EU Commission released the results of the 2020 Digital Economy and Society Index (DESI), which monitors Europe’s overall digital performance and tracks the progress of EU countries with respect to their digital competitiveness. This year’s DESI shows that there is progress in all Member States and all key areas measured in the index. This becomes all the more important in the context of the coronavirus pandemic, which has demonstrated how essential digital technologies have become, by allowing work to continue, monitoring the spread of the virus, or accelerating the search for cures and vaccines. Furthermore, the DESI indicators relevant for the recovery show that EU Member States should step up their efforts to improve the coverage of Very High Capacity Networks, assign 5G spectrum to enable the commercial launch of 5G services, improve citizens’ digital skills and further digitise businesses and the public sector.
Executive Vice-President, Margrethe Vestager, said: “The coronavirus crisis has demonstrated how crucial it is for citizens and businesses to be connected and to be able to interact with each other online. We will continue to work with Member States to identify areas where more investment is needed so that all Europeans can benefit from digital services and innovations.”
Commissioner for Internal Market, Thierry Breton, added: “The data we publish today shows that industry is using digital solutions now more than ever. We need to ensure this is also the case for small and medium businesses and that the most advanced digital technologies are deployed throughout the economy.”
In the context of the recovery plan for Europe, adopted on 27 May 2020, DESI will inform country-specific analysis to support the digital recommendations of the European Semester. This will assist Member States to target and prioritise their reform and investment needs, thereby facilitating access to the Recovery and Resilience Facility worth €560 billion. The Facility will provide Member States with the funds to make their economies more resilient and ensure that investments and reforms will support the green and digital transitions.
Main findings of the 2020 DESI
Finland, Sweden, Denmark and the Netherlands are the leaders in overall digital performance in the EU. Malta, Ireland and Estonia are following right after. The International Digital Economy and Society Index (I-DESI) shows that the best performing EU countries are also worldwide leaders. The largest EU economies are not digital frontrunners, which indicates that the speed of digital transformation must accelerate for the EU to successfully deliver on the twin digital and green transformations. Over the last 5 years, Ireland has made the most significant progress, followed by the Netherlands, Malta and Spain. These countries also perform well above the EU average as measured by the DESI score.
As the pandemic has had a significant impact on each of the five dimensions tracked by DESI, the 2020 findings should be read in conjunction with the numerous measures taken by the Commission and Member States to manage the crisis and support the recovery. Member States took action to minimise contagion and to support healthcare systems, such as by introducing applications and platforms to facilitate telemedicine and coordinate healthcare resources. The Commission also took action, such as issuing a Recommendation on a common Union toolbox for the use of technology and data to combat and enable the exit from the crisis, in particular on mobile applications and the use of anonymised data in tracing apps. The Body of European Regulators of Electronic Communications (BEREC), upon request of the Commission, started to monitor internet traffic to avoid congestion.
Main findings in 5 digital areas
The Digital Economy and Society Index tracks the progress made in Member States in 5 principal policy areas, namely connectivity, digital skills, internet usage by individuals, integration of digital technologies by businesses and digital public services.
Connectivity has improved but more needs to be done to address fast-growing needs. Member States are working on the transposition of new EU rules adopted in 2018 into national legislation, with a view to fostering investment in Very High Capacity Networks, both fixed and mobile. 78% of households had a fixed broadband subscription in 2019, up from 70% 5 years ago, and 4G networks cover almost the entire European population. But only 17 Member States have already assigned spectrum in the 5G pioneer bands, (5 countries more than last year). Finland, Germany, Hungary and Italy are the most advanced on 5G readiness. Fixed Very High Capacity broadband networks are available to 44% of EU homes.
More progress in digital skills is needed, especially since the coronavirus crisis has shown that adequate digital skills are crucial for citizens to be able to access information and services. A large part of the EU population, 42%, still lacks at least basic digital skills. In 2018, some 9.1 million people worked as ICT specialists across the EU, 1.6 million more than 4 years ago. 64% of large enterprises and 56% of SMEs that recruited ICT specialists during 2018 reported that vacancies for ICT specialists were hard to fill.
Although the pandemic has seen a sharp increase in internet use, the trend was already present before the crisis, with 85% of people using the internetat least once a week(up from 75% in 2014). The use of video calls has grown the most, from 49% of internet users in 2018 to 60% in 2019. Internet banking and shopping are also more popular than in the past, being used by 66% and 71% of internet users respectively.
Enterprises are becoming more and more digitised, with large companies taking the lead. 38.5% of large companies already rely on advanced cloud services and 32.7% reported that they use big data analytics. However, the vast majority of SMEs do not yet use these digital technologies, as only 17% of them use cloud services and only 12% big data analytics. As for e-commerce, only 17.5% of SMEs sold products or services online in 2019, following a very slight increase of 1.4 percentage points compared to 2016. In contrast, 39% of large enterprises made use of online sales in 2019.
