Digital Economy and Society Index (DESI) 2022

Integration of digital technology

 Digital Economy and Society Index 2022
Integration of digital technology
Table of Contents
1 Integration of digital technology .................................................................................................. 3
1.1 Digital Intensity Index ........................................................................................................... 5
1.2 Adoption of digital technologies by enterprises .................................................................. 7
1.3 Cloud computing .................................................................................................................. 8
1.4 Big data ................................................................................................................................. 9
1.5 Artificial intelligence (AI) .................................................................................................... 10
1.6 Unicorns ............................................................................................................................. 12
1.7 e-Commerce ....................................................................................................................... 18

Table of Tables
Table 1 Integration of digital technology indicators in DESI ................................................................ 4

Table of Figures
Figure 1 Digital Economy and Society Index (DESI) 2022, Integration of digital technology ............... 5
Figure 2 Digital Intensity Index indicators tracking digitisation processes (% enterprises), 2021 ....... 5
Figure 3 Digital Intensity Index by level (% of enterprises), 2021 ........................................................ 6
Figure 4 SMEs with at least basic level of digital intensity, 2021 ......................................................... 6
Figure 5 Adoption of digital technologies (% entreprises), 2020, 2021 ............................................... 7
Figure 6 Cloud computing services of sophisticated or intermediate level (% of enterprises), 2021 . 8
Figure 7 Cloud computing services of sophisticated or intermediate level per country (% of
enterprises), 2021 ................................................................................................................................ 8
Figure 8 Cloud computing services of sophisticated or intermediate level per sector (% of
enterprises), 2021 ................................................................................................................................ 9
Figure 9 Enterprises analysing big data (% of enterprises), 2020 ...................................................... 10
Figure 10 Enterprises analysing big data per sector (% of enterprises), 2020 ................................... 10
Figure 11 Enterprises using an AI technology (% of enterprises), 2021 ............................................. 11
Figure 12 Use of AI technology by enterprise size (% of enterprises), 2021...................................... 11
Figure 13 Use of AI technology by sector (% of enterprises), 2021 ................................................... 12
Figure 14 The definition of unicorns included in the analysis ............................................................ 12
Figure 15 Number of unicorns per EU Member States ...................................................................... 13
Figure 16 Global start-up ecosystem ranking 2021............................................................................ 14
Figure 17 Most valuable unicorns worldwide as of 2022.03.01 ........................................................ 14
Figure 18 Most valuable unicorns in the EU as of 01.03.2022 ........................................................... 16
Figure 19 EU unicorns by industry as of 2022.03.01 .......................................................................... 17
Figure 20 Future unicorns vs number of start-ups (in thousands)..................................................... 18
Figure 21 Global share of start-ups vs Series A deals 5 year-growth in 2021 .................................... 18
Figure 22 Trends in e-commerce (% of SMEs, % of SME turnover), 2015-2021 ................................ 19
Figure 23 SMEs selling online and selling online cross-border (2021) (% of SMEs) ........................... 20

2
 Digital Economy and Society Index 2022
Integration of digital technology
1 Integration of digital technology
Digital technologies enable businesses to gain competitive advantage, improve their services and
products and expand their markets.
In a recent study by McKinsey, 93% of surveyed EU executives believe that better access to data
would be important to their organisation (with approximately 40% designating this as very
important)1. Research by the Organisation for Economic Co-operation and Development (OECD)
suggests that productivity of companies investing in data-driven innovation and data analytics grows
by approximately 5% to 10% faster than that of companies not investing2.
The EU’s digital sovereignty will depend on the capacity to store, extract and process data while
satisfying requirements of trust, security and fundamental rights3. This requires a high-capacity
infrastructure and the adoption of innovative technologies, which will enable the development of
energy-saving, climate-neutral, high-efficiency and interconnected services. Additionally, the EU’s
digital sovereignty should be restored through more resilient supply chains and less dependence on
imports, notably of semiconductors.
This DESI dimension measures the digitalisation of businesses and e-commerce and in particular the
uptake of digital technologies by businesses from a very basic to an advanced level. These include
electronic information sharing, the use of social media, but also the use of more advanced
technologies such as big data analytics, cloud services and artificial intelligence (AI). Specific
emphasis is put on e-Commerce, with indicators related to SMEs selling online both nationally and
in other EU countries (i.e., cross-border), and the share of turnover stemming from these. These
indicators are sourced from the European Union survey on ICT usage and e-commerce in enterprises.
Given the growing importance of sustainability within enterprises, the indicator on ICT for
environmental sustainability captures the share of enterprises having medium/high intensity of
green action4 through ICT.
In its Path to the Digital Decade proposal, the European Commission set out the following ambitious
targets to be reached by 2030 in the Integration of Digital technologies dimension: more than 90%
of European SMEs to reach at least a basic level of digital intensity, 75% of EU companies to use
cloud, AI and big data and grow scale ups & finance to double EU Unicorns. The DESI monitors the
implementation of the first two groups of targets on basic digital intensity and adoption of advanced
technologies. Digital intensity is measured via the Digital Intensity Index (DII) (details provided
below). As the target for unicorns is set at EU level, it is not included in the DESI index, which
compares performance on a Member State level. A separate section below is dedicated to unicorns.
Significant amounts of RRF funding could directly or indirectly contribute to the Digital Decade
targets related to the digitalisation of business, including measures worth EUR 24 billion supporting
the digitalisation of business and the measures worth EUR 18 billion supporting digital-related R&D
and the deployment of digital capacities.

