EUROPEAN COMMISSION

Brussels, 27.9.2023

SWD(2023) 572 final

COMMISSION STAFF WORKING DOCUMENT

Digital Decade Country Reports

Accompanying the document

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

Report on the state of the Digital Decade 2023

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Introduction

Austria is expected to make a positive contribution to the collective efforts to achieve the EU’s Digital Decade targets. Austria performs well on the cardinal points on digital skills, the integration of digital technologies, and digital public services. However, further efforts are needed in digital infrastructures.

Austria is aiming at improving further its performance and demonstrates a greater ambition. Austria’s vision ‘ Digital Austria in 2040-2050’ , which includes the values and characteristics of a digital responsible society, is the starting point for Austria’s overall digitalisation strategy and is aligned with the Digital Decade Policy Programme. This vision together with the principles and guidelines provide the necessary framework for the Digitalisation Strategy (Digital Action Plan Austria), which consists of several chapters focusing on priority topics selected by the respective responsible departments. These make references to and are aligned with the Digital Decade Policy Programme.

The Digital Action Plan  is an evolving strategy that aims to successfully cope with the digital transition. In 2022, plans on the topics of digital universities, digital talents, digitalisation for tourism have been drawn up or planned (e.g. skills in public administration). With the Digitalisation Strategy, Austria aims to make the ‘System Austria’ crisis-proof by exploiting the opportunities of digitalization, to enhance competitiveness, to position Austria as a digital innovative region, to make targeted use of data for innovation, to design education, training and continuing education as a digital competitive advantage, to promote top digital research in a targeted manner and to facilitate digital communication between the state and its citizens. This way Austria pursues the goal to establish its role as a leading digital nation and to guarantee and expand prosperity, job opportunities and the quality of life in the long term. Moreover, in May 2022, digital competencies were bundled in the Austrian Ministry of Finance, responsible for digitalisation and infrastructure including broadband development. While the above shows a strategic approach, some stakeholders, i.e. telecom operators call for better governance in terms of institutional structure, with one centralised digitalisation agency and clearer regulatory responsibilities.

Austria is collaborating with other Member States on a proposal for a European Digital Infrastructure Consortium (EDIC) for the establishment of a Cybersecurity Skills Academy.

1 Digital skills

Austria performs well in digital skills. On basic digital skills, however, although Austria significantly exceeds the EU average (63% compared to 54%), there is ample room for improvement to reach the 2030 target of at least 80% of the population having a basic level of digital skills. There seems to be a consensus on the need for further effort in this respect in Austria, given that upskilling the workforce in terms of digital skills would also help ease the significant shortage of skilled workers (‘Fachkräftemangel’). Moreover, digital literacy is essential to enable citizens to participate in modern life and to ensure no one is left behind.

At the same time, it is important to mention that a third of the Austrian population possesses above basic digital skills. Also on a positive note, 75% of Austrians has at least basic digital content creation skills, compared to the 66% EU average, and 90% of the Austrian population uses the internet.

Still, Austria lacks ICT specialists. According to the latest “ Austria Infrastructure Report ”, two out of three managers complain that there are too few IT specialists in their company. This perception is confirmed by the available data; while Austria’s share of ICT specialists in the labour force (5.0%) exceeds the current EU average (4.6%), the share is low considering the composition of the Austrian economy and was identified as a weakness in recent European Semester reports. The lack of ICT specialists can also have an impact on the ability to meet or contribute to other Digital Decade targets. For example, the ambitious initiatives of Austria in the field of quantum computing 2 also require the availability of highly specialised ICT specialists combining expertise in several different fields.

Therefore, in order to expand basic digital skills among the population for everyday life as well as in more specific fields, Austria is launching a ‘ Digital Skills Initiative: Closing the Digital Skills Gap in Austria’ , involving the collaboration of four key ministries. An overarching strategy, a clear structure and a joint platform have been established since Q3 of 2022 to bundle forces and create a broad commitment for joint implementation, with a budget of EUR 3.5 million in 2023 running until 2030. For Austria’s economic and innovative strength to remain strong and continue to grow in the light of digitalisation, the goal is to help both basic users and ICT professionals build up the necessary level of skills to keep up in a digital world. The future challenge is to reach as many people as possible and to provide them with attractive, high-quality educational opportunities.

To address these upcoming challenges, a strategy has been developed as the part of Digital Skills Initiative. In a nationwide stakeholder process the strategy ‘Digital Skills Austria’ was developed in recent months involving more than 500 experts and stakeholders from 80 different institutions. Around 350 measures and initiatives have been identified, clustered and bundled.

The strategy aims to strengthen digital skills among Austria’s population through targeted measures in strategic priority areas – from basic digital skills for the general population to top digital skills for business cases. For this reason, the ‘Geschäftsstelle für Digitale Kompetenzen (Digital Skills Department)’ was introduced in April 2023. The purpose of the Digital Skills Department, established within Austria's Agency for Education and Internationalisation (OeAD-GmbH), is to provide operational support for the initiative.

In the near future, for example, under the coordination of the Digital Skills Department, the National Framework for Digital Skills (DigComp 2.3 AT) will be further developed and implemented nationwide. It is based on the European Digital Competence Framework (DigComp 2.1) and aims to gain broad acceptance among Austria's population. Digital skills courses will be labelled based on referencing processes, making it easier to choose appropriate classes and unify regional and national course categorisation. In autumn 2023, the Digital Skills Initiative will launch a pilot project called ‘Digital Skills for All’. Its aim is to provide low-threshold educational opportunities to help all citizens acquire basic digital skills. Following the concept phase, the project will conduct 400 workshops throughout Austria from October to December 2023. After an evaluation phase, a more extensive workshop series called ’Digital Überall’ (Digital Everywhere) will act as a follow-up in 2024 to reach a larger portion of Austrian citizens.

In terms of share of SMEs providing ICT training Austria performs below the EU average (19% versus 21%), and several existing measures to support the take-up of digital skills in SMEs are being continued. A well-received example is the ’Digital Skills Vouchers’ with the objective of increasing digital skills in SMEs in Austria. A budget of EUR 3.2 million has been allocated so far to support the professional development of employees in digital skills such as IT management, cyber security, cloud services and e-commerce. The current third call is open until 30 June 2023 with a budget of EUR 0.8 million. Another well-established and continued initiative is the ‘ Digi-Scheck’ for apprentices which supports trainees and training companies in teaching future-oriented skills including in the area of digitisation, as part of vocational training. Funding is provided for 100% of the participation costs up to an upper limit of EUR 500 per educational measure and up to three individual measures per 2023 and 2024 calendar years. A third measure to highlight is the programme ‘ Digital pro bootcamps’ , which in 2022 launched its third call for the implementation of digital pro bootcamps with a budget of EUR 2 million. The focus has been set on projects in the subject areas of artificial intelligence, big data, blockchain and e-commerce. In these bootcamps, highly motivated employees from participating companies are trained to become 'digital professionals' within 4 weeks. The future IT professionals should then be able to be fully entrusted with IT projects in the company and further advance the digitalisation agendas.

To increase the number of ICT graduates, which corresponds to 4.8% of graduates (the EU average is 4.2%), Austria is also actively engaged, which could also ease the situation on the lack of ICT specialists in the long term. An example is the ‘ Digital Pioneers Programme’ , which is running for the third time in 2023 and offers young women insights into digital and technical professions to encourage them to start a career in STEM fields and the opportunity to complete a digital year. This is a funded apprenticeship and paid internship so that women can gain a better understanding of professions of the future within industry and acquire valuable skills and experience. In an 8-week basic training, young women acquire skills needed for a successful start in jobs with a high amount of digital content. Afterwards, they work on projects in a partner company for at least 8 months so that they can apply in practice what they have learned and at the same time get to know industrial digital jobs. Graduates from the Digital Pioneers programme receive a national diploma. The 2021 ’Women in Digital’ scoreboard shows that there is still potential upwards. In Austria only about 1.85% of total employment are female ICT specialists, compared to 1.91% at EU level and only 14.4 out of 1 000 inhabitants are female graduates in STEM professions, compared to 14.8 on EU average. The measure is focused on achieving gender balance in specialised digital skills.

2 Digital infrastructures

Regarding the Digital Decade targets related to connectivity, Austria shows a varied picture: Austria is fast approaching 5G coverage for all populated areas and especially coverage on the 3.4-3.8 GHz spectrum band with over 30 percentage points above EU average, but is still far from reaching fixed gigabit connectivity for all. With 55% fixed very high capacity network (VHCN) coverage, Austria continues to perform significantly below the EU average of 73%. However, coverage jumped by 10 percentage points (from 45% in 2021 to 55% in 2022), thanks to investments in fibre-to-the-premises (FTTP), accelerating the progress registered in previous years. To compare, VHCN coverage in the EU overall only increased by 3 percentage points between 2021 and 2022. Austria has also made significant progress in rural areas, a particular challenge for this mountainous country, where VCHN coverage has increased even more sharply (by 11 percentage points), from 16% in 2021 to 27% in 2022. Given this positive trend, Austria is expected to make an important contribution to reaching the 2030 EU gigabit connectivity target, provided it can expand access to VHCN, in particular in rural areas, at least at the current rate.

Progress driven by fibre deployment has been significant, with 10 percentage point increase in the last year and reaching 37% in 2022. Austria is still very far from a 100% coverage of gigabit connectivity with FTTP and is currently covering many households with DOCSIS 4 3.1 (40%). The positive trend also applies to rural areas, where FTTP coverage grew from 15% in 2021 to 23% in 2022, compared to an increase in DOCSIS 3.1. coverage from 1% to 6%. This can be traced back in part to publicly funded fibre deployment under Austria’s broadband plan (Breitband Austria 2030).

Austria’s broadband plan is driving progress on fibre coverage in underserved rural areas. The plan aims at nationwide gigabit connectivity by 2030, in line with the relevant Digital Decade target. It has an overall budget of EUR 1.4 billion, including EUR 891.2 million coming from the RRF, for deploying gigabit- capable fibre infrastructures in areas of Austria that are not or only insufficiently covered by the private sector. 5 Public funding under the plan has also incentivised private investment in particular in the state-owned open access networks, with more investment expected in the coming years. However, there may be inadvertent consequences for private network deployment in other areas: Austria’s three main telecom operators warn that the plan is preventing a selection of the most efficient and effective broadband deployment projects, as the larger part of funding under the plan is reserved for wholesale-only providers (state owned open access networks). Coupled with a persistent lack of demand, this disincentivises private network deployment in areas not covered by the plan and therefore potentially negatively affects Austria’s ability to reach the Digital Decade target of gigabit for all.

