Nearly 50 per cent of firms in the European Union (EU) have invested in digitalisation as a response to Covid-19, a new report from the European Investment Bank (EIB) has found.

The research revealed that digital companies fared better than non-digital organisations during the pandemic.

According to the study, digital businesses were less likely to experience a strong decrease in sales from the beginning of 2020, and used the crisis more often as an opportunity to accelerate digitalisation.

On average they were “more productive, innovative, grew faster and paid higher wages”.

But the EIB warns that with digitalisation advancing, the digital divide in Europe is also increasing.

It said that smaller firms and firms located in regions where digital infrastructure is lacking are “at risk of being left behind”.

“During the pandemic, digital transformation often became essential for firms’ survival and sped up the transformation of European economy,” said EIB vice-president Ricardo Mourinho Félix. “Yet we are also observing that the crisis forced many firms to put more complex digitalisation processes on hold.

“As we are entering a “new normal,” it will be crucial to restart these processes and accelerate the pace of advanced digital transformation in the European Union. The EIB Group stands ready to provide the necessary support.”

EIB chief economist Debora Revoltella said: “Most EU companies tell us they used the pandemic as an opportunity to transform and start their digitalisation process. But over the period, the divide among firms increased, with less responsive ones facing the risk of falling behind. A lack of skills remains the main barrier to firms’ investment. In response, we need multifaceted policies to support digitalisation: technical assistance, skills and access to finance all play a role.”

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