1
McKinsey. Shaping the digital transformation in Europe, September 2020.
2
OECD (2015). Data-driven innovation: big data for growth and well-being, OECD Publishing, Paris.
3
Strategic Foresight Report 2021, COM (2021)750 final.
4
For a list of green actions, see p. 12 of the DESI 2021 report on the Integration of digital technology
(https://ec.europa.eu/newsroom/dae/redirection/document/80555)

3
 Digital Economy and Society Index 2022
Integration of digital technology
23 Member States propose investments (and some also reforms) generally supporting the
digitalisation of businesses, with the largest investments coming from Italy, Spain, Germany and
Greece. A multi-country project establishing a network of European Digital Innovation Hubs is also
supported in 8 RRPs5.

Table 1 Integration of digital technology indicators in DESI

EU EU
DESI 2020 DESI 2022
3a1 SMEs with at least a basic level of digital intensity NA 55%
% SMEs 2021
3b1 Electronic information sharing 36% 38%
% enterprises 2019 2021
3b2 Social media6 23% 29%
% enterprises 2019 2021
3b3 Big data 12% 14%
% enterprises 2018 2020
3b4 Cloud 7 NA 34%
% enterprises 2021
3b5 AI NA 8%
% enterprises 2021
3b6 ICT for environmental sustainability NA 66%
% enterprises having medium/high intensity of green action through
ICT 2021
3b7 e-Invoices 25% 32%
% enterprises 2018 2020
3c1 SMEs selling online 17% 18%
% SMEs 2019 2021
3c2 e-Commerce turnover 11% 12%
% SME turnover 2019 2021
3c3 Selling online cross-border 8% 9%
% SMEs 2019 2021

Source: DESI 2022, European Commission.

The top performers in the integration of digital technologies are Finland, Denmark and Sweden.
Romania, Bulgaria and Hungary show the weakest performance.

5
See 1.1 for more details.
6
For social media the Eurostat indicator ‘Use two or more social media’ (code: E_SM1_GE2) is used. See DESI
methodological manual.
7
For cloud the Eurostat indicator ‘Enterprises buying sophisticated or intermediate cloud computing services’
(code: E_CC1_SI) is used. See DESI methodological manual.
4
 Digital Economy and Society Index 2022
Integration of digital technology
Figure 1 Digital Economy and Society Index (DESI) 2022, Integration of digital technology

Source: DESI 2021, European Commission.

1.1 Digital Intensity Index8

The Digital Intensity Index (DII) measures the use of different digital technologies at enterprise level.
The DII score of an enterprise is based on counting how many out of 12 selected technologies are
used.
Figure 2 shows the composition of the DII in 2021. It also shows the degree of penetration and speed
of adoption of the different technologies monitored by the DII. Large companies in the EU are more
digitised than SMEs. While some aspects seem to be reaching saturation, at least for large
companies, there is still room for improvement for most indicators.