Low demand for and take-up of fixed very high capacity connections and strong fixed-to-mobile substitution are a persistent challenge for Austria to reach the Digital Decade fixed connectivity target. These demand side factors remain largely unaddressed. While take-up of at least 100 Mbps fixed broadband has increased from 22% in 2021 to 28% in 2022, it still lies significantly below the EU average of 55% and progress has slowed down compared to previous years (e.g. between 2020 and 2021, take-up increased from 14% to 22%). Moreover, there is no take-up of at least 1 Gbps by Austrian households, compared to 13.8% of households in the EU on average. Even where gigabit internet is available, Austrian end-users opt for lower speeds or mobile connections with comparable speeds. This can be partially explained by price: according to the 2021 Broadband Price Study , Austrian consumers enjoy below EU average prices for lower bandwidth offers but have to pay more than EU average for speeds above 100 Mbps. While prices for fixed and mobile broadband with speeds above 100 Mbps are similar, mobile cubes (i.e. devices transforming mobile data into WiFi) allow customers to avoid the potential inconveniences and additional costs of fixed broadband installation. According to the Austrian authorities, about one third of Austrian households are mobile only, and this percentage remained unchanged from the previous year.

Private network deployment by Austria’s three main telecom operators remains focused on urban areas and continues to be slowed down by lengthy decentralised permit granting procedures. In 2022, the Austrian regulator TKK (Telekom-Control-Kommission) deregulated the wholesale broadband access market after incumbent A1 concluded nationwide commercial access agreements with several alternative operators 6 . Considering that A1 has announced increased investments in fibre to the home/building (FTTH/B) for the coming years, this is expected to have a positive effect on Gigabit coverage in Austria. To further facilitate network deployment, operators call for full integration of information about nationwide planned civil works in the single information point ( Zentrale Stelle für Infrastrukturdaten - ZIS) and for simplification of the lengthy and bureaucratic permit granting procedures that differ from region to region. To address the latter, Austria established a dedicated working group in the context of PIA 2030 ( Plattform für Infrastrukturausbau Austria 2030 ) 7 , but operators report that discussions have stalled and there has been no progress over the past year. Notwithstanding, Austria has committed as part of its RRP to implement measures developed by the Platform to reduce red tape and simplify procedures for broadband deployment by Q4 2023.

While on fixed connectivity Austria is lagging behind, on mobile connectivity and 5G coverage it is a frontrunner. The framework conditions established under Austria’s  5G Strategy  (e.g. frequency allocations preceded by consultations, flexible spectrum use like sharing enabled) are bearing fruit. The strategy’s goal of nationwide 5G availability by the end of 2025, even more ambitious than the Digital Decade target, is within reach as operators continue to invest in and roll out 5G in the 3.6 GHz and 700 MHz bands. In parallel, preparatory talks for active infrastructure-sharing agreements to meet licence coverage obligations are ongoing.

As of 2022, 92% of populated areas are covered by 5G versus 81% in the EU overall, following a considerable jump of 15 percentage points. compared to 2021 (77%). The jump is even more strongly felt in populated rural areas, where 5G coverage rose from 36% in 2021 to a remarkable 69% in 2022. As regards the indicator 5G coverage on 3.4-3.8 GHz spectrum band, Austria exceeds the EU average by 33 percentage points with a coverage of 71% of populated areas and is well advanced towards achieving the related target. Individual take-up of mobile broadband exceeds the EU average with 91% versus 87% in the EU overall. Some operators have enabled 5G access without changing prices and offered 5G stand-alone services with guaranteed bandwidth for home internet including optional installation service.

To facilitate more advanced use cases, Austria is preparing to award spectrum in the 26 GHz band alongside remaining spectrum in the 3.6 GHz band. Following a second consultation on different options of the award procedure conducted in autumn 2022, the Regulatory Authority for Broadcasting and Telecommunications (RTR) expects to proceed with an action still in 2023. Moreover, the regulator is discussing with operators how to improve the energy efficiency of communication networks in order to enhance sustainability.

Removing existing obstacles to deployment in the context of the PIA 2030 requires identifying and implementing concrete measures to simplify and speed up decentralised procedure for granting permits. Moreover, this would also require expanding the single information point (ZIS) from covering existing infrastructure to covering information about planned civil works to maximise synergies and reduce costs along with the environmental footprint of network deployment. The same digital portal could then also be used for standardised permit granting procedures.

For the European target of reaching in the EU at least 20% of world production in value of cutting-edge semiconductors, in accordance with EU law on environmental sustainability, Austria is a strong actor and committed partner in the European institutionalised partnerships on electronic systems (Key Digital Technologies & European High-Performance Computing and their respective predecessors) and with major players present in Austria. Austria is also supporting the upcoming Chips Joint Undertaking. Austria plays an important role within the European Union.

Austria participates in the Important Project of Common European Interest (IPCEI) on Microelectronics, which is also part of the Austrian recovery and resilience plan. In the context of the latter the very first milestones were achieved, namely the Austrian projects regarding the development of innovative microelectronics and connectivity technologies have been selected based on recommendations of an independent expert panel, following the two-stage call for expression of interest. Documents regarding the second phase of the call for expression of interest have been published, including climate-related eligibility criteria, which will oblige potential beneficiaries to explicitly commit to the reduction of greenhouse gas (GHG) emissions within their project portfolios and estimate the extent of GHG savings. Moreover, the commitment to emission reductions will represent a key factor in the selection of projects within the subsequent jury process. More in details, Austria is involved in:

(1)IPCEI Microelectronic I, which has been running since March 2021 with a total investment in research & innovation (R&I) and first deployment of EUR 8.4 billion (including EUR 1.9 billion public funding), with the involvement of 30 enterprises and 2 R&I institutions from the participating countries Germany, France, Italy, United Kingdom and Austria. The objective of the project is research, development and first industrial deployment of microelectronic components and systems and their deployment in automotive, Internet of Things, aeronautic and IT-security. Austrian funding amounts to EUR 145 million.

(2)IPCEI ME/CT (microelectronics and communication technologies) is still in negotiation with 6 participating partners from Austria. The European IPCEI-project comprises in total 17 participating Member states with around 115 enterprises.

As regards the EU Digital Decade target for 2030 on edge nodes, no information has been shared so far by Austria on how it intends to contribute to the achievement of this target.

Austria is taking a leading role and is making a significant contribution to achieving the Digital Decade target of Europe being at the cutting edge of quantum technologies by 2030.

Austria is making its first steps in implementing its noteworthy measure on quantum in the Austrian recovery and resilience plan. The very first milestone, relating to the receipt of expression of interests from stakeholders and the setting-up of a resolution agency was fulfilled. Moreover, the operational use of this new technology is currently being promoted by the EU through the EuroQCI initiative, and first demonstrations are planned by 2023.  In close coordination with EuroQCI, Austrian organisations are also building support platforms and hosting workshops for all EuroQCI Member States to foster the EU initiative for a common quantum communication infrastructure in the EU. Recent projects are Quantum-safe Cryptography for Securing Governmental data ( QKD4GOV ), which aims at the establishment of a secure communication network between public authorities to investigate novel encryption schemes based on quantum key distribution (QKD) and post-quantum cryptography. Another noteworthy related project is QCI-CAT funded under the Digital Europe programme, which was launched in 2023. The project QCI-CAT aims at an adoption of modern encryption technology based on quantum key distribution for highly secure communication between public authorities.

3 Digitalisation of businesses

Productivity growth is lagging behind and the OECD found that the steady but modest labour productivity gains of Austria’s SME-driven economy are mostly due to improvements within specific sectors rather than shifts towards more productive high-tech sectors 9 . With only two thirds of SMEs reaching at least a basic level of digital intensity, Austria performs slightly below the EU average on this key performance indicator. This means that there is untapped potential to improve productivity within specific sectors by increasing digital intensity. Moreover, the current score is considerably below the EU target for 2030 of 90%.

At the same time, Austria is taking action. Since 2017 Austria has been providing support to SMEs with the programme ‘KMU.DIGITAL’, through which Austrian SMEs receive practical consulting and financial support for the implementation of digital technologies, with more than 20 000 consulting and implementation initiatives supported so far. In 2022 and 2023, EUR 10 million of public funds (both national and EU funds from the Austrian RRP) are being invested in the digital transformation of SMEs. The Austrian recovery and resilience plan also includes other measures to promote the digitalisation of businesses.

In relation to electronic information sharing and social media a higher number of Austrian enterprises uses these than the EU average (45% compared to 38% for electronic information sharing, and 38% to 29%). However, fewer enterprises issue e-invoices in Austria than enterprises on EU average (22% compared to 32%). While more Austrian SMEs sell online both within Austria and cross-border, than the EU average, they obtain a slightly lower turnover from these activities than on EU average.

The take-up of artificial intelligence (AI), cloud services and big data shows a mixed picture in Austria. Use of big data and cloud services is below the EU average in Austrian enterprises, while on AI Austria scores slightly higher than the EU average. The distance to the related ambitious Digital Decade target is significant. Despite Austria actively promoting these new technologies and taking action, efforts do not seem to be sufficiently bearing fruit yet. For instance, in terms of cloud uptake, while AT is only 5 percentage points below the EU average, it would still need to more than double its current cloud uptake to reach 75% by the end of the decade. Austria is thus encouraged to foster the use of new advanced cloud solutions among enterprises, in particular SMEs, and to contribute to enterprise advanced cloud upskilling including on cloud security and environmental performance while paying attention to gender equality.

Austria has been supporting digital key enabling technologies in its research and innovation programmes for many years. Notably, in relation to big data, in particular, the ‘ Data Intelligence Offensive (DIO) ’ was founded for this purpose with the objective of making the simple use and secure sharing of data by third parties more attractive and possible via innovative, decentralised use cases. In addition, Austria launched the Green Data Hub which supports the development of a data-service ecosystem in the fields of mobility, energy, circular economy and the digital climate twin.

