024, 72.9% of SMEs had reached at least a basic level of digital intensity, up from 69.0% in 2022—a modest 2.8% annual growth. This is insufficient to reach the 2030 target before 2045, with only 67.9% of SMEs expected to meet the target by 2030.

Progress is uneven across Member States and sectors. While countries like Finland and Denmark have already met the target, others remain well below the EU average. Digital intensity also varies significantly between industries, with high-tech sectors like ICT outperforming traditional sectors such as construction, accommodation, and food services. SMEs face several barriers to digitalisation, including a limited awareness of digital technologies and cybersecurity, lack of funding for digitalisation, and digital skills shortages. To address these, the EU and Member States have introduced support measures such as knowledge-building initiatives, financial incentives, and ecosystem partnerships. In their National Roadmaps, 166 measures corresponding to a total of EUR 48.2 billion were reported as supporting the digitalisation of SMEs. The measures primarily focus on facilitating the uptake and deployment of digital technologies, as well as strengthening the broader ecosystem through activities such as information sharing, knowledge exchange and collaboration on digital technologies.

A cornerstone of this support is the European Digital Innovation Hubs (EDIHs) network, launched in 2023, now covering nearly 90% of the EU’s regions. EDIHs provide training, networking, funding advice, and opportunities for SMEs to test digital solutions before investing 31 . Thousands of digital maturity assessments have helped SMEs identify areas for improvement, with 90% of participants showing increased digital maturity after engaging with EDIHs. The Digital Maturity Assessment Tool (DMAT) shows that SMEs average a score of 40/100, which indicates a moderate level of digitalisation, with relatively strong areas like data management and cybersecurity, while AI & automation remains weak. Progress in advanced digital areas often depends on solid foundations in strategy, employee engagement, and data handling. Sectors like finance and ICT lead in digital maturity, while agriculture and forestry lag behind. On average, firms working with EDIHs improve their DMAT scores by seven points in the second assessment, reflecting the effectiveness of targeted support in advancing SME digital transformation across the EU 32 .

I.Take up of AI

AI has become a critical factor for competitiveness across all sectors of the economy. In 2024 the share of EU enterprises using AI rose significantly from 8.1% to 13.5%—a 67% year-on-year increase. However, this remains well below the Digital Decade target of 75% by 2030, which is not expected to be met until 2042, with only 35.9% adoption projected by 2030.

Large enterprises continue to lead in AI adoption, with a usage rate of 41.2%, compared to 12.6% among SMEs—a gap of nearly 29 percentage points. However, an encouraging trend is that small companies are accelerating, showing a 71% growth rate, more than double that of larger firms.

AI uptake is advanced in a few sectors - information and communication, and professional, scientific, and technical service, whereas the construction and accommodation are well below the average. Adoption rates vary across the EU, ranging from 27.6% in Denmark to 3.1% in Romania. Nevertheless, growth is broadly distributed, with the fastest increases often seen in countries that previously had low uptake.

In their National Roadmaps, Member States reported investments of EUR 10.9 billion to support the uptake of AI, cloud or data analytics – representing approximately 4% of the total budget across roadmaps and covering 196 measures in total. Among these, roughly 34 measures specifically target AI, accounting for EUR 1.3 billion. The measures supporting the uptake of AI, cloud and data analytics are evenly distributed across measures to enhance the ecosystems and knowledge exchange, establish enabling framework conditions and develop capabilities across these technologies. However, the AI-specific measures place a stronger emphasis on building AI capabilities. This focus is also reflected in Member States’ roadmap adjustments.

Overall, while momentum is building, reaching the EU’s AI targets will require more targeted actions and support, especially for SMEs and those sectors and regions lagging behind.

Following a slowdown in 2022 and 2023, AI investments have bounced back strongly. According to Dealroom, global venture capital investments in AI reached USD124.9 billion in 2024, marking a 58 percent increase on 2023 33 , while private investments in AI in the EU grew by 22 percent in 2024 to USD 10.8 billion 34 .

A key measure is the GenAI4EU initiative, which takes a sectoral approach and has so far allocated close to EUR 700 million in planned Horizon Europe and Digital Europe programme calls in 2025. GenAI4EU aims to stimulate the uptake of generative AI in a wide range of sectors fostering collaboration between AI startups and deployers of AI in industry and the public sector. GenAI4EU is dedicated to unlocking the revolutionary potential of generative AI through ambitious projects. In particular, the initiative aims to optimise production lines in manufacturing, improve robot autonomy and human-robot collaboration in complex tasks, as well as to increase the EU’s cyber-defence and medical imaging capabilities.

At the AI Action Summit in Paris, the Commission announced InvestAI, an initiative to mobilise EUR 200 billion for investment in AI. This includes the launch of the InvestAI Facility, with a view to mobilise EUR 20 billion investment in AI infrastructure. The investment will support in particular up to five AI Gigafactories across the EU, building on the EUR 10 million invested in supercomputing infrastructures and AI Factories in 2021-2027.

The AI Office has been actively working on boosting AI adoption through various support instruments to boost technological integration across Member States. Recently, the EU has intensified its focus on AI adoption, designating it as a main priority to ensure competitive and innovative growth. The various initiatives mentioned in this chapter are part of the AI Continent Action Plan published on 9 April 2025. The plan outlines a set of actions on computing infrastructure, data, the development of AI algorithms and adoption, skills, and regulatory simplification to make the EU a global leader in AI.

Moreover, the Commission is adopting the Apply AI strategy to boost new industrial uses of AI and to improve the delivery of a variety of services. The strategy will assess the potential of AI technologies in strategic sectors, including advanced manufacturing; aerospace; security and defence; agri-food; energy and fusion research; environment and climate; mobility and automotive; pharmaceutical; biotechnology; advanced materials design; robotics; electronic communications; cultural and creative industries; and science. Furthermore, the public sector will be a driver of the strategy. To ensure consistency among the different support measures for AI, the Apply AI strategy, on which a wide array of stakeholders and the public are consulted, will strengthen the interplay and effectiveness of support instruments and target them towards the needs of AI adopters.

The Apply AI strategy will identify policy actions and concrete deliverables per sector, with key performance indicators to be achieved. The Commission will contribute to supporting developments through its funding programmes as well as through enablers. These enablers include the AI Factories and Gigafactories, Data Spaces, Testing and Experimentation Facilities, European Digital Innovation Hubs, and AI Skills Academies. This, in turn, will support AI uptake by European enterprises and the public sector.

AI Factories are open and dynamic AI ecosystems created around the public network of Europe’s world-leading EuroHPC supercomputers. They support the EU AI industrial and research ecosystems by bringing together computer power, data and talent to create cutting-edge, trustworthy AI models and applications. They foster collaboration across Europe, unlocking the potential of AI companies, in particular SMEs and start-ups, universities, and industry. AI Factories serve as one-stop shops driving advancements in AI applications across various sectors, such as health, manufacturing, climate and finance. In December 2024, seven consortia were selected to host the first AI Factories 35 , and in March 2025, the EuroHPC announced the selection of another six new AI Factories 36 . These AI Factories are expected to more than triple the current EuroHPC AI computing capacity. Overall investments in supercomputing infrastructures and AI Factories in the EU will reach EUR 10 billion between 2021 and2027.

In parallel, European Digital Innovation Hubs (EDIHs) will function as AI Experience Centres providing stakeholders with the opportunity to test AI solutions before investing in them, but also offering funding advice, networking opportunities, and trainings. From December 2025, EDIHs will increasingly focus on AI uptake and ensure the adoption of AI solutions across sectors.

The Network of European Digital Innovation Hubs will work in close synergy with the AI Factories ecosystem. Among others, it will facilitate companies’ access to the computing and data resources of the AI Factories, as well as to other AI initiatives, including regulatory sandboxes and testing and experimentation facilities. Increasing the level of AI skills in the Union is one of the priorities that the Apply AI strategy will pursue, as an AI-literate workforce is necessary to boost AI uptake. In particular, the AI Skills Academy will function as a one-stop shop providing education and training on skills for developing and deploying AI, and in particular generative AI. Looking ahead, interested Member States with the support of the Commission are designing a possible new Important Project of Common European Interest focused on AI, known as IPCEI-AI. The goal is to support R&D&I and first industrial deployment activities, aiming to develop innovative AI technologies and services, such as capabilities for training and deploying foundational models, such as AI models tailored to specific use cases.

Best practice highlights

The Best Practice Accelerator’s (BPA) 37 Technology Take-up Cluster, launched in August 2024 under Belgium’s leadership, supports Member States in scaling up the adoption of advanced digital technologies by promoting high-level, replicable national initiatives. As part of the Digital Decade governance framework, the cluster has so far organised two workshops—focusing on AI uptake and on data and interoperability—with the participation of all Member States and presentations from Belgium, Greece, and Finland. Eight best practices have been submitted by Belgium, Denmark, Finland, Germany, Hungary, and the Netherlands, covering themes such as AI adoption, SME digitalisation, personal data control, supply chain optimisation, IPv6 roll-out, and national tech strategies. Workshops were marked by high Member State engagement and interest in the replicability of the practices shared. Upcoming sessions will continue to explore enabling frameworks and support schemes to accelerate the widespread use of frontier technologies.

c.Security & harnessing digital for EU’s resilience in a context of hybrid threats

I.Cybersecurity

The Cybersecurity landscape

As geopolitical and economic tensions grow, cyber threats escalate with espionage, sabotage, and disinformation campaigns becoming key tools for nations to manipulate events and secure a strategic advantage. Cyberespionage campaigns targeting EU Member States and EU institutions, bodies and agencies are continuous and remain a persistent and severe threat. In the context of the cybercrime ecosystem, ransomware remains one of the most impactful threats for EU Member States. There has been a shift from encryption to data exfiltration and with SMEs becoming a more attractive target for cybercriminals, and the double extortion tactic has become the norm for well-established ransomware groups 38 . In 2024, the healthcare sector was particularly affected, with ransomware accounting for 71% of cyber incidents impacting patient care 39 . Meanwhile, ransomware attacks rose by 11% compared to 2023, but enforcement actions against major groups like LockBit have led to a more fragmented threat environment, with 46 new ransomware groups identified in 2024 40 .