Figure 2 Digital Intensity Index indicators tracking digitisation processes (% enterprises), 20219
Large SMEs

The maximum contracted download speed of the fastest fixed line internet connection is at least 30 Mb/s 95% 80%
Use any social media 83% 58%
Enterprises where more than 50% of the persons employed used computers with access to the internet for
business purposes 58% 49%
Use of any cloud service 72% 40%
Have ERP software package to share information between different functional areas 81% 37%
Have CRM 65% 34%
Buy intermediate-sophisticated CC services 60% 33%
Use of at least 2 social media 61% 28%
Use any IoT 48% 28%
Enterprises with e-commerce sales of at least 1% turnover 38% 18%
Enterprises where web sales are more than 1% of the total turnover and B2C web sales more than 10% of the
web sales 12% 11%
Use any AI technology 28% 7%

Source: Eurostat, European Union survey on ICT usage and e-commerce in enterprises.

8
The digital intensity index 2021 is not comparable with the DII from 2020 as other technologies have been
considered compared to last year.
9
ERP stands for enterprise resource planning. CRM stands for customer relationship management. CC
stands for cloud computing. IoT stands for Internet of Things.
5
 Digital Economy and Society Index 2022
Integration of digital technology
According to the target of the Path to the Digital Decade proposal, by 2030 more than 90% of SMEs
should reach at least a basic level of digital intensity. Basic DII level requires usage of at least four
technologies and comprises SMEs with very high, high and low DII.
There are only four countries (Finland, Denmark, Malta and Sweden) in the EU where the share of
enterprises with a very high DII (i.e., possessing at least 10 out of the 12 monitored digital
technologies) is above 9%, followed by Austria, Ireland, Slovenia and Germany with above 4%. By
contrast, in countries such as Romania, Bulgaria, Hungary, Greece and Latvia, more than 60% of
businesses have made only a small investment in digital technologies (i.e. have a very low DII).

Figure 3 Digital Intensity Index by level (% of enterprises), 2021

Source: Eurostat, European Union survey on ICT usage and e-commerce in enterprises.

Figure 4 shows the share of SMEs with basic DII score. At least 80% of enterprises in the Nordic
countries (Sweden, Finland and Denmark) reached at least basic level of digital intensity, while in
Romania and Bulgaria it is below 30%.

Figure 4 SMEs with at least basic level of digital intensity, 2021

Source: Eurostat, European Union survey on ICT usage and e-commerce in enterprises.

6
 Digital Economy and Society Index 2022
Integration of digital technology
Overall, the level of digitalisation of SMEs remains uneven across MSs and economic sectors. A key
barrier to be overcome is the lack of awareness of the potential of digital technologies and the lack
of skills and technical expertise among the employees to integrate basic or advanced digital
technologies in the business operations.

1.2 Adoption of digital technologies by enterprises

Large enterprises are more likely to adopt new technologies. For example, electronic information
sharing through enterprise resource planning (ERP) software is much more common in large
enterprises (81%) than in SMEs (37%). On social media10, more than twice as many large enterprises
(61%) make use of it if compared to SMEs (28%). SMEs exploit e-commerce opportunities only to a
limited extent, with only 18% selling online (versus 38% of large enterprises) and only 9% selling
cross border online (versus 24% of large enterprises). There are many other technological
opportunities yet to be exploited by SMEs such as cloud services11, AI and big data. The possibility of
extracting information from data through advanced data analytics techniques will be essential for
the competitiveness of the EU's economy. Reaching 75% adoption of advanced big data analytics by
businesses across sectors will enable European companies to match the growth in data uptake at
global level and fully exploit the rich new ways to explore and interpret data using AI, natural
language processing and eXtended reality technologies.
There are common factors that play a critical role in enabling and boosting the uptake of cloud
services, big data and AI, such as the availability of staff with advanced digital skills. Additionally,
ensuring legal certainty and addressing data protection and liability issues is very important to enable
the use of data and minimise the risks of breaches in security and data protection.

Figure 5 Adoption of digital technologies (% entreprises), 2020, 202112

Source: Eurostat, European Union survey on ICT usage and e-commerce in enterprises.

