Innovation and digital technology are the main ways to fight climate change and make European companies more competitive.

Innovation is the key to the European Union achieving carbon neutrality by 2050 and will make companies more competitive. This is why it is important to help businesses find digital solutions to their problems. This will enable more green innovation that will strengthen companies’ market positions and help them grow.

Amidst the current crises, it has become apparent that the companies best prepared to operate in a changing environment are using digital technologies. During the war in Ukraine, the COVID-19 pandemic, and even the financial crisis that began in 2008 companies that invested in online commerce, cloud computing, artificial intelligence, advanced robotics, big data and 3-D printing proved much more resilient. These companies made decisions faster, had higher levels of customer satisfaction, lower operating costs and greater reach in the global market.

Yet only half of companies in the European Union are investing in digital technologies. One of the reasons for this is that companies are facing shortages of staff with digital skills, and the other is a lack of funding for the development of digital infrastructure, which some financial institutions do not regard as innovation. Financial institutions in the European Union must be prepared to take greater risks when investing in digital technologies, as the imperative nowadays is to implement and develop digital infrastructure everywhere — from small towns to big cities. Digitalisation underpins the development of innovation, enhances inclusivity, and helps individuals and businesses to integrate into the dynamic, modern economy. For small businesses, digitalisation is key to their survival.

The EIB Group is aware of these needs and has the funding to help companies implement innovative solutions and adopt digital technologies. This is why a group of experts came together in late February for the first EIB Group forum in Luxembourg. They exchanged views on issues such as decarbonisation, climate change, digitalisation and innovation. The debate was informed by the latest research from the EIB Economics Department, which published its annual investment report on 28 February. Innovation and digitalisation were among the main subjects of the forum’s debate — just as they should be in every boardroom.

In the global village, we are all connected

We are in the middle of the biggest digital transformation ever. Electric cars are already on the road and will soon be driverless. Most information is stored in the cloud. Drones are delivering products in an energy-efficient way, and soon they may be taking us on short trips, using less fossil fuel. Smartwatches are monitoring our health every minute of the day. In Africa, mobile banking and satellite internet connections are allowing people in remote villages to open bank accounts and take out loans to start businesses and become independent. Digital innovation is a vital part of our biggest challenges.

Making sure that everyone can take advantage of technology requires economic and social change. Worldwide, an estimated 3 billion people have never used the internet or surfed the web. The European Investment Bank gives priority inside and outside Europe to digital mobility and connectivity, and especially to bringing fast fibre-optic connections to more homes and offices. This was especially important during the pandemic, when people worked from home and children went to school online. In 2022, 6.6 million subscribers joined the 5G network thanks to funding from the EIB Group.

Green and digital solutions trigger innovation

An estimated 50% of the technology we need to fight global warming has not been developed or is in its infancy. We must invest heavily to bring new technologies out of the testing stage. Last year, the EIB allocated €18 billion to innovation, including digital skills training. Low investment in innovation and digital skills is holding back the European economy. If we bolster investment in innovation, we will be better prepared for the future and more self-reliant in the event of a crisis.

Digitalisation keeps wind turbines running at peak capacity and means fewer repairs and less energy loss, because technicians monitor maintenance remotely via the internet and use drones to investigate potential problems. Digitally advanced agriculture connects machinery to the internet and gets information on soil conditions, weather and seed availability, making food production more efficient and reducing waste. Because they are faster and use less electricity, 5G networks are up to 90% more energy efficient than the older networks. Traffic cameras and data analyses of traffic flows reduce congestion in major cities and result in fewer accidents, saving fuel and lives.

All this innovation is why we must offer more help to businesses and researchers to discover technologies that we haven’t thought of yet. This is how we will develop revolutionary products to stop global warming and improve the quality of life.

Between 2018 and 2022, the EIB Group provided around €83 billion for digitalisation, innovation, jobs and training. We are ready to increase this funding, as digitalisation and innovation will aid the green transformation of the European economy.