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Digital Europe: Realizing the continent’s potential


By Jacques Bughin, Eric Hazan, Eric Labaye, James Manyika, Peter Dahlström, Sree Ramaswamy, and Caroline Cochin de Billy.



Europe is operating below its digital potential. Accelerating digitization could add trillions of euros to economic growth in less than a decade.

Europe is in the midst of a digital transition driven by consumers, thriving technology hubs, and some world-renowned companies. But digitization is also about the extent to which firms and industries invest in and use digital. In these respects, Europe is much less advanced. Yet if its laggards double their digital intensity, Europe can add €2.5 trillion to GDP in 2025, boosting GDP growth by 1 percent a year over the next decade.

What do we mean by digital intensity? It’s the degree to which digitization drives sectors and firms. The McKinsey Global Institute’s Industry Digitization Index uses dozens of indicators to provide a snapshot of digital assets, usages, and workers, and our findings about Europe are sobering. Today, Europe operates at only an estimated 12 percent of its digital potential, compared with the United States’ 18 percent. In addition, there is enormous variation between Europe’s countries: while France operates at 12 percent of its digital potential, Germany is at 10 percent, and the United Kingdom is at 17 percent...

Read more:
http://www.mckinsey.com/business-functions/digital-mcKinsey/our-insights/digital-europe-realizing-the-continents-potential

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