One important ecosystem, as defined by the European Union and distinct from others, is the digital ecosystem. This ecosystem will be further analyzed in the RISE-SME project alongside the textile, agrifood, and automotive-transport-mobility sectors. With the EU’s commitment to the “Digital Decade” initiative, the digital ecosystem is vital for developing, implementing, and translating new opportunities into practical applications.
The digital ecosystem is highly dynamic and largely dominated by large companies. However, SMEs play a vital role, particularly through their contributions to niche markets amidst rapid technological advancements and fierce global competition. According to the ecosystem definition using NACE classifications, the digital industrial ecosystem comprises sectors such as computer programming, consultancy, information service activities, telecommunications, and publishing. Furthermore, it partly incorporates relevant aspects from the manufacturing of computers, electronics, and optical products. Regarding net turnover, the major focus is in the areas of computer programming and telecommunication. Key technologies supporting this ecosystem include advanced manufacturing and robotics, followed by artificial intelligence, big data, cloud technology, photonics, digital security, blockchain, and the Internet of Things (IoT).
From 2018 to 2022, the digital industrial ecosystem in the EU saw significant growth. The workforce expanded from 6.6 million employees in 2019 to 7.1 million in 2022. In 2018, the ecosystem comprised 1.2 million companies, with 99.8% classified as SMEs. In 2021, the ecosystem generated EUR 625 billion in value added, highlighting its considerable economic impact.
Analysing the EU digital ecosystem by net turnover, number of companies, and workforce size (Fig.1) reveals its significance across different member states. The most representative countries in number of employees are Germany, France and Italy, while Poland has a high number of companies and employees but with a reduced net turnover. Collectively, the top five member states employ over 3 million people and generate a net turnover of EUR 8 billion in the digital ecosystem, underscoring the ecosystem’s importance.
Given the unique and innovative nature of the digital ecosystem, a strict definition based solely on NACE sectors may not adequately capture its essence and boundaries. Therefore, the Digital Techno-Economic ecoSystem (DGTES) adopts an approach that defines the ecosystem based on the novelty of the digital technologies utilized and further developed. This includes a list of emerging digital areas such as AI, Blockchain & Distributed Ledger, cybersecurity, additive manufacturing, and others, highlighting the ecosystem’s focus on innovation.
Resilience & Critical Factors
RISE-SME has analyzed four ecosystems—textile, food, digital, and transport—to identify the key critical factors affecting them in recent years. Below, we detail some of the primary challenges hindering successful transformation and impacting the EU’s technological leadership within the digital ecosystem.
Political Conflicts and Crises
Political conflicts and crises present a significant challenge for the digital ecosystem. There is an urgent need for clear regulations governing the development and use of new technologies, particularly concerning their accessibility. In the absence of an appropriate legal framework, new laws can limit the use of certain technologies, adversely affecting product development and marketing. This, in turn, impacts companies’ innovative capacity, strategic planning, and market positioning.
Technological disruptions and low digital maturity
Technological disruption and low digital maturity are critical issues for the digital ecosystem. Many customers, particularly small and medium-sized enterprises (SMEs), lack awareness of the digitalization process and the necessary steps for effective implementation. This knowledge gap prevents them from fully leveraging digital technologies. Additionally, existing IT systems in these organizations often lack compatibility with modern digital solutions, necessitating substantial investments in upgrades and integration. This poses a significant barrier to adopting new technologies and limits growth and innovation potential. Therefore, enhancing digital literacy and supporting technology upgrades are essential for overcoming these challenges.
Challenges in sustaining existing business model
Challenges in sustaining existing business models are a critical concern for the digital ecosystem. Companies often struggle to maintain their current models amid market changes and evolving consumer expectations, driven by rapid technological advancements and intense global competition. As technologies progress and consumer demands shift, businesses must continuously adapt to stay competitive. Unforeseen changes in market demand may require companies to realign their development and distribution strategies, which can be resource-intensive and complex. This constant need for adaptation poses a significant challenge, especially for firms reliant on established models and processes. To navigate these issues, organizations must cultivate innovation, agility, and a forward-thinking mindset to remain resilient and thrive in the evolving digital landscape.
Skill Gaps
The final critical factor for the digital ecosystem is the skills gap. The shortage of skilled workers across various ecosystems undermines the EU’s industrial competitiveness and hampers digital transformation efforts. Special emphasis must be placed on understanding cybersecurity, as this knowledge reduces the risk of digital threats and mitigates reluctance to adopt new digital tools. Addressing these skills gaps is essential for organizations to effectively navigate the regulatory landscape and capitalize on technological advancements. Closing these gaps can enhance the overall resilience and adaptability of the digital ecosystem.
These critical factors will be the starting point for the second part of the project to define strategies to increase resilience of SMEs in digital ecosystem with application of advanced technologies.
AUTHORS
Lorenz Kiebler
Fraunhofer IML
Lorenz Kiebler is a research associate at the Fraunhofer Institute for Material Flow and Logistics in Dortmund, Germany, focusing on supply chain resilience and the digitalization of cross-company business processes. In European and national research projects such as AI-CUBE, he investigates the digital transformation of supply chain processes and the integration of innovative technologies. By working as a project manager in industrial projects, he transfers insights from applied research directly into industrial practice.
Jakob Jacobsen
Fraunhofer IML
Jakob Jacobsen started as a research assistant at Fraunhofer after completing his Master of Science in mechanical engineering at the TU Dortmund. Here he is working in the field of supply chain management with a focus on the application of AI. In previous industry projects, he also had the opportunity to investigate the resilience of supply chain networks from a business analytics perspective.
Lucas Schreiber
Fraunhofer IML
Lucas Schreiber works as a Senior Scientist in the Supply Chain Engineering department at the Fraunhofer Institute for Material Flow and Logistics IML in Dortmund. He specializes in the simulation of supply chain management systems and employs simulation-based optimization techniques to enhance operational efficiency and resilience. His work includes industry applications and a leading role in the in the Gaia-X initiative, focusing on creating technology driven supply chain strategies that can adapt to changing market conditions.