Moreover, Austria continues to be part of the Gaia-X initiative. In this context, the ‘ Gaia-X Hub AT ’, which is still being set up, will support Austrian organisations in their adoption of data-based business models. The project aims at developing a digital governance that can be applied to any existing cloud/edge technology stack to obtain transparency, controllability, portability and interoperability across data and services.

In Austria several measures are ongoing that can help to increase the uptake of AI, for example the free online platform ‘AI Marketplace’ with already 140 registered AI providers and the ‘ AI Mission Austria (AIM AT) ’ funding initiative for research and innovation in this field, with a EUR 12 million budget for 2023.

Digital Innovation Hubs (DIHs) can be an effective tool to improve the digital intensity of SMEs and the uptake of technologies such as big data, artificial intelligence and cloud services. They are one-stop shops that support companies – in particular SMEs – and public sector organisations in their digital transformation. DIHs provide access to technical expertise and experimentation. They also provide innovation services, such as support with access to finance, training and skills development that are needed for a successful digital transformation. So far six national Digital Innovation hubs and four European Digital Innovation Hubs (EDIHs) 10 have been set up in Austria with 50% funding from Digital Europe. A seventh DIH is in the process of being launched on artificial intelligence with the objective of assisting SMEs in gaining a better understanding of artificial intelligence BMAW/FFG: Künstliche Intelligenz für den Mittelstand | FFG . Austria’s EDIHs, cover a wide range of fields, from manufacturing to agriculture.

As regards the European target to facilitate the growth of its innovative scale-ups and to improve their access to finance, leading to at least double the number of unicorns, Austria counts five unicorns out of 249 in Europe in 2022. Austria has several initiatives in place to support start-ups, scale-ups, spin-offs and SMEs in Austria. ‘ Start-up Landscape Austria’ , presented in December 2022, is the first publicly accessible, daily updated overview of participants in the start-up ecosystem in Austria. It is mapping the Austrian start-up ecosystem as realistically as possible and increases the visibility of the location in order to make it internationally comparable and to create network effects. ‘ Start-up Navigator ’ helps start-up founders and entrepreneurs find all relevant contact points on the topic of start-ups in Austria in one place on the internet. The platform includes contact points on federal level as well as on state level. Furthermore, Austria has established a state venture capital fund ’Start-up Fund II’ with up to EUR 72 million to succeed the fund that is coming to the end. The fund’s target group are innovative technology-oriented start-ups with a particular focus on sustainability and digitisation. Austria has increased its start-up funding via the existing channels like the Austrian promotional bank (AWS) and the Austrian Research Promotion Agency (FFG), targeting start-ups with tailormade funding programmes incubators, seed financing, spin-offs and scale-ups, partially also co-founded with EU funds.

As well as public investments there are also private investments to highlight, such as ‘ Fund F (Female Founders) ’, which is a venture capital fund with a focus on pre-seed investments and gender-diverse teams, and ‘ Speedinvest ’, a pan-European early-stage venture capital fund with its seat in Austria, which is active in raising new capital to help European start-ups scale to global success. Austria recently launched its first crypto fund called ‘ Venionaire Tigris Web3 ’, an alternative investment fund that invests in crypto assets on behalf of investors, including in decentralised finance and Web3 projects.

4 Digitalisation of public services  

As regards the Digital Decade target on digital public services for citizens, Austria performs well for national services with a score of 89.8, slightly above the EU average score of 89.0. However, it has a significantly worse performance for the online availability of digital public services which are cross-border, scoring only 67.1 (even if this score still slightly exceeds the EU average score of 65.1).

On the Digital Decade target on digital public services for businesses, with a score of 97.1 Austria matches the EU average of 97.3 for domestic users. As regards the cross-border dimension Austria scores 68.6 compared to 70.2 EU average, slightly below the EU average. Like for the target digital public services for citizens, there is a significant gap in performance when looking at the cross-border online availability of digital public services for businesses. This should also be kept in mind when implementing the Regulation on the Single Digital Gateway (SDG) 11 , which entered into force in December 2018. The implementation of the SDG is expected also to support Austria in overcoming its weakness in the cross- border online availability of digital public services for citizens and businesses.

Overall Austria is progressing well on providing eID solutions to its citizens. After the adoption of the positive opinion of the eIDAS Cooperation Network on the Austrian ID scheme in February 2022, Austria formally notified the ID Austria to the European Commission. It was published on 27 April 2022 in the Official Journal of the European Union ( 2022/C 173 I/01 ). After a 12-months implementing period for the other Member states, the ID Austria can be used in e-Government services across Europe from April 2023 onwards. Austria is involved via public and private entities in three large-scale pilot projects, that will be funded under the Digital Europe programme, with an overall grant request of over EUR 1.7 million. Austria is leading the work in one of the pilots on remote qualified electronic signature (rQES).

As regards e-health, Austria is a frontrunner. With a composite score of 88, Austria places 5th among Member states in facilitating citizens with full access to their electronic health records with a considerable leading edge over the EU average score of 72. Therefore, Austria is well on track to achieve the digital decade target related e-health. 12 Thanks to the opt-out regime in place for the participation of citizens in the Austrian electronic medical records system (‘Elektronische Gesundheitsakte’ - ELGA), in principle all electronic health records accessible via ELGA are already available to patients via eID login on the ELGA portal. The incremental roll-out of the eID solution ID Austria, issued to every citizen with the handout of renewed passports, will effectively make it even easier for citizens to access their electronic health records.  A dedicated mobile application is not available. However, the most significant limiting factor to full access to electronic health records for all citizens is the fact that only public primary, public secondary and tertiary hospitals together with pharmacies are connected to ELGA in meaningful number and are supplying relevant health-related data. The entire private care sector has not been connected.

On the demand side for digital public services, Austrians continue to use digital public services widely, with 78% of Austrian internet users compared to 74% of internet users on EU average.

In relation to the indicator pre-filled forms, Austria is performing above the EU average with a score of 71.2 compared to 67.5. Therefore, the amount of data which is pre-filled in public service online forms is relatively high.

To this good performance on the indicator pre-filled forms among others, a significantly contributing initiative is the once-only Platform including the Register & Systems Network (dadeX- Digital Austria Data Exchange) and the Information Obligation Database, which Austria set up following the adoption of the Business Service Portal Act. The following use cases using once-only methodology were launched in the second half of 2022 or Q1 2023. All these measures are important lighthouse projects for digitalisation of public services and the digital transformation of public administration:

·Criminal records, including financial, are checked automatically via dadeX by issuing a business licence. This innovation leads to a faster procedure for issuing more than 90 000 business licences each year.

·The continued receipt of the family allowance is checked automatically via dadeX for school children and apprentices. The submission of forms and paperwork are reduced.

·For the start-up of a “one person limited” enterprise, the company register evidence is traded automatically between the Ministry of Justice and the Ministry of Finance via dadeX.

·The proof of income for reduced kindergarten fees for the city of Graz are checked automatically via dadeX, so that parents don´t have to submit them personally.

As regards the newly added indicator on mobile friendliness, in Austria almost all services are provided through a mobile-friendly interface and Austria is a frontrunner in this respect. Austria is even very active on the international front on promoting mobile government. Austria is actively engaged in the worldwide initiative ‘World Bank GovTech Global Partnership’ and is co-leading the related working group, specifically on m-Government.

On the extent to which online support, help-features and feedback mechanisms are available, overall Austria scores slightly below the EU average (80.2 compared to 83.6). Moreover, user support is significantly better for national services (93.7) than for cross-border ones (66.7). Since on the latter Austria scores far worse than the EU average (74.3), there is significant room for improvement in Austria in the provision of user support for cross-border services.

Transparency of service delivery, design and personal data is at 71.1, which is well beyond the EU average of 64.7. This represents an area where Austria outperforms some frontrunners and could further increase its lead by taking additional steps to ensure that service processes are transparent, services are designed with user involvement and users can manage their personal data.

In relation to open data, Austria suggests participating in a multi-country project called Integrated Pan-European Digital Platform for AgriFood.

The Federal eGovernment Strategy 2023 for Austria was adopted on 7 June. The strategy was developed in a collaborative process with the relevant e-Government stakeholders at national and regional level and pursues the efficient implementation of electronic government services. It is based on the basic premise that all businesses and citizens must be able to perform all the procedures of public administration quickly and easily, electronically and without any specific technical expertise. To achieve this goal, the Federal e-Government Strategy promotes the involvement of and close cooperation between the federal state, cities and municipalities. The first concrete implementation priorities are to be the broad introduction of ID Austria, the interconnection of service portals and digital sovereignty.

Through a common vision and targeted initiatives Austria aims at improving service quality as a whole and making noticeable improvements in the related DESI indicators. The holistic approach focuses primarily on the public service dimension of the DESI but is intended also to have a positive impact on other DESI indicators.

Introduction

Belgium is expected to make a positive contribution to the collective efforts to achieve the EU’s Digital Decade targets. The country has improved its performance particularly in the digitalisation of public services, but is lagging on digital infrastructure, although progress has been made on the roll-out and overall 5G coverage. Belgium performs well when it comes to the digitalisation of businesses, and it is advancing well on the uptake of digital tools by businesses. The different digital strategies in the country, coordinated at federal level through the Digital Decade Working Group, are aligned with the Digital Decade Policy Programme.

Belgium is collaborating with other Member States in exploring the possibility to set up a European Digital Infrastructure Consortia (EDIC) on Genome, to enable effective and secure cross-border access to repositories of personal genomic datasets. Belgium is one of the Member States that have jointly submitted a formal application to set up the European Blockchain Partnership and the EDIC on European Blockchain Infrastructure, supporting EU-wide cross-border public services.

1 Digital skills

Belgium is scoring around the EU average as regards population with basic digital skills, and above the EU average as regards the share of ICT specialists. While many initiatives are currently being implemented, a significant change of pace would lead to productivity gains, to a more widespread use of technology across the economy and to a higher take-up of public services by citizens.

54% of people have at least basic digital skills, which coincides with the EU average. Moreover, Belgium scores at the EU average for citizens with above basic digital skills and at least basic digital content creation skills (67% compared to 66% at EU level).