Supply chain attacks have also surged. Cybercriminals exploit weaknesses in third-party vendors and service providers. This is particularly problematic where there is reliance on technology from high-risk suppliers subject to the jurisdiction of a third country that requires reporting information on software or hardware vulnerabilities to its authorities before they know to be exploited. States-sponsored actors may also preposition themselves in critical infrastructure with the intention of causing disruption later, for example during a conflict. Internet of Things malware attacks increased by 107% in the first half of 2024 41 . There have been concerning trends in public cybersecurity awareness 42  ,with declining confidence among the EU population in their ability to protect themselves from cybercrime and generally low awareness about reporting mechanisms. Overreliance on a single vendor for critical operations, especially non-European vendors, can result in major risks to all sectors of the economy, as evidenced by recent major incidents like the CrowdStrike outage of 2024.

With an estimated 299 000 cybersecurity professionals missing in its workforce, the EU faces a critical gap 43 . The Cybersecurity Skills Academy 44  contributes to addressing this challenge with concrete actions entrusted to the EU Agency for Cybersecurity (ENISA), such as developing the European Cybersecurity Skills Framework (ECSF) 45  or piloting a cybersecurity skills attestation scheme supporting recognition and portability of skills acquired by cybersecurity professionals. 

Cybersecurity in enterprises

When it comes to cybersecurity in enterprises, 92.8% of surveyed enterprises 46  with more than 10 employees in the EU used at least one ICT security measure in 2024. Only 35.5% of the enterprises had documentation on measures, practices or procedures on ICT security, and only 34.1% of them had carried out an ICT risk assessment. Commonly used measures included strong password authentication (83.7% of enterprises) and data backups in a separate location (79.2% of enterprises). According to Eurostat, in 2024, 21.5% of enterprises experienced ICT-related security incidents leading to some adverse consequences.

The median information security spending rose to 9.0% of IT budgets (up 1.9 percentage points) 47 , with higher perceived maturity in entities already covered by the Network and Information Security (NIS) Directive 48 . Among all sectors, the telecommunications sector ranks highest in maturity 49 .

Despite their critical role in cybersecurity and digital resilience, the deployment of key Internet standards in the EU remains slow and fragmented. IPv6 adoption in the EU stands at 36.4% (user-side) and 16.8% (server-side), with significant disparities across Member States: adoption in some exceeds 40% (e.g. Belgium, France, Germany), while it remains below 10% in others (e.g. Croatia, Cyprus, Malta) 50 .

In their National Roadmaps, Member States reported 38 measures contributing to increased cybersecurity. Almost half of these measures are dedicated exclusively to cybersecurity, with a total budget of EUR 0.8 billion. The other measures have a broader scope, aiming to support several targets across all areas, with a total budget of EUR 6 billion. These initiatives often involve developing national cybersecurity strategies, establishing cybersecurity centres, boosting cybersecurity skills and strengthening cybersecurity capacities in businesses, public services and digital infrastructure. This focus is also reflected in the Member States’ roadmap adjustments.

In the period 2024 - 2025, the EU significantly advanced its cybersecurity agenda. The NIS2 Directive, which had to be transposed into national law by October 2024, sets a high level of cybersecurity for entities operating in 18 critical sectors. Moreover, in October 2024, the Commission adopted the first implementing act under the NIS2 Directive, specifying the cybersecurity risk management measures and the cases in which an incident should be considered significant for companies providing digital infrastructures and services. The Cyber Resilience Act 51 , in force since December 2024, mandates cybersecurity requirements for digital products, with full implementation within three years. The Cyber Solidarity Act 52 , effective since February 2025, established a European Cybersecurity Alert System, consisting of Cyber Hubs that would use advanced technologies and AI-driven threat detection. The act also laid the groundwork for the Cybersecurity Emergency Mechanism and the Incident Review Mechanism. The Cybersecurity Act 53 was effectively amended in February 2025 to enable the possible certification of managed security services. A European action plan on the cybersecurity of hospitals and healthcare providers 54 was adopted in January 2025, improving sectoral preparedness. Finally, in February 2025, the Commission proposed a revised Cybersecurity Blueprint, integrating civil-military coordination and crisis response mechanisms 55 .

Work is also progressing on the European Quantum Communication Infrastructure (EuroQCI), which is part of the Union Secure Connectivity Programme (IRIS²). EuroQCI will provide, in first instance, a highly secure, quantum-protected service for the exchange of cryptographic keys, for symmetric encryption of communications between governmental entities and for protecting critical infrastructures. Throughout 2024, efforts focused on deploying national quantum communication networks, advancing key European technologies, and preparing for the deployment of quantum communication in space. Deployment of cross-border connections will start in 2026. The current EuroQCI efforts on point-to-point links and more complex networks are initiating the long-term endeavour of transitioning to future networks fully based on quantum technologies. However, the threat posed by quantum computing to cryptography must be addressed now, in a manner that is compatible with the way modern digital networks are designed and function. The transition to Post-Quantum Cryptography (PQC) remains essential, and such technology will likely play a highly relevant role also to support or hybridize with future quantum networks. To guide this transition, the Commission published a Recommendation in 2024 encouraging the Member States to develop a Roadmap to ensure a synchronized transition to PQC for public administrations and critical infrastructures across the EU. Work on developing this roadmap is ongoing, in the context of the PQC workstream in the NIS Cooperation Group, and it is also accompanied and supported by the sectorial developments, deployments and mapping of activities in several EU projects and other Member States’ initiatives.

ii. Submarine cables security

In February, the EU adopted the Action Plan on Cable Security to strengthen the resilience of its submarine cable infrastructure, including data cables, following a full resilience cycle—prevention, detection, response, recovery, and deterrence. The Commission, alongside the High Representative, will engage with Member States and partners, including NATO, to operationalise a number of concrete actions.

To prevent incidents that could compromise the EU’s security and resilience, the Action Plan sets out dedicated actions to improve the redundancy and security of telecommunications cables. A key component of this effort is the allocation of nearly EUR 1 billion from the CEF Digital programme to strengthen backbone connectivity, with a focus on cross-border digital infrastructure and to connect EU territories with likeminded third countries. The Action Plan also promotes strengthening security requirements, in accordance to both the NIS2 and CER Directives. As set out in the prevention section of the Action Plan, an Expert Group comprising Member State representatives and ENISA has been established to deliver on Recommendation (EU) 2024/779 on Secure and Resilient Submarine Cable Infrastructures 56 . The Action Plan specifies that by Q4 2025, the Expert Group is expected to complete key tasks, including a comprehensive mapping of existing and planned infrastructures, a coordinated risk assessment (including the development of a stress testing methodology), the creation of a Cable Security Toolbox of mitigating measures, and a priority list of Cable Projects of European Interest (CPEIs) to be co-funded by CEF Digital. To increase the capacity to detect potential threats and incidents early on, the Action Plan further proposes to establish an integrated surveillance mechanism. This mechanism will be facilitated through the voluntary set up of regional cable hubs, located in each sea basin, which will serve as centres for monitoring and analysing the status of submarine cables, including potential suspicious activity occurring nearby. Additionally, the Action Plan provides for investments in new technologies, such as smart cables, undersea sensors and drones, to improve detection capacities.

The Action Plan sets out a more efficient response to incidents, building synergies between existing EU crisis management frameworks such as the EU Cyber Blueprint and the Critical Infrastructure Blueprint. To reduce the time to repair and mitigate the impact of incidents, it also calls for increased repair capacities. To that end, the Commission has proposed to support modular equipment that can be plugged to civilian vessels, and the gradual establishment of an EU Cable Repair Fleet.

To strengthen the security and resilience of submarine cables, a central role will be played by the CEF Digital programme, including for: i) providing direct support to the funding of strategic cables (over 420 million already committed in the first three calls); ii) enhance our ability to monitor and trigger early response actions in case of suspicious events (early warning systems); iii) support the deployment of functional modules for the repair and deployment of cables.

Finally, to deter malicious actors from engaging in harmful activities, the Action Plan calls for a significant strengthening of efforts to counter the shadow fleet of vessels. It also emphasises the importance of boosting cable diplomacy and promoting a common interpretation of international maritime law.

3.Protecting and empowering people, preserving EU democracies and values 

a.Empower people through digital skills

Empowering citizens and equipping workers with digital skills are at the core of Europe’s digital transformation, in line with the Declaration on Digital Rights and Principles. Basic digital skills are essential for economic participation, social inclusion, and democratic resilience, while the availability of highly skilled professionals—particularly ICT specialists—is critical to Europe’s competitiveness, technological sovereignty, and strategic autonomy.

Despite growing awareness of the need to boost digital skills across society, the pace of progress in this area remains insufficient. In 2023, only 55.6% of adults had at least basic digital skills 57 . On the basis of current trends, the EU is expected to reach a level of just under 60% by 2030 – falling significantly short of the 80% target set in the context of the Digital Decade policy programme 58 . This shortfall is particularly evident among certain demographic groups. For example: older adults, people with low levels of education, and people not in work or looking for work face disproportionately high risks of digital exclusion 59 . Although young people are often seen as digitally ‘native’, they are not universally digitally literate: 43% of eighth-grade students (aged 13 to 14) do not reach basic levels of digital skills, with persistent disparities based on socio-economic background and geographical location 60 . 

At the same time, the need for ICT specialists is rising sharply. As the architects of Europe’s digital future, these professionals play a central role in deploying advanced technologies, increasing productivity, and delivering secure and efficient digital services. Nevertheless, the EU remains only halfway toward reaching its 2030 target of having 20 million ICT specialists in employment. Structural shortages persist, hindering growth in high-demand digital areas such as AI, cybersecurity, and semiconductors. In 2024, women accounted for 19.5% of employed ICT specialists, a figure virtually unchanged from 19.4% in 2023.

To address these challenges, the Commission, in partnership with Member States, has put in place a comprehensive framework to strengthen digital skills across society. The Skills package 61 , adopted in March 2025, puts a strong focus on digital skills as a key driver for competitiveness. It includes the Union of Skills, an Action Plan on Basic Skills 62 , a STEM Education Strategic Plan 63 , and the upcoming 2030 Roadmap on the future of digital education and skills. To strengthen leadership in key digital technologies, the Commission is prioritising the development of advanced digital skills, ICT talent attraction and a resilient, future ready digital workforce. This also includes initiatives such as the recently adopted AI Continent Action Plan and the upcoming Apply AI strategy.

 To respond to the need for a more coordinated approach to digital skills education and training in the EU, targeted at emerging skills needs of European companies, the European Commission is funding and promoting three new Digital Skills Academies in Quantum, AI, and Virtual Worlds. These academies will leverage strategic partnerships and act as powerful catalysts for promoting digital careers. The Cybersecurity Skills Academy, which already helps Member States to scale up training provision and improve coordination between industry and education providers, is being further expanded. Furthermore, through the Chips Act and the establishment of Chips Competence Centres, the Commission and Member States are investing in national talent pipelines for the semiconductor sector, supporting advanced technical training and collaboration with industry.

