The European Union is closing the digitalisation gap with the United States. More
than half of European firms responded to the pandemic by investing in digitalisation,
and they are rapidly catching up with their US peers in implementing advanced digital
technologies. Despite this, Europe is not well positioned in digital innovation, and is at
risk of developing dependencies in several critical technologies.
Digitalisation drives firms’ resilience to economic disruption and climate change, and
it has helped European firms adjust at a time of repeated shocks. Digital companies
displayed more resilience to the economic and trade disruptions unleashed by the
COVID-19 crisis and the war in Ukraine, suggesting that they found more efficient ways
of working. Digital firms generally perform better than non-digital firms, tending to be
more productive. They are also more likely to engage in international trade and invest
in addressing the physical and transition risks of climate change.