Belgium is currently implementing several measures that are expected to help increase the level of basic digital skills. At federal level, the BeCentral digital campus has since 2017 trained more than 425 000 students with the objective of reducing the digital skills gap. Belgium continues to pursue work regarding the 2021 Digital Inclusion and female representation in the STEM and digital sector through its national and intersectoral strategy Women in Digital 2021-2026. The implementation of this strategy is supported by a dedicated website (BeDigitalTogether.be) and coordinated at the federal level via a multistakeholder working group (from public, private, academic, associative levels).

At regional level, the Flemish government has launched many projects to address the issue. The pilot programme ‘Everyone digital programme’ aims to have each local government come up with digital inclusion plans focusing on access, skills and support for citizens. Digibank aims to promote the social and economic integration of vulnerable groups by fostering their digital inclusion at municipal level. At the end of 2022, 54 out of 200 municipalities had implemented this programme. The Programme Digisprong, is teaching digital skills within the compulsory education stream. It focuses on increasing pupils' digital skills through four main points – safe ICT infrastructure, effective ICT school policy, digitally skilled teachers and trainers and provision of digital learning resources. The Digisprong strategy is accompanied by the Edusprong programme which focuses more on adult education and strengthening digital competences.

In Wallonia, the digital inclusion plan aims to respond to challenges related to giving equal access to Digital skills and reducing the digital divide. This will be achieved through numerous complementary programmes such as the Digital school programme, the Walloon "Basic Digital Training" Programme, the Digital Public Spaces scheme available throughout the region in over 150 locations, and support for workers' basic digital skills through the implementation of the "Upskills Wallonia" strategy. The various schemes and programmes to support the development of basic digital skills use the European DigComp reference framework as a reference tool.

In the Brussels Capital Region, programmes such as the digital ownership plan aim to support and help Brussels residents by specifically targeting vulnerable groups.

In addition, private sector initiatives provide additional support to increase the basic Digital skills level. Agoria, the federation of digital industries, continued with its BEthechange platform which maps the digital skills needed within the labour market. The mapping is then disseminated to all stakeholders. The Digiskills Belgium platform lists all initiatives and training courses to help people improve their digital skills, focusing on digital inclusion and the reskilling and upskilling of the labour force.

Belgium has an above average share of ICT specialists: 5.6% of total employment, above the EU average (4.6%). However, Belgium’s shortage of ICT professionals is still particularly pressing. Although there has been a moderate improvement, ICT graduates only account for 2.8% of graduates study ICT programmes, compared to 4.2% in Europe. More efforts are therefore needed to encourage students to become ICT specialists. On a positive note, 33% of enterprises provide ICT training to their employees, 11 percentage points above the EU average. With regards to female ICT specialists, Belgium currently has 18.7%, slightly below the EU average of 18.9%. In this regard, Belgium could take measures to address the existing gap regarding the number of women in ICT, including measures aimed to attract girls interest in ICT in general and to advanced technologies in particular.

Belgium is currently working on several programmes and initiatives to address these shortcomings. The Flemish region has a number of initiatives such as the Flemish AI academy. The academy in cooperation with Flemish universities will map the needs of businesses with regards to AI. In Wallonia, the Pix tool, evaluates the skills of users to identify the areas that may need improvement in users’ skillset.

In addition, the private sector recently launched a considerable number of activities to tackle the lack of ICT specialists, notably with up- and reskilling efforts by companies for their workforce. Agoria has worked on a number of projects namely, based on the above mentioned Bethechange plan, Agoria has kickstarted a project to digitally upskill seven manufacturing industries which have been identified as most important.

It is important to coordinate the development, implementation, and evaluation of digital education policy and strengthen the involvement of relevant stakeholders across the whole country, and continue addressing all cycles of education: primary, secondary, tertiary and mainstream digital in the educational system. Integrating digital (in addition to teaching ICT as a self-standing subject) horizontally across all subjects would ensure that school curricula are up to date with how digital technologies are used in everyday life and at the workplace.

It is also important that training programmes in Belgium on basic digital skills are expanded in scale to all demographics, including vulnerable groups (such as low-income individuals, older adults and people with disabilities). Belgium could ensure adequate, efficient, and effective reforms and investments in adult Digital skills, including by mobilising EU funds or by using the European Technical Support Instrument, to develop, deliver and evaluate programmes addressing specific adult learning needs.

2 Digital infrastructures

Belgium still lags far behind when it comes to fixed gigabit connectivity, with only 17% of coverage of fibre to the premises, while there is progress on VHCN (from 69% to 78%).

A number of joint ventures are currently active in the deployment of fibre. The joint venture of the incumbent operator is already active in the deployment of fibre, with another joint venture in the pipeline. These joint ventures are expected to help accelerate fibre rollout in Belgium. The launch of the fibreinfo.be website with the aim of providing information about fibre deployment and the update of the Landline Atlas with the inclusion of 1Gbps speeds should also help promote the take-up of gigabit networks. However, to date, only 3.1% of contracts in Belgium were at the speed of 1Gbps. Operators are also under increasing pressure to complete the roll-out of fibre networks.

As part of the national broadband plan, a call for projects was launched in December 2022 to promote fixed Internet access infrastructures in the "white areas" of the Belgian territory. With a budget of EUR 40.7 million, the call covers up to 50% of the cost of installing very high capacity networks (VHCN) in currently underserved areas. The regional government of Wallonia launched a similar project in the course of 2022 for a budget of EUR 12.2 million. The German speaking Community in Belgium has also entered into a private public partnership agreement with the incumbent operator and another player to cover 40 000 homes and businesses in the German-speaking community by 2026. The result of these initiatives should help Belgium to cover areas which would otherwise not be viable to cover under commercial logic.

When it comes to market developments, the merger of two incumbent operators was approved by the European Commission under the EU Merger Regulation in March 2023, which will commit the newly merged operator to providing access to another incumbent operator to its newly acquired fixed network and future fibre to the premises in Wallonia and Brussels for at least 10 years. This will effectively create three national operators which should help accelerate the roll-out of gigabit network.

Issues pertaining to access to infrastructure are also putting a dent in Belgium’s aspiration. In this regard, the creation of the Broadband Competence Office should help with reducing administrative costs and speed up the roll-out of gigabit networks. This is a step in the right direction towards the achievement of the Digital Decade goals. The Walloon region has progressed with its Gigaregion programme which invested EUR 51 million into among others the Last mile fixed connectivity action plan which should cover all 12 Walloon municipalities and nearly 28 000 households. The Flemish government has also invested through the ‘100 gigabit readiness plan 2019-2026 for Flemish Research Networks, with the aim of upgrading the backbone of the Flemish fibre network and make every Research Performing Organisation gigabit ready by 2026.

Despite progress on overall 5G coverage in 2022 (from 4% to 30% in one year) Belgium is still very far from the EU average (81%) and from the 2030 Digital Decade target. Moreover, coverage with the 3.4-3.8 GHz band is very low (6% vs 41% EU average). This is in large part due to the late finalisation of Belgium’s spectrum auction in July 2022 which auctioned the 700MHz and 3.6 GHz bands with 20-year usage rights starting in September of 2022 with the precise target of achieving 99.8% coverage of populated areas by 2030. The auction also resulted into the entry of a new market player which should also accelerate the coverage roll-out and the take-up of 5G by consumers. However, when it comes to the 26 GHz band, a public consultation concluded that there is currently no demand for the band, even though experimental licences are available. In this regard, it is worth noting that in Wallonia, the 26 GHz band is subject to scrutiny by the Walloon parliament relating to electromagnetic frequencies. In this regard, it is essential that Belgium regularly assesses emerging market demand for the remaining unassigned spectrum in the 26GHz band (to incentivise and facilitate deployment of 5G services for advanced applications) and assigns it when the demand emerges. At federal level, the Belgian government has launched a 5G pilot funding programme to support promising test cases. With a budget of over EUR 24 million, the programme has already attracted more than 20 proposals.

With regards to the production of semiconductors, Belgium has showed progress with various projects under way at different stages of their life cycle. On semiconductors, Belgium is the host country of IMEC, a research institute on semiconductors. The Flemish government, through its partnership with IMEC, is providing an investment of more than EUR 130 million through to 2026 to continue research into cutting-edge and sustainable semiconductor technology. Through the joint project IMECxpand, a EUR 200 million investment fund has been set up with a commitment to investing in new semiconductor related companies in Belgium. IMEC continues to be at the cutting-edge of semiconductor research and other digital technologies. The resulting partnership should strengthen the European semiconductor ecosystem in areas such as health tech, EdTech, smart public services, start-up development and more. All these deliverables contribute to the present Digital Decade targets. Belgium’s good starting position on semiconductor research are an important contribution to the EU’s efforts in semiconductors.

On high-performance computers, Belgium is a member of the EuroHPC LUMI pre-exascale supercomputer consortium with an investment of EUR 15.5 million. Belgium’s participation in this project has resulted in Flemish, Walloon and national organisations joining forces under the Digital Europe programme to set up the project Belgian-QCI, the first quantum key distribution network in Belgium. The partners in this network will make use of various interfaced QKD technologies in several different topologies.

On the Digital Decade target to have at least 10 000 climate-neutral highly secure edge nodes are deployed in the EU, distributed in a way that guarantees access to data services with low latency (i.e. a few milliseconds) wherever businesses are located, Belgium has started to work towards the achievement of such goals. The AdvanceRF programme funded by the Flemish government looks at the next generation wireless technology at the frequencies aimed at lower-power, high density, high throughput connections for next-gen devices leveraging III-V materials.

Belgium is also participating in a multi-country project together with France, Germany and Finland to invest through the RRF fund into a testing and implementation facility in Edge-AI in collaboration with IMEC. The Testing & Experimentation Facility for Edge-AI will allow the European ecosystem around AI Chips to find the right components and solutions, which in itself should ensure that the path to market is shortened for this technology. Belgium numerous activities are an important contribution to efforts in this area.

Overall, Belgium continues to progress towards the achievement of the digital decade targets on infrastructure. The progress achieved this year must be sustained, particularly with regards to deployment of a high quality 5G network. However, considerable acceleration is needed.

3 Digitalisation of businesses

Belgium performs very well when it comes to the digitalisation of business and is on a good path to contribute to achieving the EU targets.