In their National Roadmaps, Member States reported investments of EUR 24.6 billion in basic digital skills (9% of the total budget). The 339 measures reported on the roadmaps primarily focus on improving digital skills in formal education and promoting digital inclusion, with roughly one third of the measures dedicated to each area. This emphasis on building digital skills is also evident in Member States’ roadmap adjustments. For training of ICT specialists, Member States reported investing EUR 11.8 billion (4% of the total budget). The 213 measures on ICT Specialists mainly focus on increasing the number of people with advanced and highly specialised digital skills, with around one third of these measures targeting individuals in formal education and approximately one quarter of the measures focusing on those already in employment. This focus is also reflected in the Member States’ roadmap adjustments, which include a sharp increase in measures aimed at boosting advanced digital skills among women.

National efforts have been strengthened through collaborative mechanisms. The 2024 edition of the European Digital Skills Awards 64  recognised outstanding projects promoting inclusion, digital literacy, and bridging digital divides. At the same time, the Digital skills and Jobs Platform 65 continues to grow as a central hub–for accessing learning opportunities, connecting over 15 000 stakeholders across Europe.

However, as laid out in the Draghi report and reiterated in the Competitiveness Compass, Europe is facing massive investment needs for education and skills development in sectors critical to European competitiveness and preparedness. Mobilising public and private investments, pursuing growth-enhancing reforms, and leveraging multi-country projects will be key to closing the talent gap in digital skills.

The European Commission is supporting the development of the Common European Data Space for Skills to improve our knowledge of what skills are likely to soon be in demand, helping policymakers and educators to anticipate future needs and direct investments more effectively. Furthermore, given the mounting global competition for digital talent, the EU is stepping up its support to Member States and employers to attract highly skilled top-tier researchers and professionals by establishing Multipurpose Legal Gateway Offices in selected partner countries. Where relevant, these could underpin Talent Partnerships as well as the future EU Talent Pool. In addition, the EU will also act to support portability of skills, addressing barriers to workers’ mobility.

Best practice highlights

The BPA Digital Skills Cluster, led by Slovenia, involved all Member States in a structured peer exchange, with best practices submitted by Austria, Belgium, Croatia, Czechia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Luxembourg, Romania, Slovenia, and Spain. While only some submitted practices, all Member States participated in the associated workshops that were held and expressed interest in adapting successful approaches. Of the 34 practices shared, over half focus on boosting basic digital skills for underserved groups, while 15 target the education of ICT specialists through measures such as curriculum reform, AI training, SME upskilling, and gender equality. Five workshops have been held so far, covering topics such as inclusion, education, AI-readiness, and the participation of elderly, rural populations, and women in advanced skills. Future sessions will continue to support inclusion while expanding into ICT specialisation areas such as cybersecurity, semiconductors, and mid-career reskilling.

b.Deploy digital solutions for people and societies 

User-friendly and accessible digital public services to foster competitiveness and inclusion

In 2024, the EU made steady progress toward its Digital Decade targets for fully digital public services. The citizen score rose to 82.3/100 (+3.6%), and the business score to 86.2/100 (+0.9%). In their National Roadmaps, Member States reported investing EUR 13.8 billion, representing approximately 4.8% of the total budget, to drive the digitalisation of key public services. This investment included a comprehensive set of 287 measures, of which more than half aim to increase the uptake, interoperability and accessibility of digital public services and around one-quarter focus on strengthening their security and resilience of these services.

As Member States expand their offering of digital public services, ensuring technological sovereignty and reducing reliance on foreign technologies has become an important mean to safeguard privacy, increase resilience, and strengthen trust in EU-governed digital ecosystems. Despite the growing digitalisation of public services across the EU, a very significant share of government digital infrastructure still relies on non-EU-based service providers -particularly in areas such as cloud computing, data hosting, software platforms, videoconferencing and cybersecurity solutions. With 80% of the services bought by governments and the private sector originating mostly from the US 66 , a substantial share of the EUR 2 trillion that public authorities spend annually on the purchase of services, works and supplies 67  is not being spent on services originating in the EU. This dependency might pose strategic risks, including reduced control over sensitive data, potential misalignment with EU values and regulatory frameworks, and vulnerability to the application of third country laws. Strategic public procurement, notably thanks to the revision of the Public Procurement Directives, as well as the support to GovTech will play a key role to foster EU preference through public investment and procure innovative solutions, which streamline administrative processes, foster transparency and improve data-driven decision-making.

It is also of the utmost importance to ensure that there is adequate human support to help members of the public navigate digital services, with 9 out of 10 Europeans emphasising the significance of this support in the Digital Decade Eurobarometer survey 68 .

In 2024, the use of AI in public services expanded further on EU Member States - from decision support and personalised services, to predictive tools in healthcare. A cornerstone of the efforts to reduce administrative burdens and support European Businesses interacting digitally will be the European Business Wallet which will streamline business-to-business and business-to-government interactions, enabling secure data exchange while creating new opportunities for trust service providers.

The Single Digital Gateway and the Your Europe 69  portal are key elements of the EU’s digital infrastructure for cross-border public services. Your Europe is the main access point for national procedures and information about rules and rights and is currently the most visited EU website. The Once-Only Technical System 70  enables the secure cross-border exchange of evidence. Its common services are operational, and Member States are currently connecting competent authorities to it. A cornerstone of the efforts to reduce administrative burdens and support European Businesses interacting digitally will be the European Business Wallet which will streamline business-to-business and business-to-government interactions, enabling secure data exchange while creating new opportunities for trust service providers. Together with the upcoming EU Digital Identity Wallet 71 , the Single Digital Gateway and the Once-Only Technical System form an integrated infrastructure for accessing public services across the EU 72 . In addition, the Public Procurement Data Space simplifies processes and improves monitoring across the Single Market 73 .

Other tools include the Business Registers Interconnection System (BRIS), a key transparency and secure data exchange tool, providing the public with company information and enabling the implementation of the ‘once-only’ principle with regard to company data and the European e-Justice Portal which are of key importance for the digitalisation of public services and of cross-border judicial proceedings.

The Interoperable Europe Act 74 , effective from April 2024, marked a significant step towards strengthening interoperability in the public sector and the delivery of digital public services, providing a structural framework to drive seamless, cross-border digital public services within the EU.  It introduces interoperability assessments to be carried out by publica administrations to ensure cross-border interoperability (mandatory since January 2025) and regulatory sandboxes. It also embeds digital-ready policymaking - ensuring that future EU legislation supports digital transformation from the outset.

I.EU Digital Identity Wallets and European Business Wallets

The European Digital Identity (EUDI) Framework is a cornerstone of Europe’s digital transformation and a key enabler of Digital Decade targets. Coverage continues to expand with 24 Member States having now notified their electronic ID schemes, and 95% of EU citizens now having access to eID. However, Hungary, Greece, and Ireland have yet to notify their schemes.

Central to this EUDI framework are the EUDI Wallets, designed to offer every EU citizen and business secure and seamless access to both public and private services across the EU by the end of 2026. These wallets will transform how people interact online - enabling cross-border authentication, legally valid e-signatures, and the digital storage, presentation and verification of key documents such as IDs, educational credentials, ePrescriptions, social security attestations, and driving licences. By replacing multiple logins with a single trusted solution, they increase convenience, privacy, and security for everyday transactions, travel, and access to services.

Moreover, significant legal milestones were reached. The EUDI Regulation entered into force in May 2024, followed by the adoption of nine implementing acts in November 2024 and April 2025, setting uniform technical standards and putting in place a robust certification framework. These ensure that all wallets are interoperable, secure, and privacy-preserving across the EU. Member States are now mandated to provide at least one wallet by the end of 2026.

Deployment is being tested through Large Scale Pilot (LSP) projects, covering real-world use cases from education, social security and travel to payments and eGovernment services. Since 2023, four LSPs have been running, involving over 350 entities from nearly all Member States. In 2025, two new consortia - WE BUILD and APTITUDE - will further scale this work with over EUR 40 million in EU and Member State funding. These projects cover 17 use cases, including supply chains, business services, vehicle registration certificates, and digital travel credentials. These pilots are supported by the Digital Europe Programme.

Looking ahead, the European Business Wallet proposal will build on the EUDI Framework, is planned in Q4 2025. This proposal will seek to facilitate business interactions with public authorities, reduce reporting burdens, and enable secure regulatory compliance across borders. This will in turn increase Europe’s competitiveness.

II.eHealth and technologies for healthcare.

In 2024, the EU continued to advance toward its Digital Decade goal of universal access to electronic health records (EHRs) by 2030. The composite score in the area rose to 82.7/100 (from 79.1/100 in 2024), with all Member States offering some form of EHR access. Estonia joined Belgium in reaching full coverage, while countries like Czechia, Ireland, Romania, and Slovakia made strong progress. Despite these gains, disparities persist: Austria, Cyprus, and the Netherlands recorded setbacks due to reduced functionalities or service availability. Ensuring the online availability of health records will now also be required under the European Health Data Space 75 , which entered into force in March 2025 as part of the EU’s efforts to foster the digital transformation of healthcare. The European Health Data Space will increase citizens’ control over their personal electronic health data and enable data reuse for research, innovation and policy purposes.

Innovation in medical technologies and life sciences is increasingly being powered by digital health data. Of the 13 first-selected AI Factories, 11 will put health and/or life sciences among their focus areas. The European Cancer Imaging, 1+ Million Genomes, and Virtual Human Twins initiatives are making progress on setting up data infrastructures to foster personalised care and data-driven research, backed by targeted DIGITAL 76 funding and new procurement instruments. At the same time, the number of healthcare providers contributing data continues to grow, though private sector participation still lags. In their National Roadmaps, Member States reported investing EUR 7.8 billion to support e-Health services (all coming from public budgets), with approximately 106 measures, most of them focusing on accessibility and uptake. Continued investment, technical alignment, and cross-border cooperation will be essential to fully achieve the European Health Data Space. Cybersecurity remains a key concern. To strengthen resilience, incident response, and recovery capacities across the sector, the Commission in January 2025 launched a European action plan on the cybersecurity of hospitals and healthcare providers - a flagship initiative of the President von der Leyen’s ‘first 100 days’. Further recommendations to strengthen cybersecurity in the health sector, based on consultations with stakeholders and Member States, will follow in Q4 2025.