In order to boost e-commerce, the EU has agreed on a series of measures ranging from ending unjustified cross-border barriers and facilitating cheaper cross-border parcel deliveries to ensuring protection of online customer rights and promoting cross-border access to online content. Since December 2018, consumers and companies are entitled to find the best online deals throughout the EU without experiencing discrimination based on their nationality or place of residence.
Finally, there is an increasing trend towards the use of digital public services in the areas of eGovernment and eHealth, which allows for more efficiency and savings for governments and businesses, improved transparency, and the greater participation of citizens in political life. 67% of internet users who submitted forms to their public administration in 2019 now use online channels, up from 57% in 2014, showing the convenience of using ICT-enabled services over paper-based ones. The top performers in this area are Estonia, Spain, Denmark, Finland and Latvia.
The annual Digital Economy and Society Index measures the progress of EU Member States in their steps towards a digital economy and society, on the basis of Eurostat data as well as specialised studies and collection methods. The DESI 2020 reports are based on 2019 data. To improve the methodology of the index and take account of the latest technological developments, a number of changes were made to the 2020 edition, which now includes fixed very high capacity network (VHCN) coverage. The DESI was re-calculated for all countries for previous years to reflect the changes in the choice of indicators and corrections made to the underlying data. Country scores and rankings may thus have changed compared with previous publications. As the figures refer to 2019, the United Kingdom is included in the 2020 DESI and in calculated EU averages.
Fewer women than men will regain work during COVID-19 recovery
Fewer women will regain jobs lost to the COVID-19 pandemic during the recovery period, than men, according to a new study released on Monday by the UN’s labour agency.
In Building Forward Fairer: Women’s rights to work and at work at the core of the COVID-19 recovery, the International Labour Organization (ILO) highlights that between 2019 and 2020, women’s employment declined by 4.2 per cent globally, representing 54 million jobs, while men suffered a three per cent decline, or 60 million jobs.
This means that there will be 13 million fewer women in employment this year compared to 2019, but the number of men in work will likely recover to levels seen two years ago.
This means that only 43 per cent of the world’s working-age women will be employed in 2021, compared to 69 per cent of their male counterparts.
The ILO paper suggests that women have seen disproportionate job and income losses because they are over-represented in the sectors hit hardest by lockdowns, such as accommodation, food services and manufacturing.
Not all regions have been affected in the same way. For example, the study revealed that women’s employment was hit hardest in the Americas, falling by more than nine per cent.
This was followed by the Arab States at just over four per cent, then Asia-Pacific at 3.8 per cent, Europe at 2.5 per cent and Central Asia at 1.9 per cent.
In Africa, men’s employment dropped by just 0.1 per cent between 2019 and 2020, while women’s employment decreased by 1.9 per cent.
Throughout the pandemic, women faired considerably better in countries that took measures to prevent them from losing their jobs and allowed them to get back into the workforce as early as possible.
In Chile and Colombia, for example, wage subsidies were applied to new hires, with higher subsidy rates for women.
And Colombia and Senegal were among those nations which created or strengthened support for women entrepreneurs.
Meanwhile, in Mexico and Kenya quotas were established to guarantee that women benefited from public employment programmes.
To address these imbalances, gender-responsive strategies must be at the core of recovery efforts, says the agency.
It is essential to invest in the care economy because the health, social work and education sectors are important job generators, especially for women, according to ILO.
Moreover, care leave policies and flexible working arrangements can also encourage a more even division of work at home between women and men.
The current gender gap can also be tackled by working towards universal access to comprehensive, adequate and sustainable social protection.
Promoting equal pay for work of equal value is also a potentially decisive and important step.
Domestic violence and work-related gender-based violence and harassment has worsened during the pandemic – further undermining women’s ability to be in the workforce – and the report highlights the need to eliminate the scourge immediately.
Promoting women’s participation in decision-making bodies, and more effective social dialogue, would also make a major difference, said ILO.
Global electricity demand is growing faster than renewables
Renewables are expanding quickly but not enough to satisfy a strong rebound in global electricity demand this year, resulting in a sharp rise in the use of coal power that risks pushing carbon dioxide emissions from the electricity sector to record levels next year, says a new report from the International Energy Agency.
After falling by about 1% in 2020 due to the impacts of the Covid-19 pandemic, global electricity demand is set to grow by close to 5% in 2021 and 4% in 2022 – driven by the global economic recovery – according to the latest edition of the IEA’s semi-annual Electricity Market Report released today. The majority of the increase in electricity demand is expected to come from the Asia Pacific region, primarily China and India.
Based on current policy settings and economic trends, electricity generation from renewables – including hydropower, wind and solar PV – is on track to grow strongly around the world over the next two years – by 8% in 2021 and by more than 6% in 2022. But even with this strong growth, renewables will only be able to meet around half the projected increase in global electricity demand over those two years, according to the new IEA report.
Fossil fuel-based electricity generation is set to cover 45% of additional demand in 2021 and 40% in 2022, with nuclear power accounting for the rest. As a result, carbon emissions from the electricity sector – which fell in both 2019 and 2020 – are forecast to increase by 3.5% in 2021 and by 2.5% in 2022, which would take them to an all-time high.
