75 Digitisation Index...76 GDP per capita...77 Benchmarking analysis...78 4 Foreword Digital technologies are one of the most important sources of growth for national economies.
The digital economy isn't just about speeding up communication across borders or changing the skills workers need;
Three core forces and their combinations are the source of many technology trends: mobility, social and analytics.
Both cloud computing and industrial technologies are considered enabling technologies, supporting the technology trends in the three core forces.
Besides their ability to support these other forces, they can also have a disruptive and innovative influence.
It allows commuters to shop for groceries by pointing their mobile devices at billboards in subway stations and at bus stops.
which digitisation takes place differs across industries and businesses. When investigating the different industry segments in more detail,
LEGO CUUSOO LEGO CUUSOO, a crowdsourcing platform launched in 2008 by the Danish toy maker LEGO Group and CUUSOO,
a company with over 10 years of crowdsourcing and open innovation experience, allows members of the public to post their ideas for potential LEGO products.
To be selected, ideas must receive at least 10,000 votes on the crowdsourcing site. Once the project has received its 10,000 supporters,
http://lego. cuusoo. com/Though affecting every industry and business function, the impact and pace at which digitisation takes place differs across industries and businesses 11 different industry classifications,
Digitisation is changing the way companies innovate and develop products and services. The impact of digitisation on marketing, sales and services is more obvious than on other business functions,
though impact on other business functions cannot be neglected. Nevertheless it can be said that a huge digital potential is far from fully exploited.
Its mission control centre for social media demonstrates the potential of social business, putting social media literally at the centre of the way the company approaches marketing.
Gatorade created the Gatorade Mission Control Centre-a room that sits in the middle of the marketing department of its headquarters in Chicago
The room features six monitors to track a number of data visualizations and dashboards. Tweets Facebook activities and blog postings that mention the brand, its endorsers, competitors and broader sports nutrition topics are tracked in real time,
facilitating Gatorade reaching out more proactively to influencers and customers. Initial results are impressive, with claims of a 250%increase in engagement and 65%reduction in early (web page exits.
It is likely that these social activities contributed to the 10%growth in volume of Gatorade's US sales in the second quarter of 2010, after three consecutive years of slumped sales.
Using Consumer Segmentation and Social media to Drive Market Growth The impact of digitisation on marketing,
Mckinsey states that more than 75%of the value add created by the internet can be found in traditional industries4.
As the process of digitisation evolves and matures, it is critical to monitor and anticipate the evolution of the business landscape.
The future of doing business in the digital age will mainly depend on the pace of digital development and adoption as well as the outlook for the European business climate.
This outlook will be influenced highly by the choices individuals and businesses make about using digital technologies
and promote the connection between traditional industries and the digital economy. 4 Mckinsey & Company (2012).
Internet Matters. Essays in Digital Transformation 14 Objectives Practically, five objectives have been set which need to be reached.
big data, mobile and cloud solutions) to improve business operations, invent new business models, sharpen business intelligence, and engage with customers and stakeholders.
They create the jobs and growth opportunities of the future. 15 Figure 4 Objectives The analysis in this paper is oriented around the above five pillars.
Pillar 1 Increase industry digital transformation In order to increase the take-up of digital technologies and intensify the digitisation process in Europe's economy
digitisation is a trend with many facets, impacting industries and businesses differently.‘‘Financial services & insurance',‘computers & electronics'and‘media & telecommunications'are leading the race to maximise the enabling and disruptive potential of digital technologies,
whilst down at the bottom, industries such as‘hotels & restaurants'and‘construction'seem to have a lower affinity for digital technology.
Digitisation is significant but it doesn't affect every industry and business function in the same way. 17 Figure 5 Digitisation Index6 (2011) Source:
Booz & Company (2011. Measuring Industry Digitisation-Leaders and Laggards in the Digital economy Not only is there a substantial gap between the leading and less digitised sectors in terms of digitisation, the pace at
which digitisation takes place across industries differs As well as illustrated in Figure 6, the difference between leading industry‘financial services & insurance'and laggard‘hotel & restaurants'measured 35%in 2010.
Only one year later, the gap between the industries had risen to almost 40%.6 The Industry Digitisation Index is derived from by Eurostat's 2011 15 information society benchmarking framework.
In creating the index Booz & Company has divided the data into four separate factors, each
of which is defined by several sub-factors and components: digital input, digital processing, digital output and infrastructure.