III.Smart cities and the New European Bauhaus: digital for quality of life 

To bring digital innovation closer to citizens and make cities more sustainable and climate-neutral, the EU has mobilised a range of funding initiatives and multi-country projects, including the DIGITAL programme and newly established EDICs. The LDT-CitiVERSE-EDIC, launched in 2024, will help cities harness digital twins and shared infrastructure to address urban challenges—such as climate neutrality, clean mobility, and smart energy systems. CitiVERSE aims to bring together 100 cities in 2025 under a common EU digital infrastructure, connected to the first SIMPL-based Data Space for Smart Communities. Other projects are also underway to harness digital technologies in societal projects such as the New European Bauhaus (NEB) 77  for more sustainable, innovative and beautiful living environment (DigiNEB) 78 . The new LDT-CitiVERSE-EDIC 79 will receive within the EU procured LDT toolbox a complete set of digital tools and services to be used together with the EU building dataset for AI-based impact assessment of NEB strategies.

To address the challenge of climate neutrality with a holistic approach, there are also possible synergies with the actions taken under Horizon Europe 80 , within the Mission on Climate-Neutral and Smart Cities.

Another initiative funded by the Digital Europe Programme, the European Data Space for Smart Communities (DS4SSCC-DEP) is a pivotal deployment project focusing on creating a large-scale data space controlled by public data holders, ensuring alignment with the Smart Middleware Platform and broader data space ecosystems. It also aims to offer middleware service solutions facilitating data sharing and management while refining the service it offers based on gained experience.

The Digital Europe Programme also co-finances the testing and experimentation facilities (TEF) for smart cities and communities: CitCom.ai. CitCom.ai provides facilities to test advanced AI and robotics solutions in real-world settings, targeting the sustainable development of cities and communities. CitCom.ai focuses on three overarching themes: (i) Power which targets changing energy systems and reductions in energy consumption; (ii) Move which targets more efficient and greener transportation linked to logistics and mobility; and (iii) Connect which serves citizens through local infrastructures and cross-sector services. CitCom.ai is organised around three super nodes – Nordic, Central and South – supported by satellites and sub-nodes located across 11 EU countries: Denmark, Sweden, Finland, the Netherlands, Belgium, Luxembourg, France, Germany, Spain, Poland and Italy.

The Commission currently manages or contributes to a broad set of initiatives with - and for - cities. The flagship R&I initiative in this field is the Horizon Europe Mission on Climate-Neutral and Smart Cities (‘the Mission’), which aims to deliver 100 climate-neutral cities by 2030 and ensure that all EU cities follow suit and become climate neutral by 2050 81 .

c.Protecting people, including minors, online

I.Preserving safety, security and wellbeing in digital environment 

Online platforms have become integral to everyday life in the EU. Services like Google Search, YouTube, and Amazon are used by most Europeans 82  and 77% of internet users shop online 83 . Citizens are also increasingly aware of online risks: in 2023, nearly 70% took action to protect their personal data 84 , and 72% reported awareness of the GDPR 85 . However, the sheer volume of user and platform activity - illustrated by over 10 billion content-moderation decisions in the last six months 86 - highlights the urgent need for robust digital governance. 

The Digital Services Act (DSA), Digital Markets Act (DMA) and, among others, the Terrorist Content Online (TCO) Regulation are instruments that aim to ensure a fair, safe, secure and trustworthy digital environment for citizens and businesses, accompanied by robust enforcement mechanisms.

The Digital Services Act (DSA) indeed represents a landmark EU response to this issue, setting clear obligations for digital service providers and assigning greater responsibilities to Very Large Online Platforms (VLOPs) and Very Large Online Search Engines (VLOSEs). In 2024, the list of services designated as VOLPs grew to 25, including Shein, Temu, and XNXX. To enforce the DSA, the European Commission has sent over 100 Requests for Information (RFIs) to platform providers, targeting disinformation, unsafe products, and opaque advertising practices. In addition, the Commission opened 14 formal proceedings—for example against the providers of TikTok, Meta, Temu, X and AliExpress—notably focused on illegal content, the protection of minors, and algorithmic transparency. Markedly, one of the proceedings against the provider of TikTok has already been closed after TikTok agreed to binding commitments.

In February 2025 the Commission introduced the e-Commerce Communication which sets out a series of cross-cutting measures to ensure that goods sold online for example on digital marketplaces and particularly by non-EU sellers comply with EU rules 87 . By November 2025 the Commission will evaluate how the DSA interacts with other EU legislation, in particular legislation on personal data and consumer protection. 

II.Protecting children

As set out in the 2024-2029 Political Guidelines 88 , the Commission considers the protection of children’s and young people’s mental health - particularly online - as one of the greatest challenges of this decade. The Polish and Danish Presidencies of the EU Council have identified the impact of social media on young people’s mental health and the protection of minors online as a priority. In 2024, public concern over the protection of children online continued to rise, with increasing calls across the EU and internationally to address the digital determinants of poor mental health among young people 89 . These calls have largely focused on the regulation of digital technologies and their negative impacts on mental well-being. 

According to the 2025 Digital Decade Eurobarometer survey, an overwhelming majority of respondents believe that urgent action by public authorities is needed to protect children online, and in particular to: (i) limit the negative impact of social media on mental health (93% of respondents agreed); (ii) restrict access to age-inappropriate content through robust age assurance mechanisms (92% agreed); and (iii) tackle cyberbullying and online harassment (92% agreed) 90 . Increasing screen time has coincided with higher levels of problematic social media use and rising reports of cyberbullying. According to a study by the World Health Organization (WHO), one in six school-aged children has experienced cyberbullying 91 . Additionally, 34% of surveyed adolescents reported playing digital games daily, with 22% playing for at least four hours on a gaming day 92 . Previous research 93 has shown that adolescents with problematic social media use report lower levels of mental and social well-being, as well as higher rates of substance use, compared to non-problematic users and non-users. If this trend continues, it could have far-reaching consequences for adolescent development and long-term health outcomes.

The risks children face online are increasingly severe. In 2024 the EU co-funded Safer Internet Centres (SICs) handled over 54 000 calls, 14% of which related to cyberbullying and 24% to sexual content, including grooming and sextortion 94 . In Poland, during the fourth quarter of 2024, every second underage internet user was exposed to erotic content, spending an average of 10 to 14 minutes per day on such material 95 .

Excessive screen time, exposure to violent, pornographic or explicit content, and commercial manipulation - often in environments designed for adults - have become frequent experiences for minors, posing significant risks to their mental health. So far, age-gating tools that restrict access to content based on age remain largely ineffective. Research suggests that intensive use of online social networks is associated with loneliness and emotional distress among young people, a pattern not generally observed with instant messaging tools 96 .

The EU has strengthened its legal framework and policy action to protect children online. At the core of the EU toolbox on protection and empowerment of minors online are: the Digital Services Act, the Audiovisual Media Services Directive 97 ; the General Data Protection Regulation (GDPR) 98 ; the Better Internet for Kids strategy (BIK+); and the EU-co-funded network of Safer Internet Centres in Member States which reached over 35 million users in 2024. The EU AI Act is also relevant in this area, as it bans AI systems that exploit children’s vulnerabilities and requires additional safeguards for high-risk applications affecting minors. The protection of minors is one of the enforcement priorities of the Commission under the DSA. In 2024 the Commission opened four formal DSA enforcement proceedings related to minors—one each against Meta’s platforms, Facebook and Instagram, and two involving the provider of TikTok, one of which led to the suspension of addictive features in TikTok Lite and ultimately to the removal of that programme with a binding commitment not to re-launch it. In May 2025 the Commission opened formal proceedings against Pornhub, Stripchat, XNXX, and XVideos which also focus on the risks for the protection of minors, including those linked to the absence of effective age verification tools.

To continue protecting children into the future, the EU is preparing guidelines under the DSA to help online platforms ensure a high-level of privacy, safety and security for children using their services. These guidelines are expected in 2025 and will also help national authorities responsible for the enforcement to consistently apply rules for the providers of platforms below the threshold of 45 million monthly active recipients. In parallel, the Commission is developing a short-term, privacy-preserving age-verification solution, before EU Digital Wallets are offered to EU citizens and residents by the end of 2026. The Commission will also launch an enquiry into the impact of social media on the mental health of minors and is preparing an action plan against cyberbullying. Moreover, the upcoming evaluation of the Audiovisual Media Services Directive due by December 2026, accompanied where appropriate with proposals for its review, will assess the impact of this Directive and its added value when it comes to the provisions relating to the protection of minors against harmful content. Concerning the GDPR, the European Data Protection Board continues to work on guidelines about processing of children personal data expected to be finalised in 2026.

d.Preserving information integrity

In 2024, disinformation, often driven by manipulative social media algorithms, continued to undermine trust in institutions and democratic processes. The EU faces rising threats from coordinated inauthentic behaviour (CIB) and foreign information manipulation and interference (FIMI), with fake accounts, bots, and troll farms distorting public discourse and simulating grassroots sentiment - frequently as part of state-sponsored influence operations. Nearly 50% of EU citizens report encountering false or doubtful content online, reaching over 70% in the Netherlands 99 .

In response, the Commission has taken strong action, in particular by endorsing the integration of the Code of Practice on Disinformation into the framework of the DSA, as a Code of Conduct under Article 45 of the DSA, entering into application by July 2025. The Commission has launched four formal proceedings against the providers of major platforms Meta, TikTok and X, which focus on risk assessment and mitigation in the area of information manipulation.

The Commission also continues to support the European Digital Media Observatory, including its 14 fully operational hubs covering the entire EU. A Creative Europe call in October 2024 funded cross-border media literacy projects.

To address the challenges disinformation presents to elections, the Commission has used a wide toolbox, including the recommendation on protecting the integrity and resilience of the electoral process 100 , the European Cooperation Network on Elections and the joint election resilience mechanism, made available to support Member States’ authorities in building their capacity to detect and react appropriately to threats 101 . In the context of the DSA, targeted action has been taken through expert missions, stakeholder roundtables and stress tests, with the involvement of the Commission, Member States and Digital Services Coordinators (DSCs). In March/April 2024 the Commission published guidelines on recommended measures to the providers of VLOPs and VLOSEs to mitigate systemic risks online that may impact the integrity of elections 102 . A DSA Toolkit 103 , published in February 2025, offers national regulators best practices in their work with the providers of VLOPs and VLOSEs to mitigate electoral risks, including in relation to hate speech and manipulation. In December 2024, the Commission opened formal proceedings against the providers of TikTok under the DSA for suspected failure to mitigate risks to election integrity in Romania.

Mechanisms under the Code of Practice on Disinformation such as the Rapid Response System (RRS), active during EU and national elections 104 , enabled real-time fact-checking and content flagging in 2024 and continue to do so in 2025. The European Digital Media Observatory (EDMO) provided daily briefs and trend insights throughout the year. 