On the target of having 90% of SME’s reach at least a basic level of digital intensity, Belgium performs quite well. In 2022, 77% of Belgian businesses already achieved a basic level of digital intensity, compared to the European average of 69%. This augurs that Belgium will make a relevant contribution to the target by 2030 if it continues with the current pace of its reforms.

Belgium performs above the EU average in terms of cloud, AI and big data uptake but still below the EU Digital Decade target of having 75% of Union enterprises taking up one or more of those technologies by 2030. Belgium needs to intensify its measures in order to accelerate take-up and ensure that the target is reached by 2030. Belgium starts from a strong base for both big data and cloud, with respectively 23% (2020) and 47% (2021) of enterprises adopting them, as opposed to 14% and 34% as an EU average. Actions in this regard will need to continue in order to be able to reach the target on one or more of those technologies.

Belgium is currently implementing several measures that can contribute to increase the digital transformation of business in line with the objectives of the Digital Decade. In the Flemish region, a data utility company is being launched, with the aid of RRF funding. The aim of this project is to make access to data more equitable for public and private operators within the connected ecosystems. By making such data flow between public and private organisations more fluent, secure and privacy friendly, the project should help with the uptake of digital solutions by businesses.

On artificial intelligence, Belgium is currently undertaking numerous initiatives. In Wallonia, the Digital Wallonia strategy is also focused on promoting artificial intelligence for businesses, while in the Brussels region, another RRF funded project is developing an AI institute to use technology within society and business. One of the pilot projects in this regard is the use of AI technology to match job seekers with suitable employers.

The Start AI initiative between the Flemish Industry Partnership and the Digital 4Wallonia programme, aims to help companies fulfil the potential of AI within their business context. Moreover, Flanders provides co-financing for 2 Testing & Experimentation Facilities for AI launched from the Digital Europe programme, around: Smart Cities & Communities and Agrifood.

These test facilities aim to test proof of concepts on AI in real environments so that they find their way to the market faster and can also be offered to companies in these thematic areas and thereby be incorporated.

On cloud computing, Belgium is one of the 12 Member States and more than hundreds of European companies taking part into the Important Project of Common European Interest on Next Generation Cloud Infrastructure and Services (IPCEI-CIS) which forms part of the Multi-Country Project on a Common Data Infrastructure and Services. The IPCEI-CIS aims at equipping the European Union with the next generation of advanced, distributed, secure, sustainable and innovative cloud-to-edge capabilities that citizens and businesses are in need for and will thus supports the cloud uptake among Belgium enterprises.

With regards to cybersecurity, the Belgian federal government has also launched a call for projects to strengthen the Cyber-Resilience of SMEs and the Self-Employed, with the aim of improving the cybersecurity of such businesses, in a way which complements the work already carried out by the regional authorities on the matter.

With regards to the target of having 90% of SME’s reaching at least a basic level of digital intensity, Belgium starts from a relatively good position of 77% and should maintain its momentum to reach the targets of 90% by 2030. Belgium is currently implementing several measures to achieve this target. At federal level, an online platform to help SME’s embrace e-commerce has been created with the expectation that over 1 million people will be targeted to encourage entrepreneurship. At regional level, Wallonia is targeting SME’s through its Digital Wallonia upskills programme, whereas the Flemish region has in place in the fields of digitalization several actions. Six European digital innovation hubs (EDIH), multi-country projects selected under the Digital Europe programme with a total budget of EUR 9.3 million, will support the digital transformation of SMEs and public service. EDIH can be an effective tool to improve the digital intensity of SMEs and the uptake of technologies such as big data, artificial intelligence and cloud services. They are one-stop shops that support companies – in particular SMEs – and public sector organisations in their digital transformation.

In addition, some private sector initiatives provide additional support to increase the uptake of digitalisation within business. The Industry Partnership, with the collaboration of the Flemish government to stimulate the growth and innovation of the Flemish industry for a period of four years. In this regards the focus is mainly on digital organisations, smart products and services, artificial intelligence and cybersecurity.

Regarding the target on doubling the number of unicorns, Belgium is also progressing at a very positively pace, especially for its size. Belgium currently has seven unicorns present in its territory which would make it rank 7th overall in Europe. 16 More importantly, Belgium currently has 15 companies which are valued between EUR 100 million and 1 billion which is an indication of a strong digital business ecosystem 17 . It is important mantaining efforts in this area.

Flanders has started numerous programmes such as Scaleup Vlaanderen with the aim to provide mentorship for start-ups. Wallonia and Flanders also are part of the European Digital Innovation Hubs. The Scaleup Vlaanderen program (A guidance program for digital scale-ups supported by the Flemish government and other partners) offers ten different kind of services that all focus on innovative digital (start-ups and) scale-ups, from a high profile acceleration program for scale-ups (‘Ignite’), over exclusive network events and international trade missions, to individual coaching trajectories focusing on internal scaling and internationalisation.

4 Digitalisation of public services

On the Digitalisation of public services, Belgium continues to improve and is making a solid contribution towards the achievement of the Digital Decade targets. 

With regards to the Digitalisation of public services and the target of having 100% online accessible provisions of key public services, Belgium continues to perform better than the European average. It reaches a score of 81 as regards digital public services for citizens (as compared to the EU average score of 77), and 88 as regards digital public services for businesses (EU average is 84). Concerning the indicator on digital public services for citizens, this is a marked improvement of 5 percentage points from the previous year score of 72. Belgium also performs very well when it comes to the number of users of e-government services with 88% of its citizens using such services compared to the EU average of 74%.

Belgium has put forward numerous initiatives both at federal and regional level to encourage the Digitalisation of public services and their uptake by citizens. Amongst them is The Federal Service Bus, which is a platform that is managed at federal level to ensure the secure exchange of electronic data between the rent service integrators in Belgium which allows for the once only principle to work in practice on the ground. At regional level, Flanders has pushed forward the project of Municipality without municipal hall which aims to transform the local authorities by digitalising their delivery and internal functions. This project is also included in the Belgian Recovery and Resiliency Plan. In Wallonia and its part of the Recovery plan, actions are being undertaken for the digitalisation of all public services and measures intended for businesses and citizens. On total, the Belgian Recovery plan has estimated EUR 586 million for the digitalisation of the public administration, including the digitalisation of the justice system and in particular of court proceedings.

On the target of having 100% of Union citizens have access to their electronic health records, Belgium has continued to roll out numerous initiatives throughout its various levels of government and stands at 84 as opposed to the EU average of 72.

The effectiveness of digital e-health scheme during the Covid-19 pandemic, boosted the public confidence in such schemes which has resulted in more progress and take up of such services. At federal level the e-Health action plan commits to create initiatives which share as much information as possible to make it available for consultation. This is mainly done through the e-health platform which puts data at the heart of healthcare policy. The federal government has also continued with the development of the mijngezondheid platform, which continues to evolve to give an active role to the citizen. Citizens can access all sorts of electronic health data such as: ePrescriptions and eDispensation, medical imaging reports and images, laboratory test results, hospital discharge reports, allergy information, diagnoses, devices and implant, procedures and relevant medicines. However, the data presented is not updated frequently following each care episode which hinders the value of such data to citizens.

At the regional level, Flanders has developed the Vitalink regulatory framework with the ambition of having safe and accessible information shared through the platform by 2025. In Wallonia, the Institute of Analytics for Health (INAH) project was launched with a pilot project aiming to enable the ethical and secure use of health information within the health system.

Belgium was also part of a CEF funded project that aims to help the development of patient summaries and electronic drug prescriptions. Flanders on the other hand, was also actively taking part in the Benelux cooperation for sharing health information.

Overall, Belgium would benefit from technical features that enable a frequent updating of online electronic health records with the newest health data following hours or a few days of each new care episode and encounter with health professionals. Belgium should improve the range of data that is accessible so to assure that access to electronic health records with timely updated minimum set of health-related data stored in public and private electronic health-record (EHR) systems is provided.

On secure online identification system, Belgium is also performing well with 70% of the population using one of the different solutions available. With the rollout of the Digital Minds declaration, the Federal government is aiming to have digital citizenship with access to all the online public services in Belgium. Belgium has three eID means notified. The Belgian Citizen eCard and the Foreigner eCard are notified at level of assurance ‘high’ under the Belgian eID Scheme FAS / eCards. The itsme® mobile App is notified at level of assurance ‘high’ under the Belgian eID Scheme FAS / Itsme®. Belgium is involved via public and private entities in three large-scale pilot projects, that will be funded under the Digital Europe Programme, with an overall grant request of over 1.1 million EUR. The effectiveness and impact of the considerable investments in digital public services stemming from the RRP could be increased by ensuring more complementarity in the accompanying measures that further strengthen the collaboration and alignment of the different administrative governments involved to further improve the interoperability, effectiveness and availability of online public services.

Introduction

Bulgaria has scope to improve its performance in the digital transition and to contribute to the collective efforts to achieve the EU’s Digital Decade targets. While Bulgaria continues to perform well in connectivity both on very high-capacity network (VHCN) and fibre to the premises (FTTP), the uneven distribution of digital infrastructure in rural areas requires further attention. Furthermore, the uptake of digital public services is still low and targeted measures are needed, in particular to minimise the administrative burden placed on companies. Significant efforts should be made in the promotion of digital skills.

Bulgaria is collaborating with other Member States in exploring the possibility to set up a European Digital Infrastructure Consortium (EDIC) on Genome, to enable effective and secure cross-border access to repositories of personal genomic datasets. 

1 Digital skills

Bulgaria is contributing only moderately to the Digital Decade target in digital skills. Only 31% of people have at least basic digital skills, which is below the EU average of 54% and the lowest in the EU which is a risk for the collective Member States’ achievement of the EU 2030 targets. The gap with the EU average is also very high when it comes to people with above basic digital skills (8% compared to 26% at EU level). A good indicator which can lead to a wider use of technology in the country, is the rise of ICT trainings offered by enterprises, which is starting to increase compared to previous years. The country also scores low in people with at least basic digital content creation skills (44% compared to 66% at EU level).

