Digital transformation is proceeding slowly in many countries of the European Union. Available digital technologies are not implemented and used to improve processes in public administration, in health or in many companies.
This deficit has become particularly apparent with the Covid-19 crisis. For example, in the supposedly high-tech country of Germany, the federal administration and health system were often unable to adequately follow infection chains due to substandard, outdated equipment, which does not guarantee a quick quarantine.
The EU’s National Recovery and Resilience Plans (PRNR) aim to significantly improve this situation, through massive financial incentives in the Member States. A minimum of 20% of the total of just under € 724 billion available in the Recovery and Resilience Mechanism is dedicated to promoting digital transformation. Digital finance has three pillars: modernizing public administration, expanding digital infrastructure, and education and training to support digital skills.
This plan will undoubtedly accelerate digitization in the EU. It will especially benefit the countries most affected by the pandemic with limited investment resources. But NRRPs can also enhance digitization in some of the most technologically advanced countries in Western and Northern Europe.
“General purpose technologies”
However, the question is to what extent past deficits can actually be covered with this financial injection. There is a risk that even if new technologies are invested, the goal of increasing social resilience will only be achieved in a suboptimal way. The mere introduction of digital technologies alone does not automatically lead to the desired structural change in institutions, organizations or companies.
In fact, digital technologies are “general purpose technologies”. They can be flexibly integrated into existing institutional and organizational structures and do not themselves create greater pressure for change. Research in the corporate sector, for example, has shown that the introduction of digital technologies is characterized by a high degree of reluctance in many companies and that fundamental structural changes are rarely made. Similar situations, even more pronounced, can be found in the bureaucratized and established areas of the state administration.
The reasons for this hesitation are obvious and, at first glance, highly rational: With this approach, decision makers avoid the costs and risks of large-scale digital innovation. Above all, they avoid conflicts of interest with employees who are likely to be affected by the change process.
However, on closer inspection, it means there is only a limited increase in efficiency and suboptimal structures stabilize. In short, existing organizational deficits, well-established routines, and excessively bureaucratic regulations cannot be eliminated by the mere introduction of digital systems.
Far from being enough
“Normal” seizure-free situations can usually be handled with routines this tired and partially digitally supported. In the context of the pandemic, however, and with the goal of a recovery that marks a new “normalcy”, it is clear that gradual and cautious innovation measures are far from sufficient.
This is clearly demonstrated by analyzes of government measures that are often not only inadequate, but even unfortunate and ineffective in dealing with the Covid-19 crisis in Germany. The mere digitization of established processes may not only fail to improve resilience, but also maintain inertia.
It may be fine for a while. But given the future challenges to the ability of companies and states to act, digitized “business as usual” is extremely risky. This is especially true for the next climate crisis, but also for the forecast of new pandemics.
A situation threatens to emerge that, according to British sociologist Anthony Giddens, can be described as the “Giddens paradox”: the willingness to take effective measures to increase resilience will only emerge when the pressure to act is inevitably high. embargo. The impending crises are not really taken into account for a long time and well-marked paths and routines continue to be followed. When action is taken, it is too late, because the crisis can no longer be controlled, much less avoided.
How to avoid this risk and use PRNR funding to create structures with high resilience and social capacity for action, effective in the long term? Research and practical experience indicate that a successful digitization push must by no means focus solely on technology, but must also systematically take into account societal conditions for innovation. There is a close link between the efficiency potential of new technologies, on the one hand, and their institutional, organizational and personal anchoring, on the other.
However, we often forget that effective use of digital technologies always requires innovation in their institutional and organizational settings. As early as 2014, Erik Brynjolfsson and Andrew McAfee, world leading figures in digitization and artificial intelligence, strongly underscored the essential nature of “complementary innovations” in The Second Machine Age, a bestseller.
The Recovery and Resilience Mechanism addresses this, at least indirectly, by funding education and training to support digital skills. This would address the personal side of digitization, but a broader perspective on the social preconditions for the successful implementation and use of digital technologies is lacking. In terms of a compelling political agenda, it would have been appropriate to identify “social innovation” as an essential axis to complement the introduction of digital technologies.
In other words, it can’t just be the introduction of new technologies. Digitization, whatever its purpose, affects the interdependencies between technology, people and the organization as a whole. Therefore, the general “socio-technical system” should be explored. The key to this approach is the formula of joint optimization: the desired objectives can only be achieved if the social and technological elements of the general socio-technical system are coordinated with each other.
Only Member States can adopt a systematic socio-technical perspective for truly crisis-resistant digitization: each of them has specific social conditions. These particularities require special consideration in each case through appropriate national implementation strategies.
For example, one of the goals of the German recovery plan is to strengthen social participation in the digitization process. This is certainly the tradition of the German business co-determination system, which can be seen as a positive example for other areas of society.
The specific challenges of the different Member States are also clearly illustrated by the continuing pause affecting the NHRPs presented by Hungary and Poland. This shows in extremis that introducing digital technologies without simultaneously addressing societal challenges makes little sense.