In 2024, the EU has also introduced new EU common standards in the internal market. They will enable citizens to easily recognise political advertising, understand who is behind it and know whether they have been targeted 105 . Such rules address the growing complexity and cross-border nature of political advertising in the internal market, its growth in the online space, the use of advanced targeting techniques and the threat of information manipulation and interference.

Fostering the EU’s media ecosystem has been a priority. The role of free and independent media is crucial to address the current disruptions in the information space, fostering a pluralistic public debate. However, the news media sector in Europe is undergoing a profound transformation due to market disruptions, uneven access to content, emerging threats to media pluralism, and new funding challenges related to the evolving geopolitical landscape. The 2024 Media Pluralism Monitor 106 reports a medium risk to fundamental protection of media (average score: 34% in the EU) and a high risk to market plurality (67% in the EU), driven by ownership concentration and lack of transparency in online content removal. To deal with challenges in the media market, the European Media Freedom Act 107  was adopted in 2024.

Looking ahead, the European Democracy Shield will, among other things, strengthen societal resilience and preparedness, and foster citizen participation and engagement. It will support free, pluralistic and independent media, and look at ways to reinforce our collective capacity to prevent, detect, analyse and respond to foreign information manipulation and interference (FIMI) and disinformation, including when they impact elections and voting behaviours, regulatory processes and public decision-making processes.

4.Harnessing digitalisation for the green transition

a.The digital-green nexus: unlocking sustainability, competitiveness and sovereignty

Digitalisation and environmental sustainability are no longer parallel priorities – they are mutually reinforcing transformations. If deployed effectively, digital solutions could cut 15 - 20% of global greenhouse gas emissions by 2030, notably through improved efficiency in buildings, energy, transport, and manufacturing sectors 108 .

This digital-green nexus also enhances Europe’s industrial competitiveness. Greener digital infrastructure and smart technologies reduce operational costs and encourage adoption by consumers. The integration of AI and the internet of things into energy and resource management enables more efficient operations, particularly for SMEs and municipalities. This contributes to decarbonisation while strengthening Europe’s position in emerging green tech markets. Not only do digital tools optimise supply chains, but they also enable circular and profitable business models (such as Product as a Service).

Digitalisation for smart greening is critical to increase Europe’s strategic autonomy and resilience. Digital tools such as smart metering allows better demand-side energy management and currently encompasses approximately 60% of European households on average. Nonetheless, substantial disparities persist between EU member states 109 . The launch of the code of conduct for energy-smart appliances will enable interoperability and boost the participation of smart appliances in demand response schemes. Climate observation satellites and predictive analytics contribute to early warning systems and help manage climate-related risks such as floods, wildfires, and droughts. As demand for low-carbon infrastructure and advanced computing grows, control over foundational technologies - including semiconductors, secure data infrastructure, and energy-efficient data centres - —has become a critical factor in reducing strategic dependencies.

AI is increasingly seen as a game changer for the green transition. When deployed responsibly, AI enables significant emissions reductions by improving energy efficiency, streamlining industrial processes, and supporting smarter resource management across sectors such as energy, transport, and agriculture. The potential of AI is amplified when combined with digital twins, sensor networks, and data-driven systems. The deployment of the energy data space will unlock consistent, high-quality and interoperable energy data for the training of AI models for energy and the inception of innovative energy services. The Smart Energy Expert Group was launched in October 2024 to support the establishment and governance of this initiative, through its ‘Data for Energy’ sub-group. AI-enabled decentralised energy systems, smart grid optimisation, and digital twins of the European electricity grid are helping improve energy efficiency and reduce reliance on imported fossil fuels. For example, AI-based grid management will be able to reduce electricity transmission losses while improving load balancing in real time 110 . Nevertheless, AI’s own environmental footprint–particularly that of Generative AI–must be addressed, especially the energy-intensive and water-intensive nature of training AI models. With global electricity demand from generative AI projected to reach up to 134 TWh by 2027, comparable to the annual consumption of Sweden 111 , aligning AI development with climate goals is essential.

b.Rising pressures: electricity and water demand in the digital transition

Despite the potential advantages of digitalisation for the green transition, the environmental footprint of the digital economy is rising. In 2024 data centres in Europe consumed approximately 70 terawatt-hours (TWh) of electricity. While this accounts for about 2% of total electricity consumption in Europe, for some countries, such as Ireland, electricity consumption by data centres is significantly higher, reaching 20% of total consumption. By 2030, electricity consumption by data centres in Europe is expected to grow by over 45 TWh, reaching a total of approximately 115 TWh. This constitutes a 70% increase over 2024 levels 112 . While data centres are important consumers of energy, they also offer an opportunity to contribute to system flexibility and demand response. Under the right conditions, they have the potential to provide grid services through the use of on-site battery storage, flexible cooling systems, load shifting, or by relocating computing workloads from one region to another as a form of sustained curtailment.

It is forecast that mobile networks alone are expected to consume up to 170% more energy by 2026, driven by the expansion of 5G networks 113 . Generative AI, AI training and inference, high-performance computing, and edge networks are further accentuating these trends. 

In parallel, water use for cooling digital infrastructure is becoming a growing concern. The water needed to produce semiconductors is significant. In addition, depending on the cooling method and local climate, data centres can require substantial amounts of water, particularly when using evaporative cooling systems 114 . 

The rapid deployment of AI accelerators and dense compute clusters exacerbates this challenge. Studies show that by 2027, global AI demand could consume between 4.2 and 6.6 billion cubic metres of water a year 115 . Both the water and electricity consumption of data centres will be a key issue that the Commission will address through the forthcoming follow-up to the Energy Efficiency Directive and the Cloud & AI Development Act.

c.Recent EU actions supporting the green digital nexus 

Since 2024, the European Commission has intensified its efforts to promote synergies between digital, energy, climate and circular economy actions. For example, the work on the EU Code of Conduct for sustainable telecommunications networks is advancing, with exchanges on a new draft occurring at a stakeholder workshop in May 2025.

In January 2025, the Commission adopted a new delegated regulation for establishing an EU-wide scheme to rate the sustainability of EU data centres, requiring operators of data centres above 500 kW to report key performance indicators to the European database by covering–among other things–energy use, water consumption, heat reuse and the type of refrigerant used. This lays the groundwork for more transparency on the sustainability performance of data centres that could be sought by future policy decisions.

In addition, the Water Resilience Strategy, launched in March 2025, provides guidance on water-efficient cooling technologies and supports municipalities hosting digital infrastructure through funding instruments under Horizon Europe and LIFE. The forthcoming Digital Product Passport framework will also apply to ICT equipment, detailing their environmentally relevant information. This will ensure lifecycle emissions and repairability are factored into procurement decisions.

The European Green Digital Coalition is a grouping of companies that seeks to harness the emission-reducing potential of digital solutions for all other sectors of the economy. With the support of the Commission, the European Green Digital Coalition released in 2024 a methodology to assess whether a deployed digital solution reduces more emissions than the solution’s own carbon footprint. The Coalition will assess in 2025-2026 another 50 digital solutions in the sectors of energy, transport, construction, smart cities, manufacturing, agriculture and healthcare. It will also work with financial institutions to help sustainable finance to scale the deployment of such green digital solutions.

The twin green and digital transition measures at Member States level

In 2024, a wave of activity began operationalising the twin green and digital transition 116 through national strategies, regulations, and sectoral deployments. This marked a shift from high-level ambitions to systemic policy implementation that jointly advances digital transformation and environmental objectives. Measures such as Italy’s Transition 5.0 Plan, Luxembourg’s National Energy Data Platform, and France’s Frugal AI standard illustrate how EU support has been translated into localised, impactful action. The revised Digital Decade National Roadmaps include 67 measures from 19 Member States contributing simultaneously to the Digital Decade’s green and digital objectives. Of these 67 measures, 38 are specifically designed to simultaneously address those green and digital objectives, with a total investment of EUR 214.2 million. 

Best practice highlights

France is leading the Green IT Cluster of the Best Practice Accelerator, and it has put forward three best practices on the twin transition field in 2024: (i) the General Policy Framework for the Eco-design of Digital Services , which targets ICT professionals and sets out 78 criteria and best practices applying eco-design principles in the development of services and the drafting of an Eco-design Declaration; (ii) the development and availability of Product Category Rules (PCR) for environmental evaluation and labelling to improve the environmental information provided to consumers, covering the entire product life cycle; and (iii) the Alt IMPACT Communication Campaign to raise public awareness about the environmental impact of digital technologies.

The Netherlands presented its Sustainable Digitalisation Action Plan published in July 2024. It outlines 44 concrete actions across three main pillars that work towards making the digital sector more sustainable, while simultaneously leveraging digitalisation for sustainability by improving the efficiency of production processes, optimising the use of existing resources, and enabling the circular use of raw materials and resources.

Finland presented a set of measures to increase the knowledge base on the environmental handprint and footprint of the ICT Sector. This set of best practice measures was in response to the lack of reliable and comparable data identified as one of the challenges during the drawing up of its national climate and environmental strategy for the ICT sector, which Finland published in 2021.

Luxembourg presented its Product Circularity Data Sheet (PCDS), a tool designed to provide detailed information about the circular characteristics of products, such as their recyclability, their durability, and their use of recycled materials. The PCDS is aligned with the general and cross-cutting requirements of the Ecodesign for Sustainable Products Regulation.

5.Building coherence, efficiency and simplification

In 2024, the Commission made a strong commitment to an ambitious simplification agenda 117 , presented in the Communication on a Simpler and faster Europe 118 . The Digital Decade is aligned with this simplification approach and includes a joint commitment to ensure that digital policies, measures, and programmes relevant for the EU’s digital transformation are considered in a coordinated and coherent way so that they fully contribute to the Digital Decade objectives, while avoiding regulatory overlaps and minimising administrative burdens. 

a.Need for simplification, efficiency and coherence

I.Better and lighter digital legislation

In 2024 and through 2025, the Commission prioritised the streamlining of EU legislation to enhance competitiveness, minimise the burden of compliance, reduce red tape and streamline regulation to ensure consistency. More than half of European SMEs flag such regulatory and administrative obstacles as their greatest challenge 119 . 86% of EU firms dedicate staff to compliance tasks, with the cost of compliance averaging 1.8% of turnover—rising to 2.5% for SMEs 120 . This is a similar order of magnitude to average energy costs, standing at 4% of annual turnover.

The Commission has set an overarching target to reduce reporting burdens by at least 25% for all companies —and by at least 35% for SMEs – before the end of its current mandate, without undermining the policy objectives of the reporting rules.

