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Measuring the economic impact of cloud computing in Europe

The study highlights the economic benefits of cloud computing uptake and free flow of data within the European Union. The study shows that a Wider adoption of cloud services could add cumulative total revenue of EUR 449 billion to the EU28 GDP with significant impact on employment and business creation. Implementation of security certification and removal of data localisation requirements could increase benefits by EUR 19 billion between 2015 and 2020 (study reference: SMART 2014/0031).

The EU supported study "Measuring the economic impact of cloud computing in Europe" summarises several analyses of the cloud computing in Europe and provides a projection of the development in cloud services. It also includes a baseline scenario without any further policy measures to support the growth of cloud services in Europe.

Several barriers to cloud computing have been identified by stakeholders: data localisation requirements, security of data and data protection. Data localisation requirements have been identified as having a high impact on cloud adoption as they limit the choice of available offers for users, which may be prevented from adopting cloud computing services due to their costs (as the most economically efficient offer may not be available). Also, providers may face higher costs for providing cloud computing services, as they may be forced to establish in locations with higher production costs.

Despite the barriers to wider adoption, cloud computing is a crucial driver for growth in the EU.

It is estimated that over the next five years, cloud computing could add a cumulative total revenue of EUR 449 billion to the EU28 GDP (including in the public sector). This will have a positive impact on job creation and employment: 1.6 million jobs could be created between 2008 and 2020. Also, it is expected that 303 000 new businesses, in particular SMEs, could be created between 2015 and 2020 through the development and deployment of cloud computing.

The study also provides an assessment of the likely impacts of cloud computing in Europe for three different groups of stakeholders: professional users; providers and society as a whole. It analyses the costs and benefits for both the baseline scenario for cloud computing, as well as the policy measures that could support adoption of cloud services in Europe. The policy measures proposed are the removal of data localisation restrictions and the promotion of existing relevant certifications and standards.

The study estimated the additional net benefit between 2015 and 2020 if both policy measures would be implemented :  for professional users EUR 14 billion mainly due to additional users’ uptake, the lower price and reinvestment in cloud services), EUR 3.8 billion for providers of cloud computing services, and EUR 1.8 billion for society as a whole (mainly due to higher tax revenues and savings on environmental costs).

Overall, despite the current barriers to adoption, cloud computing is a growing market and a crucial driver for economic growth in Europe.  Policy initiatives aiming at promoting existing relevant certifications and standards and at removing data location restrictions will support such growth, increasing benefits for users and providers of cloud computing, as well as for society as a whole to a total of over EUR 19 billion between 2015 and 2020 (3.25% increase in NPV (Net Present Value) compared to the baseline scenario).

The European Commission has taken account of the findings of this study in preparing its analysis and policy orientations on the subject of data localisation restrictions in the Communication on Building a European Data Economy. 

The study was conducted by Deloitte from December 2014 to April 2016.