& Logistics Business & Administrative Services Utilities Basic Manufacturing Chemicals Trade & Retail Equipment & Machinery Automotive Media & Telecommunications Computers & Electronics Financial services & Insurance Leading
Midfield Lagging There is a substantial and growing gap in terms of digital uptake across industries 18 Figure 6 Industry digitisation index change 2010 2011 Source:
Measuring Industry Digitisation-Leaders and Laggards in the Digital economy Additionally, policy makers should be aware that even within one industry,
most progress in terms of digitisation can be found in the underlying ICT infrastructure and the presence and connection to internet (i e. business function‘infrastructure),
'whilst input, processing and output functions are impacted less by digital technologies. More information on those business dimensions can be found in the annex (digitisation index.
Figure 7 Overall degree of digitisation across business processes (2011) Source: Booz & Company (2011.
Measuring Industry Digitisation-Leaders and Laggards in the Digital economy When looking into greater detail at companies in particular industries that are pushing the uptake of digital technologies illustrated in Figure 8 the differences among the four business process dimensions
stand out even more vividly: Looking at the input dimension, there is a significant variation across industries, ranging from+17 points in the Media & Telecommunications industry to-10 points in the Consumer goods industry;
0 1 2 3 Hotels & Restuarants 4 5 6 Computers & Electronics Real estate, Rental & Leasing Trade & Retail Business & Administrative Services Utilities Media
& Telecommunications Consumer goods Transportation & Logistics Chemicals Construction Basic Manufacturing Equipment & Machinery Automotive Financial services & Insurance Leading Midfield Lagging Infrastructure 10 85 90
95 100 Output 5 Processing 0 Input 15 20 25 30 35 40 45 50 55 60 65 70 75
which the digitisation process takes place differs substantially across industries Digitisation is significantly higher in the‘infrastructure'business dimension 19 Analysing the processing dimension industries vary by no more than 15 points in their degree of infrastructure digitisation;
Measuring Industry Digitisation-Leaders and Laggards in the Digital economy As a result, it is clear that industries primarily dealing with information
and challenges will be crucial to capturing the true value of digitisation. Digitisation affects and connects both ICT technology providers and users.
As both sides change disruptively boundaries between them are becoming blurred: Players both old and new face real challenges in meeting the demand for new products and services in the age of digitisation,
and the challenges aren't just technological. In what was used to be a relatively stable business environment for the old-line ICT service providers,
& Logistics Business & Administrative Services Utilities Basic Manufacturing Chemicals Trade & Retail Equipment & Machinery Automotive Media & Telecommunications Computers & Electronics Financial services & Insurance-15
cooperation between innovative enterprises7 and suppliers of equipment, materials, components or software ranged between 10 and 50,
%whilst the remaining enterprises relied solely on internal resources (see Figure 9). Figure 9 Enterprises cooperating with suppliers of equipment, materials, components or software(%of total innovative enterprises) Source:
Today most jobs already require some kind of computer related knowledge. Whilst ICT specialists8 accounted for around 3-4%of EU employment,
by 2015,90%of jobs will need at least basic computer skills10. Acquiring those skills is thus rapidly becoming a precondition for employees to become
and higher level skills wherever they are available on a worldwide basis, the separate disciplines of design, engineering, computer science,
The legal and regulatory framework currently leaves too much opportunity for fragmentation and does not always take into account new and alternative financing sources like crowdsourcing. 31 Traditional financing sources such as bank loans
World Economic Forum (2012), Crowdsourcing. org & Massolution; Deloitte analysis Innovative and growth-oriented SMES and entrepreneurs often depend on capital from external sources as they do not have their own resources
Also, the 2013 Commission Staff Working Document'Strengthening the environment for Web entrepreneurs in the EU'24 proposes an action with regard to venture capital
Strengthening the environment for Web entrepreneurs in the EU Lack of information and financial knowledge is for some SMES
which the digitisation process takes place. Additionally, Figure 15 indicates that the process of digitisation differs not only along sectors
but across geographic borders as well. Figure 15 Digitisation differences across industries and regions (2011) Source:
Booz & Company (2011. Measuring Industry Digitisation-Leaders and Laggards in the Digital economy Generally, central and northern economies are more digitised
and those economies lead Eastern and Southern Europe in all but one industry(‘real estate, rental & leasing').