For the digital acquis, the Commission is planning a wide ‘stress test’ of the regulatory framework. Over the coming years, this stress test will include an assessment of regulatory coherence and whether the current rules are fit for purpose considering the rapid technological transformation and market evolution. The stress test will also explore whether further reductions can be made to the reporting and compliance burden, while pursuing the objectives of the regulations.

Firstly, in May 2025, the Commission came forward with the Single Market Simplification proposal. The Fourth Omnibus package simplifies the record-keeping obligation in the GDPR, taking into account the specific needs and challenges of small and medium-sized companies and organisations, while ensuring that the rights of individuals are protected.

Looking forward, in the fourth quarter of 2025, the Commission will put forward a Digital Package, including a Digital Omnibus proposal with a series of simplification measures for part of the digital acquis, stress-tested over the year.

In addition, the European Commission plans to propose the Digital Networks Act. This forthcoming legislation will transform Europe’s digital infrastructure to support European businesses and citizens in an increasingly connected world. This effort is fully aligned with the broader priorities of the Competitiveness Compass, where digital infrastructure is fundamental to Europe’s leadership in innovation, resilience, and long-term economic growth. At the core of this initiative is simplification. The Digital Networks Act will reduce regulatory burden, provide clarity, strengthen competition, all while safeguarding consumer benefits. The Digital Networks Act will ensure that digital infrastructure is built for the future.

The transformative potential of digital tools for administrative simplification has been strongly endorsed by recent high-level reports on competitiveness. The Commission is leading efforts to build a dedicated infrastructure modelled on Common European Data Spaces to automate regulatory compliance and data transmission.

The European Business Wallet will be a cornerstone of doing business simply and digitally in the EU, providing a seamless environment for companies to interact with all public administrations is the upcoming European Business Wallet. Building on the EUDI Framework, the European Business Wallets will be horizontal enablers for Europe’s competitiveness. The European Business Wallets are intended to streamline business-to-business and business-to-government interactions, enabling trusted digital identities, secure data exchanges and legally recognised digital notifications. It will reduce administrative burdens, lower compliance costs, and enhance cross-border transactions, benefiting SMEs and large enterprises. By streamlining processes, it will also improve business efficiency and foster competitiveness.

Alongside this, the Single Digital Gateway (SDG), and its cornerstone component -the Only-Once Technical System (OOTS) -could automate the exchange of verified data between public authorities, cutting administrative costs for SMEs by over 50%, according to a 2024 impact study 121 . By 2025, most Member States are expected to be technically ready to securely exchange official documents across borders, increasing the accessibility and interoperability of e-Government services for around 80 000 national authorities. Despite progress in this area, challenges remain - particularly in digitising industrial permitting procedures essential for sectors like renewable energy and semiconductors. Although EU legislation such as the SDG Regulation, the Net Zero Industry Act, and the Critical Raw Materials Act provide a strong legal foundation for the digital and green transitions, disparities persist as many Member States still lack the organisational and digital capabilities to fully implement and benefit from these reforms.

Further integration of these systems is planned. The European Business Wallet, EU Digital Identity Wallet, SDG and OOTS will together form a cohesive, interoperable digital infrastructure. This ecosystem will enable seamless interactions for businesses and citizens and reduce duplication in compliance processes. However, the slow progress made by national and local entities in implementing OOTS and the SDG remains a challenge, and this progress requires targeted alignment efforts and shared procedural standards.

EU company Law will reduce burden on companies leveraging digital solutions in synergy with the European Business Wallet, and through the Business Registers Interconnection System (BRIS) that enables the ‘once only’ principle with regard to company data. The ‘28th Regime’ proposal will further support companies to set-up and grow in the EU, making it possible for innovative companies to benefit from a single, harmonised set of EU-wide rules wherever they invest and operate in the single market, as announced in the Competitiveness Compass. The digital euro initiative is also contributing to simplification. By ensuring interoperability with the EU Digital Identity Wallet, the Commission aims to provide users of the digital euro with a streamlined and secure means of verifying identity, confirming payments, and facilitating offline transactions. This will reduce transaction costs, especially for SMEs, and strengthen Europe’s digital sovereignty.

Another major milestone was the adoption of the VAT in the Digital Age legislative package on 11 March 2025. This enables automated VAT reporting through e-invoicing, simplifying data extraction and supporting sustainability reporting. Exploratory work is underway to align this functionality with the European Financial Reporting Advisory Group (EFRAG)’s sustainability standards, using e-invoices to meet environmental reporting obligations efficiently.

II.Simplification through improved governance

Ensuring the effectiveness of this comprehensive simplification agenda requires improved governance. The Digital Decade Board (DDB) has emerged as the primary forum for coordination between the Commission and Member States on digital policy implementation. With a broad mandate, the DDB brings together national representatives to align digital measures, share best practices, and assess emerging challenges in the regulatory landscape.

The DDB has discussed several avenues to reduce administrative burden: (i) simplification through digital tools; (ii) the setting up of a Digital Single Rulebook;(iii) the setting up of a Single Digital Compliance Platform or (iv) codifying compliance requirements into a single interface. There are also some possible synergies regarding overlaps and fragmentation across the Commission’s expert groups, which may exceed the administrative capacity of national authorities. As a first step, the Commission is conducting an overview of all advisory bodies linked to digital legislation to support internal coordination within Member States and improve strategic alignment. The potential streamlining of these structures will in particular be considered as part of the 2026 review of the Digital Decade Policy Programme (DDPP).

b.Funding the Digital Decade

The priority given to the digital transition by the Commission is reflected in the EU budget’s commitment. Nearly all EU programmes contribute to digital goals, with key focus areas including the digitisation of public services, digital skills, business digitalisation, advanced digital infrastructure (such as 5G, AI, quantum, and cloud technologies), and support for research and innovation. Health and transport are two other major sectors targeted for digital transformation 122 . 

The Joint Research Centre (JRC) 123  study on five major programmes—RRF, CEF Digital, Horizon Europe, DIGITAL, and Cohesion Policy—estimates that between 2020 and 2027, a total of EUR 207 billion in public money will support digital objectives. Of this, EUR 177.5 billion directly contributes to achieving the EU’s Digital Decade targets. The RRF alone accounts for over EUR 149.8 billion in public digital investments, with EUR 135.7 billion directly aligned with the targets, making it the single most significant contributor to digital investments in the EU 124 . It plays a leading role in promoting basic digital skills, the training of ICT specialists, gigabit network coverage, digital public services, semiconductors, and eHealth, contributing over 70–90% of the relevant funding in each of these areas. 

Figure 1: Relevant budget by funding instrument and Digital Decade target, in billion EUR (on the left) and as % (on the right)

Source: JRC Calculations

In addition to public funding, mobilising private investments plays a crucial role. The EU is increasingly using its budget to support private digital investment through tools such as InvestEU, Joint Undertakings (JUs), and Public-Private Partnerships (PPPs). As of March 2025, InvestEU has mobilised EUR 15.88 billion in digital-related investments. However, financial instruments are not yet fully taken advantaged of in all programmes 125  and often lack a strong policy steer or the scale needed to address systemic investment gaps. Blending instruments and guarantees (e.g. InvestEU) show promising results in this area. Depending on the level of technology readiness, leveraging factors from financial instruments (i.e. the amount of private money that is invested alongside every euro of public money) are currently around 3 for early-stage deep-tech companies (European Innovation Council Fund equity) and around 5.62 from the InvestEU guarantee 126 . Overall, the EU faces a substantial and urgent need to increase investment in digital technologies, infrastructure, and innovation ecosystems. Bridging the investment gap, estimated in the hundreds of billions annually, requires not only more funding, but smarter, better-targeted financial instruments, deeper capital markets, and stronger coordination across EU and national programmes. Strategic public support will remain essential in high-risk areas such as AI, cybersecurity, and deep tech, while effective leveraging of private investment will be key to achieving scale and impact. As Europe prepares for its next Multiannual Financial Framework (MFF) and advances its Digital Decade objectives, aligning funding with strategic priorities and maximising impact through higher coordination, across programmes and across the EU, will be critical to securing Europe’s digital sovereignty and long-term competitiveness.

c.Cooperation with cities and regions

In the context of the Digital Decade, the European Commission is strengthening its cooperation with cities and regions, recognising that subnational governments play a pivotal role in implementing and disseminating digital policies that affect businesses, public services, and citizens on the ground.

With over 90 000 local governments across the EU and EFTA, greater coordination will be critical for digital transformation to scale, to avoid duplication, improve interoperability, and share knowledge and digital infrastructure. Although innovation clusters and large cities are accelerating their digital transition, many smaller municipalities and rural areas are falling behind. To accelerate the dissemination of digital technologies across the EU and bridge the divide between innovation hot spots (typically in large cities) and the smaller cities that often lag behind, cities must be seen not just as implementers of policy made elsewhere, but as strategic partners building on their proximity to citizens and SMEs.

In this context, the Digital Decade Policy Programme (DDPP) offers a valuable opportunity and framework for cities to align digitalisation with wider priorities such as climate action, mobility, housing, and social inclusion. The DDPP also contributes as a strategic framework to the upcoming Commission policy agenda for cities, initiated at the start of the new mandate.

Aligning digitalisation with wider priorities will require accurate and timely data aligned with the Digital Decade targets and objectives. In 2024, the EU’s LORDIMAS monitoring tool allowed self-assessments from 99 regional, metropolitan, and local administrations, offering insights on EU digitalisation at subnational level. As of March 2025, 184 administrations had joined LORDIMAS, with continued outreach to expand participation. This effort complements other initiatives, such as the LDT-CitiVERSE (see above), Living-in.EU and Local Observatories that are developed by cities to track digital progress and better target investment, especially in areas like urban resilience, and bridging the digital divide.

Cooperation with cities also includes the set-up of digital ecosystems that integrate skills development, connectivity infrastructure, and support for enterprises, especially SMEs. European Digital Innovation Hubs (EDIHs) and AI Testing and Experimentation Facilities (TEFs), such as CitCom.ai, offer cities and local actors the tools to test and deploy emerging technologies in real-world conditions. CitCom.ai, launched in January 2025 with EUR 40 million in EU co-funding, is already trialling AI applications in smart mobility, energy, and urban planning across 11 EU countries. The Commission also continues to support cities’ connectivity through targeted investment in high-speed broadband, 5G, and fibre infrastructure. Over 7 200 municipalities have benefited from WiFi4EU, an EU-funded programme to deliver free wifi to towns and villages across Europe, improving access to connectivity in remote areas.