10
For social media the Eurostat indicator ‘Use two or more social media’ (code: E_SM1_GE2) is used. See DESI
methodological note.
11
For cloud the Eurostat indicator ‘Enterprises buying sophisticated or intermediate cloud computing services’
(code: E_CC1_SI) is used. See DESI methodological note.
12
These are the DESI 2022 indicators under the sub-dimension 3b and 3c of the Integration of digital
technology dimension. For exact definitions, please see the DESI methodological note.
7
 Digital Economy and Society Index 2022
Integration of digital technology
1.3 Cloud computing

The Path to the Digital Decade proposal requires that more than 75% of EU companies adopt cloud
computing by 2030. In 2021, 34% of EU enterprises purchased sophisticated or intermediate cloud
computing services (i.e. at least one of the following: finance or accounting software applications;
enterprise resource planning (ERP) software applications; customer relationship management (CRM)
software applications; security software applications; hosting the enterprise’s database(s);
computing platform providing a hosted environment for application development, testing or
deployment) and incorporated cloud technologies to improve their operations while reducing costs.
The cloud uptake of large companies (60%) almost doubled that of SMEs (33%) in 2021.

Figure 6 Cloud computing services of sophisticated or intermediate level (% of enterprises), 2021

Source: Eurostat, European Union survey on ICT usage and e-commerce in enterprises.

Nordic enterprises are leaders in incorporating sophisticated or intermediate cloud services. More
than 60% of enterprises in Sweden, Finland, Denmark and the Netherlands buy such services. Italy
and Estonia follow at more than 50%. However, the gap between top and low performers remains
large, with Bulgaria and Romania scoring below 15%.

Figure 7 Cloud computing services of sophisticated or intermediate level per country (% of enterprises), 2021

Source: Eurostat, European Union survey on ICT usage and e-commerce in enterprises.

When looking at cloud usage by sector, more than two thirds of enterprises in the ICT sector (66%)
use cloud computing services of sophisticated or intermediate level, followed by publishing activities
with 60%. The sectors with the least cloud usage are the construction sector (26% of enterprises)
and the transport and storage sector (29% of enterprises). These are followed by manufacturing at
8
 Digital Economy and Society Index 2022
Integration of digital technology
32% of enterprises. This sectoral distribution is coherent with the general digitisation of sectors, as
construction and transport display the lowest level of overall digitisation. This is partly inherent to
the characteristics of these sectors that rely less on digital technologies.

Figure 8 Cloud computing services of sophisticated or intermediate level per sector (% of enterprises), 2021

Source: Eurostat, European Union survey on ICT usage and e-commerce in enterprises.

1.4 Big data13

The Path to the Digital Decade target requires that more than 75% of EU companies adopt big data
by 2030. Big data are characterised by volume, variety and velocity, i.e., vast amounts of data, which
are complex in nature, in different formats and frequently generated. Big data analytics refers to the
use of technologies, techniques or software tools such as data or text mining and machine learning,
for analysing big data extracted from the enterprise's own data sources or other data sources.
Enterprises all over the EU are constantly adapting to new technologies for collecting, storing and
analysing data. In 2020, 14% of companies carried out big data analytics. This helped them to
produce near time or real time results from data that come in different format types. Large
companies have the lion’s share in big data processing (with 34% of them using big data), while SMEs
have still room for improvement to take advantage of all the benefits of big data (14% use big data).
In Malta, almost a third of enterprises analyse big data. The Netherlands and Denmark follow closely
behind, with 27%. At the other end of the spectrum only 5-6% of enterprises in Romania, Slovakia,
Cyprus and Bulgaria analyse big data.

13
There was no update of big data figures in 2021.
9
 Digital Economy and Society Index 2022
Integration of digital technology
Figure 9 Enterprises analysing big data (% of enterprises), 2020

Source: Eurostat, European Union survey on ICT usage and e-commerce in enterprises.

When looking at a sectoral breakdown, enterprises are more likely to analyse big data in the travel
agency; tour operator reservation service and related activities and in the publishing activities14
sectors (both at 28%), followed by the ICT sector at 25%. Only 15% of enterprises carry out big data
analytics in the wholesale and retail trade15 sector, 13% in construction and in real estate activities,
and 10% in the manufacturing sector.

