According to Draghi and his report commissioned by the EU, a minimum annual investment of €750-800 billion in cutting-edge technologies will be necessary to close the gap with the other regions we already know: the US and China. If we do not take action soon, our continent will become irrelevant in terms of progress.
And what sets us apart from these large countries that are also undergoing digital transformation? Borders: cultural and linguistic borders and their social and economic differences in Member States, together with the heterogeneity of the regions. These borders could act as ‘invisible’ barriers to the spread of digitalisation and innovation, and indirectly serve as brakes on productivity improvement by preventing the real spread of digitalisation from the most advanced regions to the least advanced, thus creating a ‘productivity paradox’ phenomenon. And although we try to create regulations and laws with strong values such as ‘no one left behind’, it could happen, contrary to expectations, that the differences between the richest (highly urbanised areas with technology-intensive sectors) and the poorest are reinforced. In other words, we would be creating a harmful dynamic known as the ‘Matthew Effect’, where, thanks to technology such as AI and the possibilities it unlocks, the richest will be able to become a little richer, while the least competitive will gradually fall behind.
In this context and as part of my doctoral thesis, thanks to the UPM, Cátedras Telefónica and Fundetel, we have published an article in Telecommunications Policy, one of the most distinguished and emblematic journals in the sector, which sheds light on the following questions:
To what extent are digitisation processes homogeneous between adjacent regions in the EU? What role do the competitiveness of our countries and their regions play in these processes of spatial contagion?
To this end, we have considered the 240 European regions and data from Eurostat that measure digitisation in a broad sense, and we have used an indicator called the RCI (Regional Competitiveness Index) published by the EU, which measures the regional competitiveness of our regions. We have also used analytical tools to identify which of these variables have undergone the greatest contagion between neighbouring geographical regions in recent years and finally we have applied a ‘clustering’ to all regions, constructing a kind of regional matrix between digitalisation and competitiveness.
And these are some of the noteworthy aspects
In the European Union, digitalisation and competitiveness tend to be defined by country, with capital regions usually leading the way in both areas.
For a region to be highly competitive, it generally needs a high level of digitalisation, although some European industrial areas are the exception (Hamburg and Lombardy).
The effects of digitalisation tend to remain within national borders, limiting the influence between countries despite the European Union’s current digital policies.
The most advanced regions (e.g. a contiguous area covering the Netherlands, much of Denmark and Belgium, as well as the capital regions of Sweden and Finland) do function as true centres driving development and convergence with their neighbouring regions, but there are major differences between other regions and geographical areas where this process does not take place, even within the same country (this can be seen, for example, in the Iberian Peninsula or in a large geographical area of Eastern Europe where contagion hardly works).
The main conclusion, therefore, is that there is a significant national effect on both digitisation and competitiveness processes in the EU, and the expected process of regional contagion should be urgently accelerated through the Digital Single Market, which seeks to ‘break down borders’ and harmonise national regulations, thereby eliminating the divergent trajectories and heterogeneities of European regions as a whole. A second conclusion is that simply investing in advanced technologies will not be enough; mechanisms for knowledge exchange and transfer across different technology industries and different European regions are also needed.