Cities are also key actors in upholding the European Declaration on Digital Rights and Principles. Local initiatives such as the Brussels Digital Rights Charter and Leipzig’s Hardware for Future project reflect the values of equity, transparency, and citizen empowerment. The Cities Coalition for Digital Rights, supported by the Commission, helps scale and replicate such efforts across Europe.

(1)

 Draghi, M., The future of European competitiveness , 2024, Part A – A competitiveness strategy for Europe.

(2)

 Joint Research Centre, Nindl, E., Napolitano, L., Confraria, H., Rentocchini, F., Fako, P., Gavinan, J. and Tuebke, A., The 2024 EU Industrial R&D Investment Scoreboard, 2024 .

(3)

Joint Research Centre, Eulaerts, O., Grabowska, M. and Bergamini, M., Weak signals in Science and Technologies - 2024, 2025.

(4)

Source: Eurostat ( Statistics | Eurostat ). This indicator measures the importance of the ICT sector in the economy, reflecting the strength of the innovation ecosystems.

(5)

In compliance with EU rules.

(6)

European Commission based on Dealroom data.

(7)

 European Commission,  Savings and Investments Union, A Strategy to Foster Citizens’ Wealth and Economic Competitiveness in the EU , COM(2025) 124 final, 2025.

(8)

Website:  https://esnalliance.eu/ .

(9)

 Statista, 2025 ( Volume of data/information created, captured, copied, and consumed worldwide from 2010 to 2023, with forecasts from 2024 to 2028 ).

(10)

The current KPI for the 5G target does not reflect the actual quality of service experienced by users. It monitors areas where a 5G signal is available, regardless of the network performance. The current stage of 5G deployment can be considered only as "basic 5G”.

(11)

All relevant statistics related to 5G can be found at the Commission’s 5G Observatory website: https://digital-strategy.ec.europa.eu/en/policies/5g-observatory . 

(12)

Ookla. Omdia. A Global Evaluation of Europe’s Digital Competitiveness in 5G Standalone , 2025.

(13)

 Detecon International GmbH, Study on Mobile satellite services (MSS) in the 2 GHz band in the EU , 2025.

(14)

Meaning covering low Earth orbit (LEO), medium Earth orbit (MEO) and geostationary Earth orbit (GEO).

(15)

Edge Observatory for the Digital Decade, Edge Deployment Data report 1 , 2023. 

(16)

Edge observatory for Digital Decade , Edge Deployment Data Report – 3rd report , 2024 .

(17)

Lennart Heim, Markus Anderljung, Emma Bluemke, Robert Trager, Centre of the Governance of AI, “ Computing Power and the Governance of AI ”, 2024.

(18)

 EPOCH AI, Notable AI models , 2025. 

(19)

OECD (2023) " A blueprint for building national compute capacity for AI ", OECD Digital Economy Papers, No. 350, OECD Publishing, Paris.

(20)

 Hintemann, R.; Hinterholzer, S.; Progni, K. (2024a). Data centes in Germany - Current market developments 2024. Berlin: Bitkom e.V. Retrieved from Bitkom e.V. website: https://www.bitkom.org/Bitkom/Publikationen/Studie-Rechenzentren-in-Deutschland .

(21)

Ibid.

(22)

An upcoming study will consolidate these figures and provide DG CNECT with more granular data on capacity and needs, today and in 2030.

(23)

  AI Continent Action Plan , COM(2025) 165 final.

(24)

Please note that measures included in the national roadmaps might draw on existing funding programmes and might include investments under the IPCEI mentioned in this paragraph.

(25)

  Key Performance Indicators for Quantum Technologies in Europe , Strategic Advisory Board of the European Quantum Flagship, March 2025. 

(26)

The signature of the Quantum Declaration by 26 Member States confirming the strategic importance of quantum technologies and committing to collaborating on the development of a world-class quantum technology ecosystem across Europe.

(27)

 Draghi, M., The future of European competitiveness , 2024. According to another independent report by Olivier Ezratty, several US quantum firms attracted private VC funding in hundreds of millions of dollars whereas most EU start-ups operate with under EUR 20 million (Opinions Libres, Understanding quantum technologies 2024 ). 

(28)

  European Innovation Council, STEP scale up .

(29)

Available at: https://destination-earth.eu/ .

(30)

  Europe’s choice, Political Guidelines for the next European Commission 2024−2029 , 2024 (page 9).

(31)

 De Nigris, S., Kalpaka, A. and Nepelski, D., Characteristics and regional coverage of the European Digital Innovation

Hubs network, Publications Office of the European Union , Luxembourg, 2023, doi:10.2760/590526, JRC134620.

(32)

 European Commission: Joint Research Centre, Carpentier, E., D’Adda, D., Nepelski, D. and Stake, J., European Digital Innovation Hubs Network’s activities and customers, Publications Office of the European Union, Luxembourg, 2025, https://data.europa.eu/doi/10.2760/7784020 , JRC140547; and Joint Research Centre, Nepelski, D. and Stake, J., The EDIH SME DMAT 2.0: Revision of the EDIH Digital Maturity Assessment Framework for SMEs, Publications Office of the European Union, Luxembourg, 2024, JRC141446.

(33)

Dealroom, Artificial intelligence, 2024. Available at: https://app.dealroom.co/sector/technology/artificial%20intelligence/overview .

(34)

Dealroom, Artificial intelligence, 2024. Available at: https://app.dealroom.co/sector/technology/artificial%20intelligence/overview?hqType=regions&hqValue=EU27 .

(35)

They were submitted by Finland (with Czechia, Denmark, Estonia, Norway and Poland), Italy (with Austria and Slovenia), Spain (with the participation of Portugal, Romania and Türkiye) as well as Luxembourg, Sweden, Germany, and Greece.

(36)

Located in Austria, Bulgaria, France, Germany, Poland, and Slovenia. Bringing together 17 Member States and two EuroHPC Participating States.

(37)

The Best Practice Accelerator (BPA) is a platform that enables Member States to share successful measures and challenges encountered in their efforts to meet their Digital Decade targets and objectives. Best practices are available to all Member States via the BPA Repository and showcased in regular workshops, currently focused on three thematic clusters: Digital Skills, Green IT, and the Uptake of Digital Technologies. 

(38)

ENISA, 2024 Report on the State of Cybersecurity in the Union , 2024.

(39)

Joint Research Centre , Cyber security in the health and medicine sector , 2024.

(40)

Cyberint platform,  Ransomware Annual Report 2024 , 2025. 

(41)

SonicWal, SonicWall 2024 Mid-Year Cyber Threat Report , 2024.

(42)

 ENISA, 2024 Report on the State of Cybersecurity in the Union , 2024.

(43)

 ISC2, 2024 Cybersecurity Workforce Survey Focus on the E.U , 2024. 

(44)

 Please see the website: https://digital-skills-jobs.europa.eu/en/cybersecurity-skills-academy .

(45)

  European Cybersecurity Skills Framework (ECSF) | ENISA .

(46)

Eurostat  (isoc_cisce_ra)  and  (isoc_cisce_ic) ; Eurostat, https://ec.europa.eu/eurostat/statistics-explained/index.php?title=ICT_security_in_enterprisesICT security in enterprises , 2024.

(47)

 Compared to 2022. ENISA, NIS Investments 2024 , 2024.

(48)

 Directive (EU) 2016/1148 repealed by  Directive (EU) 2022/2555 on measures for a high common level of cybersecurity across the Union (NIS 2 Directive).

(49)

ENISA,  2024 State of Cybersecurity Report , 2024.

(50)

 EU Internet Standards Deployment Monitoring Website, available at:  https://ec.europa.eu/internet-standards/downloads.html . 

(51)

  Regulation (EU) 2024/2847 on horizontal cybersecurity requirements for products with digital elements and amending Regulations (EU) No 168/2013 and (EU) 2019/1020 and Directive (EU) 2020/1828 (Cyber Resilience Act).

(52)

  Regulation (EU) 2025/38 laying down measures to strengthen solidarity and capacities in the Union to detect, prepare for and respond to cyber threats and incidents and amending Regulation (EU) 2021/694 (Cyber Solidarity Act).

(53)

 For more information, please see the website: https://digital-strategy.ec.europa.eu/en/library/proposed-regulation-managed-security-services-amendment .

(54)

  European action plan on the cybersecurity of hospitals and healthcare providers , COM (2025) 10 final.

(55)

 For more information, please see the website: https://digital-strategy.ec.europa.eu/en/news/commission-launches-new-cybersecurity-blueprint-enhance-eu-cyber-crisis-coordination .

(56)

 Commission Recommendation (EU) 2024/779 of 26 February 2024 on Secure and Resilient Submarine Cable Infrastructures , OJ L, 2024/779, 8.3.2024.

(57)

 Eurostat, European Union Survey on the Use of ICT in Households by Individuals. Available at: https://digital-decade-desi.digital-strategy.ec.europa.eu/datasets/desi/charts/desi-indicators  

(58)

At least basic digital skills in the EU. Historical data, Digital Decade trajectory and revised baseline trajectory towards 2030.

(59)

 European Commission, Joint Research Centre, Bertoni, E., Cosgrove, J., & Cachia, R. (2025). Digital Skills Gaps – A Closer Look at the Digital Skills Index (DSI 2.0) , 2025. JRC140617.

(60)

ICILS 2023 International Report: An International Perspective on Digital Literacy. Available here: https://www.iea.nl/studies/iea/icils/2023

(61)

 European Commission, A Union of Skills to Equip People for a Competitive Europe , Press Release, Brussels, 5 March 2025. 

(62)

 European Commission, Action Plan on Basic Skills, 2025.

(63)

 European Commission, STEM Education Action Plan , 2005.

(64)

 European Commission, European Digital Skills Awards. Available at:  https://digital-skills-jobs.europa.eu/en/european-digital-skills-awards-2025 .

(65)

 European Commission, Digital Skills and Jobs Platform. Available at: https://digital-skills-jobs.europa.eu/en .

(66)

 Draghi, M., The future of European competitiveness , 2024, Part A – A competitiveness strategy for Europe.

(67)

 European Commission, The Public Procurement Data Space (PPDS). Available at: https://single-market-economy.ec.europa.eu/single-market/public-procurement/digital-procurement/public-procurement-data-space-ppds_en  

(68)

 Special Eurobarometer 566 on ‘the Digital Decade’ 2025, available at this link: https://digital-strategy.ec.europa.eu/en/news-redirect/883227 .