'Given the link between the extent of digitisation in a particular country and its GDP per capita (see annex),
& Restaurants 60 Financial services & Insurance Computers & Electronics Media & Telecommunications Automotive Equipment & Machinery Trade & Retail Chemicals 10 15 20 25 30 35
The process of digitisation differs, not only across sectors, but across geographic borders as well 34 legal frameworks, too often preventing SMES
As a result, entrepreneurship became‘hot'in Sweden with digital icons such as Niklas Zennström (Skype)
Since early 2000 U k.'s digital economy is steadily growing To take up this trend, the U k. government commitment has articulated a strong vision for the U k. to emerge as a leading centre in the new high tech economy
and to be the best place in the world for entrepreneurs to launch and grow innovative digital business embedded in the Plan for Growth Underneath this national programme a long list of policies
and core transferable competences they need to succeed in high-skill occupations; Providing more opportunities for students to gain additional skills through study
and other online services in January 2012, containing 16 actions aimed at identifying the main obstacles to the Digital Single Market an doubling the volume of ecommerce in Europe by 201530.30 COM (2011) 942 final.
50 0 10 20 30 40 50 60 70 80 90 100 Target 100%Broadband coverage for all 25%of pop. using e-government
and returning forms 50%of pop. using e-government 15%of pop. having never used the internet 75%of pop. using internet regularly 60%of disadvantages people using internet regularly 50%of pop. buying online
>100 Fast broadband(>30 MPS coverage for all) 2020 target 2015 target 2013 target Progress has been made
Integrating technological developments such as cloud computing, communication on radio spectrum sharing, guidelines on state aids on broadband, etc.
and strengthen competition across all networks. 4. For cloud computing, the Commission will launch pilot actions in the European Cloud Partnership,
the European commission aims to further stimulate the digital economy. According to the European commission, full implementation of the updated Digital Agenda would enhance growth with a 5%expected increase of European GDP by 2020.
Launch specific actions for web entrepreneurs. Strengthen competences and skills. Adopted in June 2008, the Small Business Act for Europe reflects the European commission's political will to recognise the central role of SMES in the EU economy.
and grow. 2. Smart regulation to enable SMES to concentrate on core business. 3. Making full use of the single market. 4. Helping SMES face the challenges of globalisation and climate change.
Starting from raising general ICT awareness and financing basic ICT investments and internet connectivity, e-business policies have matured towards personalised ebusiness coaching,
"Stimulating smart use of information technologies and the integration of SMES in global digital value chains".
Looking at the digitisation index (see also the chapter'Barriers and Challenges')it is clear that overall digitisation has gone up for all industries,
and to jointly identify innovative ideas to increase digitisation in these sectors. Development and promotion of information sessions on digital innovation
and to jointly define actions to increase digitisation. Design and launch of a series of digital innovation campaigns targeting less digitised 1 Impact:
generate as many ideas as possible to increase digitisation in less digitised industry sectors. -Second phase:
Receiving input about innovative ideas for the promotion of the digitisation of industrial sectors is important for the increase of actual entrepreneurship related to digital applications.
ACTION 7 Open data initiatives Connect to the Commission's open data initiatives in order to stimulate the use of open public data for the creation of new business opportunities and services.
Description Leveraging and connecting to the EU Open Data Strategy for Europe initiated in 2011 Strengthen existing initiatives on open data such as:
-The European union Open Data Portal, a single point of access to data from the institutions and other bodies of the EU-Publicdata. eu, a pan European data portal providing access
to open, freely reusable datasets from local, regional and national public bodies across Europe. This portal has been developed by the Open Knowledge Foundation, a UK-based 2 Impact:
LOW Effort: LOW 2 Impact: MEDIUM Effort: LOW-MEDIUM 54 nonprofit foundation as part of the LOD2 (Creating knowledge out of interlinked data) project,
an ICT research project financed under the European commission's 7th Framework Programme-The Open data challenge,
Europe's biggest open data competition Encourage European entrepreneurs to access and use this data to transform raw data into apps, websites or other products.
Leverage success stories to increase awareness and encourage more people to use data and transform it into innovative products or services.
Feature best practices in order to attract more data, both from public authorities and the private sector.
Owner: European commission Member States Private partners Data has been referred to as the new raw material of the twenty-first century.
Open data, employed by digital entrepreneurs in combination with open platforms, open standards and open licences, has the potential to create enormous business opportunities.
However, companies and entrepreneurs using open data need to be nurtured and supported if they are succeed to.
In this respect, action can be taken by the European commission to encourage the supply side of the business landscape in opening (public) data
and supporting digital entrepreneurs willing to use this data (demand side). ACTION 8 Embedding entrepreneurship in education Strengthen the development of the European reference framework on embedding entrepreneurship in education (especially in the fields of science, technology,
engineering and mathematics) listing best practices and providing Member States with recommendations on how this framework should be translated into national policies.