Bulgaria is currently implementing several measures that can contribute to increase the level of basic digital skills targeting professionals and the education system. For example, the grant scheme ‘Joint actions for social partners for the development of digital skills’ which helps various professionals acquiring digital skills still runs under the umbrella of Ministry of Labour and Social Policy. Another initiative to support gender equality and anti-discriminatory principles are established under the supervision of the National Strategy for the promotion of Equality of Women and Men. The educational programme ‘Education for tomorrow’, focused on ICT training, has been established for educators and students to strengthen their digital skills. The educational content is provided through an educational platform, free of charge. More than 800 teachers and 5 200 students have been trained in basic and advanced digital skills. Moreover, a new programme, ‘Rails Girls’ to support women in basic digital skills has been adopted in 2022. Another initiative is the ‘Hello Space’ festival hosted by many organisations for embracing youth in science, technology, engineering, arts and mathematics (STEAM). Until July 2022 the two annual editions of the festival attracted over 3 000 people and millions of online participants.

Bulgaria is working together with other Member States of the region to foster cross-border collaboration to enhance the EU 2030 targets in digital skills. In this context, there is the national funder project Generation Z: Building up disinformation resilience of the leaders of tomorrow, which uses AI to detect false information spreading on social media. The Women in STEM is an Erasmus+ project that Bulgaria is participating in. The project value is EUR 250 000 and the scope is to build and support more women in pursuing a career in STEM. Since November 2022, a new initiative supported by the European Investment Bank, AI&I Factory, has aimed to deepen the knowledge of AI to youth in everyday life and help in experimentation on creating innovative ideas and attract more females in the tech industry. The initiative targeted 50 young participants, aged 18 – 30, from five universities who attended a series of lectures and mentoring sessions guided by mentors from the tech industry.

The country has a low share of ICT specialists: the percentage of ICT specialists of total employment is 3.8%, remaining below the EU average (4.6%). In parallel, only 9% of enterprises provide ICT training to their employees, 13 percentage points below the EU average. However, 4.9% of graduates are in ICT programmes, which is above the EU average. Bulgaria performs best in the EU as regards the share of female ICT specialists at 28.9%, against an EU average of 18.9%. Bulgaria’s overall weak performance in ICT specialists available in the job market also has implications for the EU’s efforts to reach the DD target of 20 million ICT specialists 19 .

Bulgaria is currently working on several programmes and initiatives to address this shortcoming.

The Human Resources Development Programme introduced a measure providing specific ICT training in digital skills which is expected to contribute to the Digital Decade target for ICT specialists. The programme foresees 161 000 people to take part in trainings by 2029. The total budget of the measure is EUR 17.3 million. Another educational programme, KiTE Projects, focusing on young creators in STEM workshops, takes place every year with young participants from multiple Bulgarian cities. The Bulgarian National Platform for Digital Skills and Jobs provides open access to high-quality resources for national policies in digital skills and good practices in the area of training in digital skills.

ILIAD is a Horizon 2020 project in which Bulgaria participates and will equally support the development of advanced digital skills by sharing technical expertise between the project members. The project capitalises on the expertise and the advanced computing infrastructures available at the AI Laboratory in the Technical University of Varna. The initiative CloudEARTHi aims to build capacity for innovation across higher education institutions and businesses. The project has a total budget of EUR 1.2 million and it is co-funded by the European Institute of Innovation & Technology (EIT).

2 Digital infrastructures

Bulgaria performs well in terms of VHCN coverage reaching 86% and is above the EU average of 73%. In this respect Bulgaria can make an important contribution to the relevant Digital Decade target. Equally, the FTTP coverage is with 86% significantly above the EU average of 56%. Despite the impressive coverage, Bulgaria needs to make further efforts to boost take-up which remains low in particular for the at least 1Gbps broadband at 0.8% compared to the EU average of 13%.

In terms of 5G, Bulgaria scores below the EU average in overall 5G coverage (67% vs 81%). Mobile broadband take-up remains at 73% below the EU average of 87%. During the reporting period, the National Regulatory Authority issued provisional authorisations to three major mobile network operators (MNOs) for the remaining unassigned 5G bands, apart from the 3.6 GHz spectrum band which has been assigned since 2021. More specifically, in sub-GHz bands a 3x20 MHz has been assigned in the 700 MHz band and 3x20 MHz has been assigned in the 800 MHz band. Under the Recovery and Resilience Plan, Bulgarian public authorities have signed an agreement with the Air Force to conduct test trials in 2023 in the 700 MHz and 800 MHz bands to identify the impact of the transmissions on ground-based military radio navigation systems.

Moreover, in the 26 GHz band the NRA has issued four authorisations for granting a total spectrum of 1.6 GHz to three undertakings for 5G network deployment. Furthermore, in 2022 a procedure was carried out to assign additional spectrum in the 1800 MHz band and the NRA issued authorisation to three undertakings to use 2 x 20 MHz each and a total wireless spectrum allocation of 120 MHz.

For the first half of 2022 the take-up of mobile broadband in terms of number of subscribers has increased by 3%. However, most of the subscribers (65%) are subscribed mainly to 4G mobile services.

In terms of market developments, one of the MNOs active in Bulgaria, has completed an upgrade towards a fully autonomous 5G network. The new network will offer higher capacity, higher speeds and reduced latency. In October 2022, a 5G product test laboratory has been set up to shorten the production time and the overall time-to-market of optical cables and components for communication networks which are built in Sofia.

In 2022, the European Electronic Communications Code transposition has been finalised and Bulgaria notified it as complete. As part of this process, measures were taken to address universal access for people with disabilities and make it more affordable for people with low income. With regard to regulated access, the NRA has adopted a Decision in June 2022 for the definition, analysis and assessment of the wholesale market.

The telecom sector in Bulgaria has green policies which are reviewed and updated at an annual basis to stay aligned with the EU sustainability goals. To improve the environmental footprint and the energy consumption of electronic communication networks, Bulgaria promotes the deployment of fibre cables in public sector buildings to replace less energy efficient copper cables. All telecom operators are committed to decrease their carbon footprint and gradually switch to clean energy and renewable sources. For example, one operator announced plans to invest in solar and wind renewable energy. The park includes a 70 MW wind farm capable of producing 230 MWh per year and 40 MW photovoltaic park with expected production of 68 KWh per year. The renewable energy plant is expected to be fully operational in 2023. The NRA adopted rules to increase the security standards of networks and services. The new rules are aligned with measures from the 5G Cybersecurity Toolbox.

In 2022, the Ministry of Innovation and Growth (MIG) established a Working Group on Semiconductors (WGS) with representatives from the public administration, non-government associations and universities. The working group will consult and support MIG’s activities in making semiconductors a strategic asset for the industrial value chain in Bulgaria. Experts in the group will be able to share good practices and know-how towards the preparation and implementation of public policies in the field of microelectronics by facilitating pro-active exchange of information on the state of the ecosystem, raising awareness and optimising cooperation. With the help of stakeholders, MIG will be able to better map potential short and long term opportunities and risks in the field and thus, support the industry development in the country.

Bulgaria is an active EU player in the field of high-performance computing (HPC). In the Action Plan for the implementation of the National development programme BULGARIA 2030 for the period 2022 - 2024 as part of the EuroHPC Joint Undertaking (JU) in the period 2021 - 2026, Bulgaria is developing a world-class supercomputer named ’Discoverer’ that was inaugurated in October 2021 with funding from a joint investment of about EUR 11.5 million from the EuroHPC JU. The new supercomputer, hosted in the ‘Sofia Tech Park’, is capable of executing more than 6 petaflops peak performance. The main objective of the Discoverer is to stimulate industry and scientific research with modelling and optimisations in multiple scientific fields, such as pharmaceuticals, bioinformatics and climate. In addition, in the framework of EuroHPC JU, Bulgaria has also established a national HPC competence centre, coordinated by the Institute of Information and Communication Technologies at Bulgarian Academy of Sciences (IICT-BAS).

In 2021, Bulgaria has been a member of a project funded under the Digital Europe Programme (DEP) for the design of a national plan in quantum communications infrastructure (QCI) in the context of the EuroQCI. The project will deploy quantum key distribution systems to develop secure networks. Three Bulgarian ministries will participate in the QCI network deployed between the city of Sofia, Kulata and also a border city in Greece and the pilot project will foster training to public authorities, industry and research staff. Bulgaria’s national QCI plan is expected to boost technological developments in the field of quantum communications and cybersecurity. In quantum communication, Bulgaria is therefore expected to contribute to the Digital Decade goal of Europe being at the cutting edge of quantum technologies by 2030.

Bulgaria has also been active in the implementation of blockchain infrastructure in the public sector services and EU cross-border services. In 2023, Bulgaria will start pilot projects under the European Blockchain Services Infrastructure (EBSI).

3 Digitalisation of businesses

The level of digitalisation of businesses in Bulgaria is well below the EU average and far away from the Digital Decade target. 47% of SMEs have at least a basic level of digital intensity; 6% enterprises use big data versus 14% on average in the EU. The adoption of cloud and AI in enterprises amounts to one third of the EU average and therefore needs to be stepped up in order to contribute to the Digital Decade ambition.

Bulgaria has also introduced measures to underpin the Digital Decade target of more than 90% of Union’s SMEs reaching at least a basic level of digital intensity, such as the ’technological modernisation’ grant scheme under the RRP which is announced by the Ministry of Innovation and has a total financial allocation of EUR 132.7 million. The main objective of this measure is the digitalisation of the manufacturing process in view of expanding the production capacity and the diversification of products and services. More than 900 Bulgarian enterprises were already supported by the grant scheme with a total of BGN 246 million.

Another initiative of MIG which supports digital transformation of the business sector is the grant scheme ’Solutions in the field of information and communication technologies and cyber security in small and medium-sized enterprises’ which is another RRP measure with an aim to accelerate the transition to the digitalisation of the economy. The total budget of this RRP measure is EUR 15.6 million and over 1 500 SMEs are expected to be supported under the scheme. In a similar direction, the promotion of Industry 4.0 standards and the implementation of cybersecurity processes in SMEs is the specific objective of the Competitiveness and Innovation in Enterprises programme 2021 – 2027 which is funded under ERDF with a budget of EUR 194.2 million.

