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Barriers and Challenges

The Barriers and Challenges to Unlocking Europe’s Digital Potential

1. Skills

Although businesses are excited about the potential of AI and are increasing their experimentation with AI technologies, only 17% of European businesses can point to a specific day-to-day friction or problem that AI could solve, and this falls to 9% among businesses who say that they have a skills gap. This skills gap has negative effects on the economic revenues of businesses as jobs become difficult to fill. Research by the OECD suggests that skills shortages are particularly common among high-skilled positions such as in management, healthcare, education, or ICT sectors.[1]

Almost half (44%) of European businesses consider difficulty sourcing new employees with the desired digital skills to be a barrier to digital technology positively impacting their business. A further 27% consider insufficient digital skills within the current workforce to be a barrier. The 2023 annual Eurochambres economic survey reaffirms that the lack of skilled workers is an ongoing and growing issue for businesses. Heightened concerns around employment are compounded by skill mismatches, which become accentuated when companies seek to embark on green and digital projects. [2]


Our research further demonstrates how the skills gap impacts upon businesses’ ability to adopt digital tech; 28% of European businesses cited a lack of skills within the business as a barrier to increasing their adoption of AI. This inhibits their ability to meet targets and support their growth.

Indeed, it is already the case that 65% of European businesses currently see digital skills as business critical to their daily operations.



of European businesses currently see digital skills as business critical to their daily operations



of European businesses consider difficulty sourcing new employees with the desired digital skills to be a barrier to digital technology positively impacting their business



of European businesses cited a lack of skills within the business as a barrier to increasing their adoption of AI

Two in three (67%) business leaders predict that in five years’ time a candidate’s digital skills will be more important than their university degree qualifications when it comes to hiring. As such, the digital skills gap will have increasing relevance for employees in the coming years. Despite the acknowledged importance of skills, this is not yet reflected in the digital skills training programmes currently on offer. Fifty-six per cent of European citizens learnt most of their digital skills through independent research, and 42% learnt through trial and error. There is therefore a clear lack of support in filling the skills gap. 


Research conducted by Gallup, commissioned by AWS, found that the average worker with advanced digital skills in high-income countries reported earning 50% more than similar workers who do not use digital skills – this rose to 72% more in middle-income countries.[3]


By  limiting businesses' ability to adopt digital technology, the skills gap inhibits the growth of business and high-skilled sectors. There is still a fallacy held by some businesses that increased tech adoption and automation will necessarily result in a lack of jobs. However, as demonstrated by the case studies showcased in this report, digital technology adoption can pave the way for more and higher-skilled jobs. For instance, Cardiomatics’ use of AI to read ECGs signals improves diagnostic accuracy, enabling cardiologists to focus on treatment while cloud improves security and confidentiality.

Case Study: 
Cardiomatics: Transforming Patient Care with Cloud, AI, and Machine Learning
  • 46% of citizens think that AI will have a positive impact on healthcare.

  • 80% of businesses think that AI will transform healthcare in the next five years.


Cardiomatics is a Polish healthcare startup and AWS customer that uses cloud-based AI technology to analyse ECG signals with greater speed and accuracy than cardiologists. By transforming diagnosis with machine learning and AI, Cardiomatics can revolutionise patient access to healthcare.


Core Features:

  • Accurate and Fast: Cardiomatics is Certified as Medical Device Class IIa (through Medical Device Regulation – MDR) [4] certification so that professionals can use it for high-precision diagnostics, and quickly: Cardiomatics reduces the diagnosis time by up to 80% compared to manual methods.

  • Secure: Cardiomatics employs secure cloud technology to safeguard patient data and diagnostic information. This data security enhances patient confidentiality and ensures the privacy of sensitive healthcare information.

  • Powered by AI: Cardiomatics uses AI algorithms and has processed an extensive dataset of over 6 million hours of ECG recordings.


Key Advantages:

  • Accuracy: Cardiomatics is classified as a CE-marked medical device, harnessing algorithms that have analysed large datasets. The effectiveness of Cardiomatics algorithms has been validated in clinical trials and ensures high accuracy.

  • Fast ECG Analysis: Cardiomatics reduces the time of ECG analysis by up to 80% and facilitates diagnosis of more patients. Its speed outpaces manual analysis and offers a cost-effective solution.

  • User-Friendly: The Cardiomatics software was specifically developed with digital technology to offer an intuitive interface and easy-to-read ECG reports. Thanks to cloud connectivity, Cardiomatics is accessible anytime and anywhere with a web browser. As a hardware-agnostic platform for arrhythmia diagnostics, the technology is compatible with more than 25 common ECG recording devices enabling further accessibility.


How AI and cloud technologies have helped Cardiomatics raise its business ambitions:

  • AI technology has provided Cardiomatics with a new and unique model to disrupt traditional cardiology healthcare methods. They are the only company that deploys this type of software in clinics with ECG experts.

  • Cardiomatics has provided support to clinicians by increasing the flow of information and increasing the speed and quality of the diagnostic process. This gives them the tools to provide high-quality healthcare to their patients.

  • Cloud computing enables high levels of data security and privacy, which means Cardiomatics can offer their products to support healthcare institutions.