Figure 10 Enterprises analysing big data per sector (% of enterprises), 2020

1.5 Artificial intelligence (AI)

The Path to the Digital Decade target16 requires that more than 75% of EU companies adopt AI
technologies by 2030.
The uptake of AI technologies in the European Union is generally quite low, at 8%. However, there
are some differences among Member States. There are 10 countries that have an adoption rate of

14
Publishing activities; motion picture, video & television programme production, sound recording & music
publishing; programming & broadcasting
15
Wholesale and retail trade; repair of motor vehicles and motorcycles
16
This indicator is based on the share of enterprises using at least two AI technologies.
10
 Digital Economy and Society Index 2022
Integration of digital technology
AI technologies of more than 10%, with Denmark (24%), Portugal (17%) and Finland (16%) leading
this group. There are seven countries with an uptake rate between 5 and 10%, Croatia, Austria, Spain,
Ireland, France, Italy and Slovakia. Another 10 countries have a very low adoption rate, and do not
reach 5% (such as Bulgaria, Estonia, Cyprus, Hungary and Poland, each 3%). With 1%, Romania has
the lowest uptake in the EU. This is in line with the very low level of overall digitisation of enterprises
in Romania. Even basic technologies are not widely used by enterprises (the share of SMEs with at
least a basic level of digital intensity is the lowest in the EU), consequently more advanced
technologies are not widespread either.

Figure 11 Enterprises using an AI technology (% of enterprises), 2021

Source: Eurostat, European Union survey on ICT usage and e-commerce in enterprises.

As with most advanced technologies, the uptake of AI technologies is much higher in large
enterprises compared to SMEs. In 2021 the share of large enterprises adopting AI was three times
higher than those of SMEs (29% versus 7%).

Figure 12 Use of AI technology by enterprise size (% of enterprises), 2021

Source: Eurostat, European Union survey on ICT usage and e-commerce in enterprises.

When looking at a sectoral overview, the ICT sector is clearly much ahead in the use of AI
technologies with 25% of enterprises adopting AI, followed by publishing activities at 18%. Other
sectors, such as real estate activities and manufacturing are much further behind with only 7% of

11
 Digital Economy and Society Index 2022
Integration of digital technology
enterprises using AI. The transportation and storage and the construction sector are the least likely
to use AI technologies, with an uptake of about 5%.

Figure 13 Use of AI technology by sector (% of enterprises), 2021

Source: Eurostat, European Union survey on ICT usage and e-commerce in enterprises.

1.6 Unicorns

A unicorn is a privately held start-up company valued at over USD 1 billion. This is a stage of the start-
up financial development which proves its maturity and success on the global market. For the current
analysis, we include tech companies founded since 1990 that are currently valued at over USD 1
billion, while companies that passed USD 1 billion as a subsidiary are excluded. Companies that may
now be worth less than USD 1 billion, but exited at more than USD 1 billion are also included.

The proposed Digital Decade sets the target of doubling the current number of EU27 unicorns by
2030.

Figure 14 The definition of unicorns included in the analysis

12
 Digital Economy and Society Index 2022
Integration of digital technology
Source: Dealroom

According to Dealroom, as of March 2022 there were 2 282 unicorns in the world. The EU has only
222 (increase from 143 in summer 2021) unicorns, as opposed to 1 243 (increase from 889) in the
US, 530 (increase from 414) in Asia (out of which 306 (increase from 272) in China) and 119 (increase
from 101) in the UK. Therefore, there is substantial room for improvement. Leading EU countries are
Germany 58 (from 44), France 35 (23), Sweden 30 (20) and the Netherlands 24 (19). There are eight
EU Member States without a single unicorn. A few countries made significant progress. Poland
increased its unicorn count by a factor of more than five (from 2 to 11) and Czechia has now four
unicorns having started from zero in 2021.

Figure 15 Number of unicorns per EU Member States

Source: Dealroom, March 2022

In order to be considered a unicorn, a company has to steadily and dynamically grow through all the
development phases supported by the start-up ecosystem. According to Startup Genome, the best
global start-up ecosystems in 2021 were Silicon Valley (1st), New York City (2nd) and London (3rd),
similarly to the previous year. There are no EU ecosystems in the top 10, the best EU ecosystem –
Amsterdam-Delta – was ranked 14th worldwide followed by Berlin (15th), Paris (21st) and Stockholm
(24th). While half of the best 30 ecosystems is located in North America (and also half of the top 10),
only four of them are in the EU. Asia is catching up with 8 ecosystems in the top 30.