Description Strengthen the ongoing development of policy guidance on entrepreneurship education, announced in the Rethinking Education Communication and providing rationale,
and mathematics) wanting to work in Europe's digital economy. Development of a funding programme or a tax reduction system that will established support businesses when hiring a specialised individual in specific fields vital for the business of the company.
and the private sector-online courses to close knowledge gaps (e g. accounting, web development, coding,).Description Leverage the European ecompetence Framework to identify which e-leadership skills are currently lacking across the European union.
Development and promotion of open online courses in various fields (e g. accounting, web development, finance. Owner:
and support-web portal as single point of information on existing financial instruments for entrepreneurs Actively promote these financial instruments through:
ACTION 17 Monitor the evolution of digital entrepreneurship Establish a digital entrepreneurship scorecard and monitor the evolution of digital entrepreneurship across Member States:
-The take-up of digitisation across industries and the evolution of digital skills, eleadership skills and talent across Europe.
a central website linking to the national Points of Single Contact. Leverage the Service Directive to extend the scope of PSCS to other sectors (currently covers the services sector only.
All PSCS are part of the European EUGO network, a central website to access all PSCS in Europe.
This coordination can be facilitated by the setting up of a strategic policy group at the European level with the aim to monitor,
and networking platforms 6 Erasmus for young entrepreneurs 7 Open data initiatives 8 Embedding entrepreneurship in education 9 Encourage students
7) Open data initiatives Connect to the Commission's open data initiatives in order to stimulate the use of open public data for the creation of new business opportunities and services.
Pillar 4: Ease the access to finance and enhance investments (13) Promote use of existing financial instruments Promote the use of existing European financial instruments and initiatives such as Horizon2020, the European Investment Fund, JEREMIE (Joint European Resources
and the private sector-online courses to close knowledge gaps (e g. accounting, web development, coding,).Pillar 4:
Boost digitally powered Single Market (17) Monitor the evolution of digital entrepreneurship Establish a digital entrepreneurship scorecard and monitor the evolution of digital entrepreneurship across Member States:
this report shows that digitisation is a trend with many facets. Though affecting every industry and business function, the impact and pace at which digitisation takes place differs across industries and businesses.
Digital technologies disrupt not only existing businesses, but also open up opportunities for new companies in new industries.
The future of doing business in the digital age will mainly depend on the outlook of both digital progress and the European business climate.
This outlook will be influenced highly both by the choices individuals and businesses make on using digital technologies
Digitisation is therefore not only about technology start-ups; greater use of technology is needed in all companies across all sectors.
launching awareness campaigns on digital entrepreneurship, the use of open data, promotion of existing financial instruments and leveraging the national Points of Single Contact are classified as‘quick win'projects.
As the process of digitisation evolves and matures, it is critical to continuously monitor the evolution of the European digital transformation.
Measuring industry digitisation: leaders and laggards in the digital economy-COM (2013) 151 final. Proposal for a Directive of the European parliament and of the Council on the conditions of entry and residence of third-country nationals for the purposes of research, studies, pupil exchange, remunerated
and unremunerated training, voluntary service and au pairing-COM (2012) 795 final. Entrepreneurship 2020 Action Plan:
Strengthening the environment for Web entrepreneurs in the EU-European commission (2012. A Stronger European Industry for Growth and Economic Recovery.
Using Consumer Segmentation and Social media to Drive Market Growth-Tesco PLC (2012. Tesco Homeplus expands number of virtual stores.
4%2. 9%3. 6%Museums and preservation of historical sites and buildings 0. 0%0. 3%0. 4%0. 4%0. 7
%0. 1%0. 9%Printing and publishing 1. 7%1. 8%1. 4%1. 7%1. 7%2. 6%2. 8%
0. 4%0. 4%0. 6%0. 4%1. 0%Software 1. 6%1. 5%0. 8%1. 5%0
. 9%2. 6%1. 5%0. 9%2. 4%2. 5%2. 0%1. 4%4. 2%2. 5%Telecom
Digitisation Index The Industry Digitisation Index is derived from Eurostat and its 2011 15 information society benchmarking framework.
Amongst other elements, the program captures data on how many companies (of the total number of companies with 10
Booz & Company divided the data into four separate factors, each of which is defined by several sub-factors and components. 1. Digital input:
including data points regarding the use of computer networks as well as electronic transmissions suitable for automatic order processing;
The internal integration sub-factors include data points regarding the existence and use of digital technologies such as enterprise resource planning and customer relationship management,
External integration comprises such activities as electronic data interchange, including the electronic transmission of data with business partners, public authorities,
and financial institutions, as well as activities like supply chain management, which includes the use of electronic data transmissions to and from business partners both upstream and downstream;
3. Digital output: the importance of digital processes in the sales function, including the use of computer networks as well as electronic transmission of data suitable for automatic sales processing;
4. Infrastructure: the sophistication of the underlying IT technology, focusing on the presence and use of computers and computer networks (wired and wireless) as well as the presence and type of connection to the Internet.