2. Legal and regulatory uncertainties

The rapid recent advances in digital technological change have made it difficult for legal frameworks to adapt and keep pace. The regulatory framework at the European level has also undergone significant revision or expansion. Data compiled by Bruegel suggests that around 80 new legislative initiatives with relevance for the adoption of digital technologies have been adopted since 2019.[5] As a result, businesses face difficulties understanding how new regulatory requirements apply to them and how best to implement guidance issued from national governments. Businesses are more likely to experiment and innovate in a regulatory environment with lower administrative and compliance costs, which incentivises digital growth and adoption. This does not always match the broader EU discourse or wider goals, but due to the rapidly evolving technological landscape, the lack of flexibility in newly conceived regulation becomes quickly outdated.

Our study found that 21% of European businesses cite compliance and legal uncertainties related to digital technology to be a barrier to the impact of digital tech on their business. This causes tangible frictions in businesses’ ability to choose the right tools. When asked about their future investment plans, businesses that identify compliance and legal uncertainties as a barrier to the adoption of digital technologies report 24% less tech investment over a one-year horizon and 48% over a three–year horizon.

With 21% of businesses being held back from further adoption by compliance and legal uncertainties, there are three areas we’ve identified that can hold back adoption:

New regulations can create uncertainty and delays in uptake, which can deter the collaborative efforts required for startups and scaleups experimenting with digital technologies such as AI to grow rapidly.

Existing regulations are not always updated, with significant missed opportunities to simplify and digitalise. As highlighted by the OECD, regulatory frameworks are not always agile enough to accommodate the fast pace of innovation and, consequently, existing rules become outdated and no longer relevant. [6]

The overall regulatory burden can create significant frictions and uncertainties for businesses. The European Commission has recognised the need for regulatory policy to be responsive to the needs of European businesses. At her 2023 State of the Union address, Commission President von der Leyen committed to setting out a comprehensive legislative approach to AI, noting ‘We want to hear directly from small and medium sized businesses, about their everyday challenges. And next month, we will make the first legislative proposals towards reducing reporting obligations at the European level by 25%. [7]




3. Finance

A third (33%) of European businesses believe that the cost of implementing digital technologies is a significant barrier to adoption.


Although businesses foresee an increase in their investment in digital technologies (60% over the next three years),finances remain a significant barrier to a number of businesses, in particular micro-SMEs. With fewer in-house capabilities to rely on, smaller businesses must have access to financing and to the right expertise. Accounting for over a third of the value added by SMEs to the European economy in the last year, it is imperative that this large segment of the business community be included in measures to achieve the Digital Decade goals.[8]


Additionally, 45% of European citizens view the cost of training programmes as a significant barrier preventing them from acquiring new digital skills. Considering the number of businesses who seek to hire workers with an established set of digital competencies, training and education must be available to individuals at all stages in life.

This study notes that for all businesses, but particularly micro-SMEs, addressing financial barriers is essential to foster wider digital adoption and participation.

4. Consumer knowledge and confidence

A lack of consumer knowledge and confidence in emerging digital technologies remains an important barrier that is hindering Europe from unlocking its digital potential.


Knowledge gaps are evident as:

Only one in five (19%) of European citizens are very familiar with the concept of cloud computing

While a further 28% have heard of the concept but do not know what it means

44% had not heard of the concept

This is compounded by the lack of awareness around advanced technologies. Twenty-nine per cent of European citizens are very familiar with the concept of AI, while a further 45% have heard of it but do not know what it means, and one in five (20%) said they had not heard of AI. Only 10% of European citizens claimed an advanced or very advanced understanding of generative AI.


Ultimately the vagueness surrounding the concept of AI is a double-edged sword: it promotes great excitement and deep uncertainty.


Indeed, while our research showed the enthusiasm for AI in automating routine tasks and its application to big societal challenges, there are also worries about its future development.

Although citizens report some concerns about AI’s impact on jobs, emerging research has shown that AI can be harnessed to drive job growth. The 2023 World Economic Forum Future of Jobs Report estimates that the impact of most technologies on jobs is expected to be a net positive over the next five years, with AI specifically expected to have a 25.6% net positive effect on job growth over the next five years.[9] Furthermore, the use of AI to automate repetitive basic tasks will enable employees to focus on more high-value, creative work.


Addressing these concerns is paramount to unlocking the digital ambitions of the decade ahead.


1.  OECD (2022) World Indicators of Skills for Employment (WISE) database. Available at:

2. Eurochambres (2023) Eurochambres Economic Survey 2023 Report. Available at:

3. Gallup & AWS (2023) AWS Global Digital Skills Study. Available at:

4. Medical Device Regulation applies to any instrument, apparatus, appliance, software, implant, reagent, material, or other article intended by the manufacturer to be used, alone or in combination, for human beings for a specific medical purpose. See:


6. OECD (2021) Case Studies on the Regulatory Challenges Raised by Innovation and the Regulatory Responses. Available at:

7. European Commission (2023) State of the Union Address by President von der Leyen. Available at:

8. Statista (2023) Value added by SMEs in the European Union 2008-2022, by size. Available at:

9. The World Economic Forum (2023) Future of Jobs Report. Available at:

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