Recent reports show a substantial digitalization gap within businesses and public institutions in the DACH region. Through strategic investment in digital infrastructure and literacy, the region has the potential to enhance its services, drive innovation, and sustain global competitiveness.
Recent reports indicate a growing digital divide among public and private institutions in the DACH region.
According to one report, 41% of enterprises in Austria have a very low level of digital intensity, meaning they use a maximum of three digital technologies. A recent documentary also highlighted shortcomings in Germany's digital adoption in the public sector, most notably a slow expansion of high-speed internet into rural areas and a continued reliance on paper-based processes in key government institutions.
A recent survey of over 400 industrial companies in the DACH region revealed that half of the companies are increasing their digitalization activities, but remain overwhelmed by the pace of change. Despite recognizing the importance of digitalization, only about half of the companies report noticeable positive effects from their digital initiatives.
These statistics hint at an opportunity for more effective digitalization in the DACH region, which could further boost the region’s competitiveness in the global market.
Missed opportunities in the DACH Region
Low levels of digital adoption are typically associated with missed opportunities for efficiency and innovation, according to Monika Česnauskaitė, Key Account Manager at Reiz Tech. “Businesses with advanced digital capabilities can develop and deploy new products and services more rapidly, adapt to changing market conditions, and create competitive advantages. Companies that do not fully embrace digitalization risk falling behind.”
When it comes to efficient delivery of government services, another key area ripe for digital transformation in the DACH region, Česnauskaitė highlights. “Higher levels of digitalization enable governments to deliver public services more effectively, by reducing administrative burdens, improving access to services, and enhancing citizen engagement.”
The problems often stem from the digital solution adoption rates, or the fear of them, which is often perpetuated if chosen solutions prove to have redundant solutions, lack progressive molarity, or simply lack good UX/UI. Choosing the right solutions, such as custom built applications through Microsoft's PowerApps could expedite service processes and improve outcomes, Česnauskaitė suggests, especially in places where that still rely on paper forms.
Bridging digital divide with infrastructure and education
To ensure that organizations and individuals thrive in a digital environment, Česnauskaitė suggests strategic focus on infrastructure and education. “Governments and private sector stakeholders should invest in expanding and upgrading digital infrastructure, including broadband networks and mobile connectivity, to support growing digital demands.”
Česnauskaitė adds that comprehensive digital literacy programs are essential to equip individuals to use new digital technologies effectively. “Education and training focused on digital literacy, coding, cybersecurity, data literacy, and digital communication skills are at the foundation of a thriving digital economy. Special attention should be given to marginalized communities and vulnerable populations to ensure equitable access to digital skills development opportunities.”
Another key foundation is small and medium-sized enterprises (SMEs). But, Finally, Česnauskaitė points out, there is often a resource gap that hinders SMEs’ digital transformation efforts. “To support SME digitalization, governments can provide financial incentives, grants, and technical assistance programs to help businesses invest in digital infrastructure, software, and training.”
Overall, a blend of foundational infrastructure and skills enhancement, coupled with strong support for business innovation, can enable the DACH region to overcome the current digitalization hurdles and secure its position in the digital economy.