Eurofound and Cedefop have published a joint report examining how small and medium-sized enterprises across Europe are adapting to digital transformation. The study, SME digitalisation in the EU: Trends, policies and impacts (2025), offers an overview of current developments and identifies the main barriers that companies continue to face.

The report notes that the average level of basic digital intensity among SMEs in the EU is 73 percent. Only a small number of countries have reached the Digital Decade target of 90 percent. There are substantial differences between Member States, with northern and western regions generally displaying higher adoption rates.

Digitalisation in many SMEs is shaped by immediate pressures such as labour shortages or the need to recover from recent disruptions, rather than by long-term strategic planning. The analysis highlights gaps in investment, skills availability and technological readiness. It also identifies three groups of SMEs based on digital intensity, each facing different challenges relating to job design, autonomy and training.

National and EU initiatives are helping firms to accelerate their digital transformation. Many countries are using Recovery and Resilience Facility resources to invest in digital infrastructure, training and modernisation programmes. Incentives such as vouchers, advisory schemes and partnerships with technology providers have proven useful in helping SMEs start or deepen their digital journey.

The report suggests that governments should set clear and measurable targets for SME digitalisation, support innovation through cooperation across industrial ecosystems and expand modular training initiatives to reduce the persistent digital skills gap.

Given the strong presence of SMEs in the European TCLF sector, the study offers insights that are directly relevant for companies across the value chain. Digital tools can help firms improve supply chain transparency, reduce production times and expand market access.

The observed gaps in skills and investment underline the need for targeted support that helps SMEs strengthen their digital capabilities while preparing for wider green and digital transitions.

The publication is available on the Eurofound website:
https://www.eurofound.europa.eu/en/publications/all/sme-digitalisation-eu-trends-policies-and-impacts