13
 Digital Economy and Society Index 2022
Integration of digital technology
Figure 16 Global start-up ecosystem ranking 2021

Source: Startup Genome, The Global Startup Ecosystem Report 2022

Out of the 12 most valuable unicorns in the world, the top five are based in the US and the following
four in China, with none in the EU. Google valued at USD 1.9 trillion took the 1st place from Amazon,
valued currently at USD 1.7 trillion. By comparison, the most valuable EU unicorn Adyen (located in
Amsterdam) has a valuation of EUR 56.8 billion.

Figure 17 Most valuable unicorns worldwide as of 2022.03.01

Name Market Type Valuation Location
(billion
USD)
Google B2C Deep tech 1 900 Mountain
Artificial intelligence View
United
States
Amazon B2C Marketplace & 1700 Seattle
Home living Commerce United
Transportation States
Logistics &
delivery
Tesla B2C Artificial intelligence 808.6 Palo Alto
Motors Energy Autonomous & sensor United
Transportation tech States
Autonomous & Deep tech
sensor tech Selling own inventory
Clean energy Manufacturing
Energy Storage
Nvidia B2B, B2C Machine learning 601.9 Santa Clara
Gaming Deep learning United
Console & PC Artificial intelligence States
gaming Deep tech
Hardware
14
 Digital Economy and Society Index 2022
Integration of digital technology
Meta B2C Big data 510.2 Menlo Park
(Facebook) Media Artificial intelligence United
States
Social Media Advertising
Saas
ByteDance B2C Natural language 400.0 Beijing
Media processing China
Telecom Big data
Content Deep tech
production Subscription

Meituan B2C Artificial intelligence 360.3 Beijing

Telecom Commission China
Marketing Marketplace &
Ecommerce Commerce
solutions
Alibaba B2B Marketplace & 283.0 Huangzhou
Enterprise Commerce China
software Saas
Kuaishou B2C Machine learning 214.0 Beijing
Media Artificial intelligence China
Enterprise Advertising
software
Content
production
Salesforce B2B Artificial intelligence 202.2 San
Marketing Subscription Franciso
Enterprise United
Saas
software States
CRM & sales
Netflix B2C Machine learning 182.6 Los Gatos
Media Artificial intelligence United
States
Streaming Subsciption
BYD B2C Hardware 155.9 Shenzhen
Company Energy Selling own inventory China
Transportation Manufacturing
Energy storage
maintenance
Source: Dealroom

In the EU, Adyen is followed by Spotify and Klarna (both based in Stockholm). Out of the 12 most
valuable EU unicorns, five are located in Germany, three in Sweden and the Netherlands, Ireland,
Denmark and Belgium have one each.

15
 Digital Economy and Society Index 2022
Integration of digital technology

Figure 18 Most valuable unicorns in the EU as of 01.03.2022

Name Market Type Valuation Location
(billion
USD)
Adyen B2B Machine learning 56.8 Amsterdam
Fintech Artificial Netherlands
Payments intelligence
Commission
Saas
Spotify B2C Machine learning 52.0 Stockholm
Music Artificial Sweden
Media intelligence
Streaming Subscription
Klarna B2B, B2C Commission 45.6 Stockholm
Fintech Sweden
Payments

BioNTech B2B Machine learning 36.4 Mainz

Health Artificial Germany
Biotechnology intelligence
Deep tech
Flutter B2C Commission 29.4 Dublin
Entertainment Gaming Ireland
Betting &
Gabling
Genmab B2B Deep tech 17.4 Copenhagen
Health Machine learning Denmark
Biotechnology Artificial
intelligence

Delivery Hero B2C Commission 15.2 Berlin

Food Marketplace & Germany
Food logistics Commerce
and delivery
Zalando B2C Artificial 13.7 Berlin
Fashion intelligence Germany
Footwear Marketplace &
Commerce
ARGEN-X B2B Commission 13.0 Ghent
Health Belgium
Biotechnology

Oatly B2C Selling own 13.0 Malmo

Food inventory Sweden
Innovative Manufacturing
food
16
 Digital Economy and Society Index 2022
Integration of digital technology
AUTO1 Group B2C Marketplace & 12.9 Berlin
Transportation Commerce Germany
Search, buy &
rent
CureVac B2B Manufacturing 12.8 Tubingen
Health Germany
Biotechnology
Source: Dealroom