The overall index has been constructed by aggregating the results of the data collected for each factor within each industry.
GDP per capita Figure 23 GDP per capita in PPS versus digitisation index Source: Booz & Company (2011.
Measuring Industry Digitisation-Leaders and Laggards in the Digital economy & Eurostat (2011; Deloitte analysis 271 125 127 129 129 131 114 119 121 108 109 94 98 100 100 79 85 73
77 80 84 64 66 66 67 58 46 49 Ireland Austria Netherlands Luxembourg France Italy EU Spain Cyprus Malta
Europe Central/Northern europe Equipment & Machinery Trade & Retail Chemicals Utilities Basic Manufacturing Financial services & Insurance Computers & Electronics Media & Telecommunications Automotive Business & Administrative
The implication is the integration of design into core business operations. Design as a Link between the Innovation Activity of the Firm andthe Market:
Data from across Europe and around the world demonstrates that companies that use design are more profitable,
The micro-data has subsequently becomea case-study of the OECD Secretariat 13 in collaboration withstatistics Denmark.
and monitors the impact of their investment in design and innovation over time'21 compared to Standard and poor's (S&p) 500 companies.
Swedish Companieson Design. 23www. svid. se/en/The-benefit-of-design/Analysis-Companies-that-invest-indesign-are-more-profitable/Quote byteknikföretagen's chiefeconomist Anders Rune,
and oneof its core aspects is the creativity that emerges from the tensions among these various constraints. 28 However,
Software, Medical, Natural resources, Engineering; Exporting; and Illustrate a Clear use of Design in Company SMES. 37anord CONTROL SYSTEMS LTDPOWER Infrastructurecirdan IMAGING LTDMEDICAL Devices/Informaticsforest PRODUCE LTDFORESTRY Design is seen as the‘critical factor'that has got us to where we are.
Conor Maccormack first discovered 3d printing in 1986, when he was a secondary student in Ireland watching a BBC special.
Conor and his brother, Fintan set out to invent a 3d printer with such a low operating cost that the technology could be accessible to everyone. 3d printing technology can be produced in plastics
The developmental process requiredthat the printer would be an easy to use robust design. That it would provide fitness for purpose across a range of demanding usage settings,
without the toxic fumes users of other 3d printers were exposed To further innovation challenges including enhancing the working system including software, mechanical, electrical, electronics and industrial design.
and by December of that year it had launched a full colour 3d printer on the market called the Mcor IRIS. The R&d structure required to ensure an efficient and effective innovation process depended hugely on design thinking across all disciplines.
The Benefits of‘Design thinking'The approach by Mcor was to invent a 3d printing system that would use a commonly available cheap material such that the use of the technology could be opened up to a much wider user population.
and manufacture a better 3d printer than was currently available, while making it accessible and more affordable to a wider market;
in novel medical devices and medical informatics software. The company started in 2010 and now employs 20 people,
and image processing technology they are developing new imaging modalities using x-ray, near infrared and visible light wavelengthsto enhance medical diagnosis techniques.
electrical, electronic and software design work to meet demanding customer performance and usability criteria. Through outsourcing industrial design and manufacturing work Cirdan plays an important role in growing employment and high value industrial skills in Ireland.
The application of design tools and principles in this highly regulated high tech environment to achieve advanced products without identifying it as design is an excellent example of how‘hidden design'plays a major role in bringing products to market.
The research carried out by thecirca Group Europe using a combination of phone and face-to-face interviews,
Data from the European Scoreboard (2009) and Statistics Norway (2007) found that the level of innovation in Norwegian businesses is low compared to other EU countries,
Events, Telephone Advisory Service, Service Essentials Workshop and the Service Strategy Programme. In order to create meaningful impact on a business it is important to engage it over a longer period of time.
the programme involved five SMES across a range of sectors software, manufacturing and services based in the northwest of Ireland.
and an online site was created to manage communications and providea digital forum for the organisations to communicate at any time.
One of the core functions of Design Flanders is to encourage companies to incorporate design in their operations,
This and additional research from Intertradeireland's All-island Business Monitor survey pointed to a lack of strategic planning around how innovation can contributeto business growth.
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