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Recovery plans in Europe and investments in emerging technologies

If 2020 was the year of the pandemic, and everyone had to face the crisis and put in action the best possible response and resilience initiatives, 2021 is the year of recovery, from a medical and economic standpoint. Everyone is waiting for vaccines and national economic recovery plans, also leveraging the massive support provided by the European Union, called the Next Generation EU.

NextGen EU is a €750 billion temporary exceptional recovery instrument that will allow the Commission to raise funds on the capital market. It will help repair the immediate economic and social damage brought about by the pandemic, reinforcing the multiannual financial framework for 2021–2027. The centerpiece of Next Generation EU is the Recovery and Resilience Facility, with €672.5 billion in loans and grants available to support reforms and investments undertaken by EU countries.

Member States are working on their recovery and resilience plans to access the funds with the aim to mitigate the economic and social impact of the pandemic and make European economies and societies more sustainable, resilient, and better prepared for the challenges and opportunities of the green and digital transitions. To receive support from the Recovery and Resilience Facility, Member states must prepare National Recovery and Resilience Plans, submitting their plans by April 30, 2021, and these reforms and investments should be implemented by 2026.

“IDC expects that a great proportion, between 20% and 35% depending on the country, of the national Recovery and Resilience plans will be spent on ICT by 2025,” says Carla La Croce, senior research analyst, European Customer Insights & Analysis.

While waiting for all countries to finalize their plans, it’s already possible glimpse the key directions national recovery plan reforms and investments will take. IDC analyzed the recovery plans in Europe, understanding how member states allocated their budgets into areas of investments highlighted by the EU. The two areas having a major impact on IT spending must:

  • Support the green transition: At least 37% of resources should contribute to climate actions and environmental sustainability.
  • Foster digital transformation: At least 20% of resources should contribute to the EU’s digital transition.

IDC estimates that National Recovery and Resilience plans will lead to approximately €150 billion worth of European digital investments in the next 5 years.

ICT Investments will move along the key trajectories highlighted by the R&RF: power up, CONNECT, modernize, RENOVATE, RECHARGE AND REFUEL, SCALE UP, and RESKILL AND UPSKILL.

These investment areas fit differently in different industries. For example, the SCALE UP area targets data cloud capacities and sustainable processors, thus feeding a cross-vertical horizon, from manufacturing and professional services to transport and banking. The modernize area, being focused on digitalization and public administration, is more related to the government and healthcare sectors. Meanwhile, the CONNECT area is more focused on investments in the telecommunications industry. CT Bureau


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