Moreover, the MIG has existing measures for digitalisation of SMEs and foreseen some new ones in 2023. For example, the establishment of the national network of European Digital Innovation Hubs (EDIHs) which provides funding to Bulgarian SMEs to foster digitalisation of their manufacturing processes and creating products and services based on digital technologies. Bulgaria has 4 EDIHs funded by Digital Europe under a co-financing mechanism of 50% to support national projects. Eight additional EDIHs have received the Seal of Excellence and are foreseen to be funded by ERDF programme ’Research, Innovation and Digitalization for smart transformation 2021-2027 (PRIDST)’, for example, the grant scheme ‘Development of innovations in enterprises’ with EUR 64.9 million and the grant scheme ‘Implementation of innovations in enterprises’ with EUR 150 million, respectively. Their objective is to facilitate growth of innovative SMEs and to boost the innovation and investment activity of Bulgarian businesses. Additional resources in this area are also envisaged to be provided under the form of financial instruments more specifically to provide access to venture capital investments in innovative enterprises.

Finally, Bulgaria has endorsed cross-border synergies towards facilitating digital transformation of businesses. Such a project is the ‘Ecologically Viable Business Innovation’ which is currently being implemented. The project has a budget of EUR 237 000 and entails the development of digital skills on eco-friendly business models and the digital transformation of businesses.

Bulgaria has introduced several measures, including regulatory measures, to contribute to the Digital Decade target of at least 75% of Union enterprises having taken up cloud computing services, big data or artificial intelligence. Bulgaria started developing several data spaces and data platforms. As an example of data spaces, in November 2022, the first Urban Data Space was officially launched. The space allows organisations to share and access data for developing new business products and improving urban services. Regarding data platforms, the iSofMap is an application providing services in the field of geodesy, cadastre, urban planning and geographic information system. It is a commercial company owned by the Sofia Municipality. In April 2022, the institute for Computing Artificial Intelligence and Technologies INSAIT was established in Sofia’s University and has created partnerships with other leading institutes worldwide. Bulgaria supports it with nearly EUR 100 million for a period of 10 years with a goal to create a leading technology institute in the country and stimulate innovation in the economy.

In March 2022, Bulgaria has managed to attract investments for the first unicorn company (Payhawk). Bulgaria has developed a dynamic start-up ecosystem with over 1 600 companies which offer 20% of the total start-up jobs market in south-east Europe. Overall, the developments have fostered links with the local market and the research community and show uptake of digital technologies and jobs growth.

4 Digitalisation of public services

There is significant room for improvement for Bulgaria on digital public services, also with regard to its contribution to the EU 2030 targets. The country scores 60 in the digital public services for citizens which is below the EU average (77), but is close to the EU average on digital public services for businesses (81 compared to 84 in the EU average). Only 32% of internet users are accessing e-Government services in Bulgaria, whereas the EU average is 74%. In transparency of service delivery and personal data, the country scores 51 out of 65 in the EU average demonstrating that further effort is necessary also in these aspects. Nevertheless, Bulgaria scores highly on the mobile friendliness score (95) which is already above the EU average (93). Moreover, the country is developing a mobile application Civi that tackles the communication and complaints from citizens to municipalities for urban issues that can further improve its performance.

There are several ongoing initiatives in Bulgaria to foster progress in the dimension of digital public services. For example, the Ministry of Justice in Bulgaria has provided electronic services for access of judicial decisions and has set up an electronic register for certain administrative procedures. The implementation is scheduled to be completed by end of 2023 and the total budget is BGN 431 661.

Moreover, the Ministry of Regional Development and Public Works is implementing a unified public register for spatial planning. The project is planned to be completed in Q3 2023, it has a total budget of BGN 3 million and it is co-financed at 85% from the European Social Fund (ESF).

Bulgaria focuses on data as a crucial capital of society with the strategy for a data-driven governance under the national framework of digital transformation of the public services in managing and operating the public data spaces. In this context, a single web-based platform (one-stop-shop) for data access within the national ecosystem is currently being developed. In this direction, a total of EUR 75 million under PRIDST will be targeted toward digital transformation of the public sector and development of data spaces in priority sectors of high public interest and importance.

Bulgaria has not yet notified the Eurotrust scheme, a pre-notification process was carried out, within which a peer review was carried out. An application for notification of the scheme has been submitted, and the procedure has not been completed.

At the moment, the Ministry of eGovernment’s (MEU) mobile application for electronic identification and electronic signature, BGID, is not implemented, and the process has been stopped with a view to making a decision.

Bulgaria has set cybersecurity as a priority axis and therefore aims to improve the national capacity and adapt the competent authorities to constantly track cybersecurity risks and threats. The establishment of a Secure Shared Information Space for E-Government (SSISG) is planned to ensure centralised intelligent management of information resources in public administrations. A specific project is currently under implementation until October 2023 to support municipal administrations with providing cybersecurity expertise. Bulgaria is participating in a Horizon 2020 project (Aviation, Naval and Power-grid environments - FORESIGHT) with a consortium partner, the national Computer Emergency Response Team (CERT-BG) for training and preparedness on cybersecurity attacks in aviation, naval and power-grid environments. The project has a duration of three years and a budget of EUR 7.3 million.

Bulgaria fosters the project for Development and Implementation of National Health Information System (NHIS) which will include e-health records, e-prescription and a set of other relevant services. The objective is for all people to have access to their personal e-health records through a single web portal and access will also be provided to authorised medical staff. Since September 2022, there is also an accompanying mobile application for accessing personal e-health records available in the NHIS. The mobile application provides also personalised notifications, such as for scheduled doctor appointments. Bulgaria performs above average on providing access to e-health records with a score of 77 compared to the EU average of 71. However, more effort is required to reach the EU 2030 target of 100.

In July 2022, Bulgaria adopted a national plan for the Open Governance Partnership Initiative and among the 14 commitments, five are directly linked to digital citizenship. One of the measures of the national plan refers to the implementation, until the end of 2024, of an effective public dialogue for the development of common standards in the use of artificial intelligence in the digitalisation process in order to ensure guarantees of equal access and respect for human rights.

Bulgaria has established an ICT Community Advisory which will explore interactions with all relevant stakeholders to collect feedback from industry organisations in all areas of digital transformation and support the ministries in policy making.

The State Agency for Child Protection has issued guidelines, together with other government agencies, on how children can be protected from online dangers and actively promotes the use of the national child help line number. Various dissemination events for child safety took place in 2022.

Introduction

Cyprus has untapped digital potential to contribute further to the collective efforts to achieve the EU’s Digital Decade targets. The country has taken a number of steps towards improving its digital performance and recently established the  Deputy Ministry of Research, Innovation and Digital Policy  (DMRID) with a central coordination role for the implementation of the Digital Strategy for Cyprus 2020-2025 , which is broadly aligned with the Digital Decade Policy Programme. Progress is not distributed evenly across the different aspects of the Digital Decade. Cyprus is progressing well in digital skills, but more efforts are needed on the digitalisation of the public sector in particular for citizens, and on connectivity.

Cyprus is collaborating with other Member States in exploring the possibility to set up a European Digital Infrastructure Consortium (EDIC) on establishing the European Cybersecurity Skills Academy.

1 Digital skills

In 2022, several initiatives to support digital skills development were ongoing under the umbrella of the National Digital Skills Action Plan 2021-2025 . Cyprus’ objective, with the support of the Recovery and Resilience Facility (RRF), is to improve digital skills development in all population groups, including upskilling and reskilling the workforce. Digital education and skills for all are one of the country’s main priorities. Cyprus recognises the importance of analysing business needs for digital skills, and academic programmes to match the needs of the economy.

In Cyprus only 50% of the population have at least basic digital skills, which is 4 percentage points below the EU average. However, the share of ICT specialists in employment increased significantly in 2022 to reach the EU average of 4.6%. Moreover, at 21.6%, the share of women among ICT specialists is higher than the EU average of 18.9%. Cyprus shows commitment to contributing to the collective effort to achieve the Digital Decade target on ICT specialists. However, some challenges remain such as the low percentage of ICT graduates and the insufficient match between the academic courses available and the need for ICT specialists on the labour market. ICT graduates account for 2.8% of graduates in Cyprus, compared to the EU average of 4.2%. Cyprus performs above the EU average on the share of enterprises providing ICT training, at 28% compared to the EU average of 22%.

Cyprus is currently implementing several measures that could help strengthen the digital fitness and capacity of people across the whole demographics, social and economic spectrum. The National Digital Skills Action Plan 2021-2025 contains a plethora of measures to help enhance the population's digital skills. The plan takes into consideration the Digital Decade targets for digital skills. It serves as an umbrella document, taking into account other sector-specific strategies like the lifelong learning strategy developed by the Ministry of Education and the National Cybersecurity strategy developed by the Digital Security Authority (DSA). The plan worth EUR 24 million covers all relevant training provided at national level, including training provided by: (i) the Cyprus Productivity Centr e (CPC) for the general public; (ii) the Deputy Ministry of Research, Innovation and Digital Policy (DMRID), and the  Cyprus Academy of Public Administration (CAPA) for public administrations; (iii) the Human Resources Development Authority (HRDA) for the private-sector workforce; and (iv) the Ministry of Education for the academy and other educational systems. Through the RRF, the government is planning to equip at least 700 schools with hardware and other materials for improving students’ digital skills and to create the e-classroom.

Cyprus Digital Skills and Jobs Coalition is an important leverage for upskilling and overall digital inclusion. In 2023, the government relaunched the National Coalition, which was put on hold in 2022. Numerous organisations from the public and private sector and the academia will participate in this initiative. Cyprus Digital Skills and Jobs Coalition platform , supported by the Connecting Europe Facility instrument, will serve as a hub for enhancing collaboration between all participating stakeholders and for sharing best practices and digital skills trainings. The platform will include a list of available training opportunities from all coalition members and a self-assessment tool to assess people’s digital skills. It will also provide suggestions on specific training materials based on participants’ digital skills levels.

In the public sector under the European Social Fund Plus (ESF+) funding instrument, CAPA is implementing a series of training programmes on digital skills, from basic to advanced level. A dedicated survey had identified the key digital skills needed. Based on this, more than 13 000 training needs were identified in 90 public organisations in fields ranging from cybersecurity to social media. In 2022, more than 3 000 civil servants participated in the training programmes which will be available to other public servants throughout 2023. The training on cybersecurity at a basic level will begin in 2023. The estimated number of participants is around 2 500 public servants.