(69)

European Commission, The Single Digital Gateway and Your Europe. Available at: https://single-market-economy.ec.europa.eu/single-market/single-digital-gateway_en  

(70)

 The Once-Only Technical System (OOTS) streamlines data retrieval for cross-border procedures, enhancing trust, efficiency, and data exchange among EU public administrations and citizens. It is an EC solution. Available at: https://interoperable-europe.ec.europa.eu/collection/digital-building-blocks/solution/once-only-technical-system-oots  

(71)

   Regulation (EU) No 910/2014 on electronic identification and trust services for electronic transactions in the internal market and repealing Directive 1999/93/EC. See also: European Commission, A Digital ID and Personal Digital Wallet for EU Citizens, Residents and Business. Available at: https://ec.europa.eu/digital-building-blocks/sites/display/EUDIGITALIDENTITYWALLET/EU+Digital+Identity+Wallet+Home .

(72)

European Commission, The Public Procurement Data Space (PPDS). Available at: https://single-market-economy.ec.europa.eu/single-market/public-procurement/digital-procurement/public-procurement-data-space-ppds_en  

(73)

On these topics and the potential for simplification, please see also section 5.a.i of this document.

(74)

  Interoperable Europe Act , COM(2022) 720 final.

(75)

  Regulation (EU) 2025/327 of the European Parliament and of the Council of 11 February 2025 on the European Health Data Space and amending Directive 2011/24/EU and Regulation (EU) 2024/2847.

(76)

European Commission, Digital Europe Programme. Available at: https://digital-strategy.ec.europa.eu/en/activities/digital-programme  

(77)

 European Commission, New European Bauhaus. Availabile at:  https://new-european-bauhaus.europa.eu/index_en  

(78)

 DigiNEB. Available at: https://digineb.eu/   DigiNEB,

(79)

European Commission, Citiverse. Available at: https://digital-strategy.ec.europa.eu/en/factpages/citiverse  

(80)

Specifically, considering the call results of ‘HORIZON-MISS-2025-04-CIT-02: Innovative, AI-based solutions for urban planning and management’.

(81)

European Court of Auditors , Special Report: Smart cities Tangible solutions, but fragmentation challenges their wider adoption , 2023.

(82)

 Digital Services Act (DSA): Amazon EU Store Transparency Report. Available at:  https://trustworthyshopping.aboutamazon.com/dsa-digital-services-act-amazon-eu-store-transparency-report ; Google Transparency Report: Signed-out recipients, versus 459 million signed-in recipients. Available at:  https://transparencyreport.google.com/report-downloads?hl=en ; Google Transparency Report: Signed-out recipients, versus 356 million signed-in recipients. Available at: https://transparencyreport.google.com/report-downloads?hl=en ; Google, Information about Monthly Active Recipients under the Digital Services Act , 2025.

(83)

 Eurostat,  [isoc_ec_ib20] Internet purchases by individuals (2020 onwards) .

(84)

 At least one of the following: blocked or limited cookies, checked website security where personal data is provided, limited access to social media profile or shared content, read privacy policy statements, refused use of personal data for advertising, restricted or refused access to geographical location. These are the activities used by Eurostat for calculating individuals’ safety skills. Indicator: Privacy and protection of personal data (2020 onwards), Eurostat: isoc_cisci_prv20

(85)

 European Commission, Justice, rights and values, October 2024, Eurobarometer survey

(86)

See data of the DSA transparency database: https://transparency.dsa.ec.europa.eu/  

(87)

 European Commission, E-commerce communication: A comprehensive EU toolbox for safe and sustainable e-commerce. Available at:   https://digital-strategy.ec.europa.eu/en/library/e-commerce-communication-comprehensive-eu-toolbox-safe-and-sustainable-e-commerce  

(88)

 European Commission, Europe’s Choice, Political Guidelines for the next European Commission 2024−2029 , 2024.   

(89)

 See e.g. Council Conclusions on the European and international policy agendas on children, youth and children’s rights, 18 May 2024, https://data.consilium.europa.eu/doc/document/ST-9769-2024-INIT/en/pdf and the follow-up to the WHO-UNICEF-Lancet Commission, https://www.who.int/initiatives/a-future-for-the-worlds-children .

(90)

 Special Eurobarometer 566 on ‘the Digital Decade’ 2025: https://digital-strategy.ec.europa.eu/en/news-redirect/883227 .

(91)

 Health Behaviour in School-aged Children (HBSC) international report from the 2021/2022 survey presented in 2024, updated every four years, in collaboration with the WHO Regional Office for Europe. A focus on adolescent peer violence and bullying in Europe, central Asia and Canada. Health Behaviour in School-aged Children international report from the 2021/2022 survey. Volume 2 .

(92)

 Ibid, Volume 6. A focus on adolescent social media use and gaming in Europe, central Asia and Canada: Health Behaviour in School-aged Children international report from the 2021/2022 survey .

(93)

Boniel – Nissim M et al.,  International perspectives on social media use among adolescents: Implications for mental and social well-being and substance use , 2022.

(94)

Better Internet for Kids – Review of year 2024. Available at:  https://better-internet-for-kids.europa.eu/en/about/insafe-inhope .

(95)

Children's Internet. Report on monitoring the presence of children and young people on the Internet . 2025 (in Polish).

(96)

Joint Research Centre, Cabeza Martínez, Begoña and d'Hombres, Beatrice and Kovacic, Matija, Social Media Use, Loneliness and Emotional Distress Among Young People in Europe (January 09, 2025). Ca' Foscari University of Venice, Department of Economics Research Paper Series No. 01/2025, Available at SSRN: https://ssrn.com/abstract=5089729 . The paper uses survey sample from people aged 16-35.

(97)

In particular the provisions on protecting minors against harmful content (Articles 6a and 28b) and the requirement to adopt appropriate measures to that end, including through age verification.

(98)

GDPR states that processing of children personal data merit special protection. For example, the GDPR provides for explicit requirement to use child-friendly language and provides for rules on age of consent for information society services.

(99)

Indicator Evaluating data, information and digital content (2021 onwards), Eurostat: isoc_sk_edic_i21 , year 2023.  

(100)

Commission Recommendation (EU) 2023/2829 of 12 December 2023 on inclusive and resilient electoral processes. It includes different recommendations on protecting the integrity and resilience of the electoral process. For example, it encourages Member States to take measures to protect the information environment around elections and ensure that voters receive correct information. It recommends building resilience and developing public awareness, media literacy and critical thinking to address information manipulation, interference and disinformation related to elections. It also calls on Member States to develop training to relevant authorities and to facilitate cooperation among relevant stakeholders to tackle the information manipulation risks.

(101)

In the context of this network, Member States discussed practical solutions to a range of threats including FIMI and disinformation. One of the operational tools is the joint election resilience mechanism, which supports exchanges among Member State experts, which several Member States used in the run-up to the elections.

(102)

 European Commission, Commission publishes guidelines under the DSA for the mitigation of systemic risks online for elections. Available at: https://digital-strategy.ec.europa.eu/en/news/commission-publishes-guidelines-under-dsa-mitigation-systemic-risks-online-elections  

(103)

 European Commission, Commission presents new best-practice election toolkit on the Digital Services Act. Available at: https://digital-strategy.ec.europa.eu/en/news/commission-presents-new-best-practice-election-toolkit-digital-services-act  

(104)

See the Commission’s Report on the 2024 elections to the European Parliament (publication pending at the time of writing).

(105)

 Regulation (EU) 2024/900 on the transparency and targeting of political advertising .

(106)

Centre for Media Pluralism and Media Freedom, Technical Report, EUI, RSC, Research Project Report,  2024. Available at:

Monitoring media pluralism in the digital era: application of the media pluralism monitor in the European member states and in candidate countries in 2023.

(107)

  Regulation (EU) 2024/1083 establishing a common framework for media services in the internal market and amending Directive 2010/13/EU (European Media Freedom Act).

(108)

 Joint Research Centre European Commission, 5 digital solutions for a greener Europe , 2023.

(109)

  European Union Agency for the Cooperation of Energy Regulators, Country Sheets : Monitoring data 2023 , 2024.

(110)

International Energy Agency (2023), Digital Demand-Driven Electricity Networks Initiative , 2024.

(111)

McKinsey & Company,  The Economic Potential of Generative AI: The Next Productivity Frontier , 2023.

(112)

IEA,  AI and Energy ,2025.

(113)

GSMA,   Energy Efficiency in Mobile Networks: A Roadmap to 2030 , 2023.

(114)

   Circular water solutions key to sustainable data centres | World Economic Forum .

(115)

 Islam M.A. , Li P., Ren S., Yang J., Making AI Less “Thirsty”: Uncovering and Addressing the Secret Water Footprint of AI Models , 2023.

(116)

 European Commission, The twin green & digital transition , 2022.

 

(117)

 European Commission, Simplification and implementation. Available at: https://commission.europa.eu/law/law-making-process/better-regulation/simplification-and-implementation_en . 

(118)

 European Commission, A simpler and faster Europe , 2024. 

(119)

 Draghi, M., The future of European competitiveness , Part A – A competitiveness strategy for Europe, pg.14 2024. 

(120)

EIB Investment Report 2024–2025, European Investment Bank.

(121)

 European Commission, EU SMEs and self-employed workers could save time and money when expanding abroad thanks to the once-only technical system , 2024.

(122)

 The latest stocktaking exercise referred to EU spending from 2021 to 2023 shows that approximately EUR 205.5 billion—around 17.5% of the total EU budget—was dedicated to the digital transition. A significant portion of this funding was mobilized through the Recovery and Resilience Facility (RRF), which in the same period allocated 24% of its total budget to digital investments and reforms. Available at: https://commission.europa.eu/strategy-and-policy/eu-budget/performance-and-reporting/horizontal-priorities/digital-tracking_en  

(123)

 Joint Research Centre, Nepelski, D. and Torrecillas, J. Mapping EU level funding instruments 2021-2027 to Digital Decade targets – 2025 update, Publications Office of the European Union, Luxembourg, 2025, JRC141966.

(124)

Including measures in the Repower EU chapters contributing to the digital transition. Last update on 10 March 2025.

(125)

As an example of needed flexibility, the EIC blended finance allows successful companies to decouple the timing of the grant and equity finance, without the need to go through a new application process when the time is ripe (e.g., when co-investors have been found). See also Mundell, The ecosystem: European Innovation Council uncouples grant and equity funding for startups, 2024. Available at:  https://commission.europa.eu/strategy-and-policy/eu-budget/performance-and-reporting/horizontal-priorities/digital-tracking_en .

(126)

From the Interim evaluation of the InvestEU Programme (1 October 2024).