Renewable growth has exceeded demand growth in only two years: 2019 and 2020. But in those cases, it was largely due to exceptionally slow or declining demand, suggesting that renewables outpacing the rest of the electricity sector is not yet the new normal.
“Renewable power is growing impressively in many parts of the world, but it still isn’t where it needs to be to put us on a path to reaching net-zero emissions by mid-century,” said Keisuke Sadamori, the IEA Director of Energy Markets and Security. “As economies rebound, we’ve seen a surge in electricity generation from fossil fuels. To shift to a sustainable trajectory, we need to massively step up investment in clean energy technologies – especially renewables and energy efficiency.”
In the pathway set out in IEA’s recent Roadmap to Net Zero by 2050, nearly three-quarters of global emissions reductions between 2020 and 2025 take place in the electricity sector. To achieve this decline, the pathway calls for coal-fired electricity generation to fall by more than 6% a year.
However, coal-fired electricity generation is set to increase by almost 5% this year and by a further 3% in 2022, potentially reaching an all-time high, according to the Electricity Market Report. Gas-fired generation, which declined 2% in 2020, is expected to increase by 1% in 2021 and by nearly 2% in 2022. The growth of gas lags that of coal because it plays a smaller role in the fast-growing economies in the Asia Pacific region and it faces competition from renewables in Europe and North America.
Since the IEA’s last Electricity Market Report in December 2020, extreme cold, heat and drought have caused serious strains and disruptions to electricity systems across the globe – in countries ranging from the United States and Mexico to China and Iraq. In response, the IEA is establishing an Electricity Security Event Scale to track and classify major power outages, based on the duration of the disruption and the number of affected customers. The Texas power crisis in February, where millions of customers were without power for up to four days because of icy weather, was assigned the most severe rating on this scale.
COVID-19 Crisis Lowers Thailand’s Growth, Continued Support for the Poor Needed
Thailand’s economy continues to take a heavy toll due to the COVID-19 pandemic and is projected to expand modestly at 2.2 percent in 2021, revised down from the 3.4 percent growth projected in March, according to the World Bank’s latest Thailand Economic Monitor “The Road to Recovery” published today. Continued assistance to the poor and vulnerable, including informal workers, will be necessary as COVID-19 continues to impact Thailand’s economy.
The weaker outlook reflects the impact of the ongoing third wave of the virus on private consumption, and the likelihood that international tourist arrivals will remain very low through the end of 2021. Thailand recorded 40 million tourist arrivals in 2019, but the expected number of tourist arrivals in 2021 has been revised sharply downward from a previous forecast of 4-5 million to just 0.6 million.
“The economic shock associated with COVID-19 has adversely affected employment, incomes, and poverty, but the government’s comprehensive social protection response has been impressive in mitigating its impact,” said Birgit Hansl, World Bank Country Manager for Thailand. “Thailand’s fiscal space is still sufficient to allow supporting measures to protect the poor and most in need in the months to come.”
Thailand has performed relatively well in terms of the scale and speed of its fiscal response. The government expanded what was previously a relatively modest set of cash transfer programs to implement one of the largest such responses to COVID-19 in the world. Preliminary simulations suggest that more than 780,000 additional people could have fallen into poverty in 2020 if the government had not scaled up social assistance.
“The crisis in 2020 demonstrated Thailand’s ability to leverage its robust and universal digital ID, sophisticated and interoperable digital platform, and a number of administrative databases to filter eligibility for new cash transfer programs. Going forward Thailand would need to consolidate these efforts and be better prepared to respond to crisis through setting up a social registry.” said Francesca Lamanna, Senior Economist at the World Bank.
Economic activity is not expected to return to its pre-pandemic levels until 2022, with the GDP growth rate projected to rise to 5.1 percent. However, the pace of recovery will depend on Thailand’s vaccination progress, the effectiveness of fiscal support, and the extent to which international tourism resumes. Exports of goods are expected to support the Thai economy in 2021, due to recovering global demand for automotive parts, electronics, machinery, and agricultural products. Risks are further tilted to the downside as the COVID-19 recovery might be delayed due to new COVID-19 variants becoming resistant to treatments or vaccines.
“Adequate testing-tracing-isolation and further progress on vaccinations will be necessary to avoid the need for lockdowns, spur a sustained increase in domestic mobility and consumption, and allow the country to reopen to foreign tourists,” according to Kiatipong Ariyapruchya, World Bank Senior Economist for Thailand. “In the long-term, reforms that lower trade costs and barriers could help maximize the benefits of the ongoing recovery of global economic activity.”
The report also recommends that the government will need to invest in strengthening Thailand’s social protection system. In the years to come it should be a priority to provide adequate support to vulnerable people, while ensuring that this support is targeted effectively to limit the overall fiscal burden. The crisis also further underscores the need to ensure that the social protection system covers the large informal sector at all times, not only during crises.
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