Cyprus’s digital transition objective is to include everyone in this journey. The CPC is planning to scaleup trainings for people aged over 55 and other vulnerable groups (e.g., people in remote areas, people with disabilities). In 2022, Cyprus piloted 70 training programmes attended by more than 800 people. In 2023-2025, it plans to make over 450 training programmes available to everyone covering several areas (e.g., use of smart devices, use of e-government services, cybersecurity, digital marketing). The DMRID funds the development of the training courses in consultation with social partners.

The Human Resources Development Authority provides employed and unemployed people with training opportunities. From 2019 to 2022, the authority provided 675 training programmes to more than 5 500 employed people and 127 programmes for more than 300 unemployed people. The authority, in line with the RRP, will also provide training for reskilling and upskilling the population’s digital skills for 2023-2026. There are also dedicated training programmes and supporting mechanisms for unemployed people, students, and women who experience difficulties in finding a job.

The government systematically monitors and analyses long-term trends in the labour market and predicts the quantitative needs and the knowledge and skills required. In this vein, the HRDA developed a study to provide forecasts for both the demand and the supply of labour in the Cypriot economy for 2022-2032. Demand forecasts are provided for 52 sectors of economic activity and 309 occupations, while supply forecasts are provided for the economy as a whole, by gender and by education level. Furthermore, the DMRID has completed a dedicated survey among the members of the Cyprus Information Technology Enterprises Association (CITEA) on ICT roles & skills. The results will contribute to additional curricula for training programmes to be launched in 2023, under the RRP.

2 Digital infrastructures

In connectivity, Cyprus’s plans for a comprehensive roll-out of fixed and mobile networks, together with plans to promote fixed VHCN take-up have started to show first results. In the reporting period, impressive progress was made in both fields. The progress made in very high capacity network (VHCN) coverage in Cyprus over the last year is substantial, with a 19 percentage point increase to 60% coverage in 2022, reducing the gap to the EU average (73%) to only 13 percentage points. At the same time Cyprus is performing well on FTTP coverage, with 60%, higher than the EU average of 56%. The Cypriot authorities are making use of RRF funds to make further advancements in this area, which are especially necessary in rural areas, so as to achieve its national target for rural coverage as well as the Digital Decade target for gigabit coverage. It is planned that EUR 35 million will be drawn from the RRF to expand VHCN in underserved areas. This will take place once the groundworks has been laid with the launch of a geographical survey. Another preparatory measure will be to identify and address bottlenecks and barriers to the rapid deployment of VHCN. These reforms should be finalised by the second quarter of 2024, so that investment in expansion can build on the outcome of the reforms. The reform and subsequent investment should provide at least 44 000 premises in areas of no interest to private investors with VHCN fixed or mobile network coverage, provided in the case of fixed coverage, that the network is readily upgradable to gigabit.

Cyprus has also introduced plans to increase the take-up of VHCN. Following the pilot subsidy voucher scheme in 2019, the government has launched a new investment scheme to incentivise take-up of gigabit connectivity under the national RRP. While the number of households opting for a connection of at least 100 Mbps has increased from 26% in 2021 to 44% in 2022, the take-up of gigabit connections (0.9%) still lags behind the EU average of 13.8% in 2022. In December 2022, the Commission approved, under EU State aid rules, a EUR 12 million Cypriot voucher scheme. The new voucher scheme will offer households, without a subscription to a connection providing at least a 100 Mbps download speed, a voucher of EUR 120 to cover part of the set-up cost and the first 12 months of the monthly subscription for a connection with a download speed of at least 200 Mbps. The scheme is set to run from 2023 to 2025 and is expected to benefit around 82 000 households.

Contrary to its original 2021-2025 national broadband plan, the government has decided no longer to financially support the deployment of a submarine cable connection between Cyprus and Greece as the private sector is now planning to establish a connection between Cyprus and Greece, with a contribution from the Cypriot incumbent operator. That same operator started operating the ‘ARSINOE’ submarine cable system in March 2022, connecting Cyprus with France and Egypt.

Roll-out of 5G in Cyprus took place swiftly after the allocation of the relevant spectrum bands at the beginning of 2021. All four mobile operators were awarded a portion of the spectrum in the 700 MHz and 3.4-3.8 GHz bands. Two years after the allocation, Cyprus now has nationwide 5G coverage. This contributes not only to the Digital Decade target on 5G coverage, but also to the national target to cover the entire population living in organised communities and all transport paths with 5G. However, the 26 GHz band has not yet been allocated due to lack of market interest, according to a public consultation that took place in 2019. There has been no further public consultation since 2019, however.

In terms of resilience, Cyprus’ Digital Security Authority has issued specific secondary legislation for providers of electronic communications services and networks. This legislation sets increased security standards for these providers including additional provisions on general electronic communications. In addition, there is specific legislation fully covering implementation of the EU 5G Toolbox. The Digital Security Authority (DSA), together with the national regulatory authority, has also submitted a proposal for the MCP 5G-TACTIC focusing on 5G network cybersecurity and trust, bringing together the relevant authorities from three EU countries. The project approved for funding in the Digital Europe Programme will start soon. It aims to develop secure, open, dissaggregated and interoperable 5G solutions to support an open and competitive 5G European ecosystem. 5G-TACTIC technical activities include the development of a 5G Cybersecurity toolbox, extensive security analysis, evaluation, testing and relevant mitigation measures for the 5G solution. The planned activities also involve piloting, integration, and evaluation of multi-vendor open 5G solutions considering security aspects. In addition, the project will carry out training activities addressing technical and security audiences as well as European regulatory and cybersecurity authorities. Moreover, the DSA is participating in several other EU-funded projects, and as a result, Cyprus is steadily improving its cybersecurity capacity at the national level.

As regards advanced digital infrastructure, Cyprus’ contribution to the Digital Decade targets is currently limited in scope. It reported no activity in the field of edge node development during the reporting period. In cutting-edge semiconductors, Cyprus is among the Member States that have signed the joint declaration on the next-generation of processors and semiconductor technologies. However, the country’s contribution to the production value in semiconductors is limited. Cyprus expressed its availability and willingness to contribute to the EU's security of supply, resilience and technological leadership in semiconductor technologies and applications through the recently announced European Chips Act , and the work of the ‘Semiconductor Expert Group’ and of the forthcoming ‘Semiconductor Board’.

Cyprus is active in the field of quantum computing. In partnership with the Centre for Quantum Technology and Applications Deutsches Elektronen-Synchrotron ( DESY ), the Cyprus Institute  is coordinating the Quantum computing for Excellence in Science and Technology project funded by the EU. The project aims to provide training in the use of quantum computing for academics, research institutions and industry. The project was launched in January 2023 and will run for 5 years (total funding EUR 2.5 million). In addition, the Cyprus Quantum Communication Infrastructure (CYQCI) project aims to be the first on deployment of quantum communications in Cyprus, introducing the technology to the island and laying the foundations for the country’s active participation in the European Quantum Communication Infrastructure ( EuroQCI ). The project started in January 2023 and will run for 36 months (total budget of EUR 7.5 million).

Since 2019, the country has participated in the European High Performance C omputing (EuroHPC JU). It has appointed members to its Governing Board, and is co-funding the operation of the national HPC competence centre (NCC) with EUR 2 million for the two years from 2020 to 2022 under the EuroCC project. The NCC is coordinated by the Cyprus Institute’s Computation-based Science and Technology Research Centre ( CaSToRC ). The role of the NCC is to provide technical support and promote HPC for research and commercial use. The EuroCC project was successfully carried out by CaSToRC and the second phase (i.e. EuroCC2) will be implemented from 2023 to 2025, with budget of EUR 2 million (via 2021-2027 European Structural and Investment Funds). The focus of EuroCC2 is to provide technical support to the Cyprus computational community, with a strong focus on training and industry.

3 Digitalisation of businesses

In 2022, Cyprus put forward initiatives for increasing the uptake of emerging technologies in enterprises in line with the New Cyprus Industrial Strategy Policy and the objectives set up in the RRP. Subsidy schemes have been launched to support the SMEs’ digital transition and innovative start-ups. In addition, Cyprus aims to increase the adoption rate of digital production systems and applications and encourage the setting-up of smart factories and the use of cutting-edge and emerging technologies and digital services infrastructures, thus reinforcing the country’s transition to Industry 4.0.

On the Digitalisation of businesses, at 70% the share of SMEs in Cyprus with at least a basic level of digital intensity is above the EU average of 69%, making a positive contribution to the EU’s Digital Decade target of having 90% of SMEs in Europe with at least a basic level of digital intensity. 34% of enterprises in Cyprus take advantage of technology capabilities by sharing information electronically, below the EU average of 38%, while 42% use social media, above the EU average of 29%. At 20%, the share of SMEs selling online is slightly above the EU average of 19%. However, Cyprus is underperforming on e-commerce turnover, which accounts for just 7% of total corporate turnover (compared with an EU average of 11%). On the use of advanced digital technologies, the situation is mixed with 42% of enterprises using cloud services in 2021, 8 percentage points above the EU average of 34%. However, in 2020, only 6% of enterprises in Cyprus were using big-data analysis (below the EU average of 14%) and only 3% use AI (below the EU average of 8%).

In 2022, the Ministry of Energy, Commerce and Industry launched several funding programmes for facilitating businesses’ digital transition. One of these programmes is the ‘Digital Upgrade of Enterprises’ part of 2021-2027 THALIA programme, with a total budget of EUR 20 million. In November 2022, a first call for proposals was launched (budget EUR 10 million) aimed at encouraging investments in digital entrepreneurship and strengthening the integration of digital technologies by businesses. The second call was launched in March 2023 (with an additional RPP budget of EUR 10 million) and a third call is scheduled for the third quarter of 2024. In total, the funding programme will make EUR 30 million available. The first call resulted in awareness-raising activities, a landscaping of the digital roadmap, and activities to facilitate and promote SMEs’ investment in digital transformation. The programme is open to existing SMEs wanting to invest in digital upgrading (including e-commerce) and new SMEs planning to invest in e-commerce or on-line store or the application of advanced digital technologies.