Figure 19 shows that EU unicorns are most active in fintech (20.3%)17, enterprise software (12.6%)
and health (12.2%), in line with worldwide trends, but it is clear that they exist in almost every sector.
Figure 19 EU unicorns by industry as of 2022.03.01

Source: Dealroom

Figure 20 shows that the start-up ecosystem is a cradle and essential development factor for
unicorns. The more companies exist in the ecosystem, the higher probability that some of them will
reach the valuation of USD 1 billion. The only outlier on the graph is China, where the venture capital
is often controlled by the state through quite a few policies to assert more control over its internet
sector. Verticals from fintech, social media, gaming and e-commerce to livestreaming have
increasingly come under regulatory fire for their unscrupulous growth and the social issues they
produce. The US are currently a clear champion (not in scale on the graph, which has been shrunk
four times to fit in), but other countries are also on the path of growth. In this view, exploiting the
full potential of the EU single market and overcoming the persisting legal and economic barriers
between EU Member States is an important factor.

17
There are 222 unicorns, however some of them are active in more than one sector.
17
 Digital Economy and Society Index 2022
Integration of digital technology
Figure 20 Future unicorns vs number of start-ups (in thousands)

Source: Startup Genome *United States not to scale

Figure 21 shows that the highest number of start-ups are active in AI and big data, and their number
will most likely grow dynamically even further in the future. Three other areas could potentially catch
up: (1) advanced manufacturing and robotics; (2) blockchain; and (3) agriculture technology (agtech)
and new food, as investments are rising in these technologies. However, investments in advertising
technology (adtech) and digital media are falling.

Figure 21 Global share of start-ups vs Series A18 deals 5 year-growth in 2021

Source: Startup Genome

1.7 e-Commerce

The European Commission put forward two legislative proposals to upgrade rules governing digital
services in the EU: the Digital Services Act (DSA) and the Digital Markets Act (DMA). They form a
single set of new rules applicable across the whole EU to create a safer and more open digital space.

18
Series A financing refers to an investment in a privately-held start-up company after it has shown progress
in building its business model and demonstrates the potential to grow and generate revenue. It often refers to
the first round of venture money a firm raises after seed and angel investors.

18
 Digital Economy and Society Index 2022
Integration of digital technology
The DSA and DMA have two main goals: (i) to create a safer digital space in which the fundamental
rights of all users of digital services are protected; and (ii) to establish a level playing field to foster
innovation, growth and competitiveness, both in the single market and globally.19

Around one in five EU small and medium sized enterprises (SMEs) made online sales in 2021,
amounting to 12% of total turnover. Between 2015 and 2021, the percentage of SMEs selling online
increased by 3 percentage points and the turnover of these companies achieved from online sales
increased by 2 percentage points.

Figure 22 Trends in e-commerce (% of SMEs, % of SME turnover), 2015-2021

Source: Eurostat, European Union survey on ICT usage and e-commerce in enterprises.

Enterprises benefit from cross-border e-commerce by exploiting economies of scale. This helps to
reduce costs, increase efficiency, promote competitiveness and improve productivity. Cross-border
e-commerce is even more important for enterprises and especially SMEs that are confined to a small
home market. However, only 9% of SMEs made web sales to customers in other EU countries in
2021. SMEs in Denmark, Sweden, Ireland, Lithuania and Belgium have the largest proportion of
online sales (30% or more). Austria leads in cross-border online sales (16% of Austrian enterprises
have online sales across borders to other EU countries), followed by Belgium, Denmark, Malta and
Slovenia (all above 13%).

19
The Digital Services Act package | Shaping Europe’s digital future (europa.eu)
19
 Digital Economy and Society Index 2022
Integration of digital technology
Figure 23 SMEs selling online and selling online cross-border (2021) (% of SMEs)

Source: Eurostat, European Union survey on ICT usage and e-commerce in enterprises.

A majority (56%) of SMEs with web sales to other EU countries have no difficulties when selling to
customers in other EU countries. On the other hand, 43% report at least one obstacle that is mainly
related to economic factors (e.g. high costs of delivering or returning products, a problem reported
by 28% of SMEs). The problems related to resolving complaints and disputes (13%) and the lack of
knowledge of foreign languages (10%) are also highlighted as difficulties by the SMEs selling online
to other EU countries.

20