Digital transformation has a large effect on employment and labour market in the EU. Technologies are developing faster than the labour market and the education institutions are able to adjust. Hence, the shortage of digital skills is apparent. Despite the undeniable transformative power of novel technologies, our recent studies revealed that companies in Europe perceive the speed of digital transformation, the need to adapt to it and to develop digital skills very differently. While some innovative companies realise that digital transformation demands a continuous upgrade of technologies and life-long learning of employees, other European companies assume that no radical change is needed to remain competitive in the market. The gap between two mentalities is enormous. Since digital revolution cannot reach sustainable progress without continuous upskilling and reskilling of labour force at work, the skills strategies of the EU companies are essential to close the digital skills gap.

If you consider that only less developed European countries face a digital mentality gap you will be surprised. For example, Angela Merkel and her allies recently admitted that the German economy fell into a false sense of security, due to thriving economic situation, and the country needs to close the digital mentality gap.1 The need for change in successful European companies is low. A large share of “digitally-averse” companies are traditional, well-established SMEs and large enterprises that want to do business as usual. Most European economists argue that the current fortunate financial situation of non-innovating companies is expected to change once the digital divide between them and highly productive and inventive companies will grow. The digital divide in the EU may result in division between lagging and progressive industries and growing economic, social inequality. Lower incomes and demand for new technologies, products and services may lead to stagnation of innovative companies and, consequently, to the slowing down of digital transformation and competitiveness of the EU economy.

There are several digital maturity models that start to link the company mentality and the choice of digital skills development strategies. Below is the model developed by SAP (2017). The managers/owners of companies that lack understanding of digital transformation, novel technologies and business models are more likely to have a chaotic skills development policy. Other recent studies also showed that decision-makers in companies lack knowledge about the market of technologies, therefore they are typically relying on technology providers for advice on the choice, functionalities of particular technologies and on the needed skills to operate technologies.2 Based on feedback of the EU companies, many technology providers fail to explain the use of technologies in simple terms, therefore there is a high demand in business experts with technology focus. The language between digital frontrunner companies and non-innovators contributes to increasing the digital mentality gap.

Digital maturity model: Skill Development for Digital Transformation3

To reduce the digital mentality gap, the public actors should devote more attention to trainings for business owners and managers. These trainings should focus on digital skills, new business models, integration and potential of technologies, and on importance of skills trainings in the digital era. Once digital mentality gap of company decision-makers will be addressed, the progress in closing the skills gap of employees will accelerate.

1 – Carrel, P. and Busvine, D. (2018). Germany needs crisis mentality to close digital gap: Merkel ally.

2 – Technopolis Group, Dialogic and University of Cambridge. (2018). The study on the potential of servitisation and other forms of product-service provision for EU SMEs. Technopolis Group, CapGemini Invent, European Digital SME Alliance. (2018). Supporting specialised skills development: big data, Internet of Things and cybersecurity for SMEs.

3 – SAP. (2017). Maturity Model and Best Practice: skills development for digital transformation.

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