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Since liberating themselves from the Soviet yoke in 1989 and subsequently joining the European Union (EU) in 2004, the Visegrad countries (V4), have been increasingly trying to economically catch up with their Western counterparts, making up for the lost decades of progress while behind the Iron curtain.

The now-emerging era of digitalisation, eGovernment, Internet of Things and Industry 4.0 has altogether offered a unique prospect for the V4 countries to take a lead in such innovative technologies and advanced manufacturing.

The tangibility of such an opportunity is largely due to the relative-level playing field among the EU countries, particularly as the progress in the aforementioned revolutionising concepts does not hinge on variables such as the comparative size of an economy.

Nevertheless, assessing the progress made so far, it becomes evident that the V4 are already starting to lag behind some of their EU partners. In fact, according to The Digital Economy and Society Index (DESI) all four countries are well below the EU’s digital performance average.

Should the V4 fail to adapt, implement the necessary innovations or take advantage of this window of opportunity, they are running the risk of remaining in this “catching-up phase” for considerably longer than perhaps initially expected.

Public authorities as well as businesses can achieve some degree of digitalisation independently; however, the success of both will mostly rely upon the regulatory support and legislative changes.

Thus, the national governments in the V4 need to take an active role and facilitate the right conditions to support digitalisation: this can be done by taking a more centralised approach, focusing on high-speed and reliable network infrastructure development and bolstering domestic initiatives which reflect the Visegrad region’s needs.

Governmental hurdles

One of the major obstacles to accelerating digitalisation in V4 countries emanates from the considerable de-centralisation and fragmentation among government entities. Subsequently, these agencies end up acting independently and adopting separate policies, and as a result, public services are mostly delivered autonomously and differently depending on the various level of government.

In the Czech Republic, the agenda of eGovernment is under the Ministry of the Interior and electronic communications fall under the competence of Ministry of Industry and Trade, while various local initiatives are scattered among other ministries and governmental bodies. This ultimately renders the communication between the citizens and the state ineffective.

Unfortunately, the situation is often quite similar in the remaining V4 countries. For instance, in Hungary the responsibilities for IT infrastructure and eGovernment are similarly split between the Ministry of the Interior and the Ministry of National Development while the coordination efforts are mostly led by the Prime Minister’s Office.

Nonetheless, the lack of progress in digitalisation and eGovernance cannot be by ascribed solely to the convoluted, internally efforts as each V4 country also faces numerous specific obstacles. To illustrate this problem consider Poland, which concentrates all digitalisation efforts within its Ministry of Digital Affairs, yet it still remains the least digitalised country within the V4

The cost and payoff

One of such challenges common to the V4 region is the development of sufficient digital infrastructure. Given its complexity and potentially significant capital expenditures on infrastructure (etc.), to some it may seem as secondary, commodity-like or of low importance.

On the contrary, the deployment of digital services is wholly beneficial to a country’s infrastructure. As such infrastructure is at the very core of digital transformation and is needed for it to be successful.

In fact, new concepts such as Industry 4.0 are directly dependent on high-speed and reliable connectivity. Should V4 countries aim to attract future investors in the field of advanced manufacturing and preserve their competitiveness on the market, such infrastructure will be of paramount importance.

This is exacerbated further by the fact that the V4 countries are, from a labour perspective, highly dependent on its industrial sector.

In fact, in 2017, the employment in industry as the percentage of total employment in the V4 ranged from 30% (in Hungary) up to 38% (in the Czech Republic). Hence, failing to provide industry with sufficient and competitive infrastructure could have detrimental ramifications for the labour market as the industry’s competitiveness would inevitably begin to decrease over time.

The fact that Hungary, Poland and Slovakia are all well below the EU average in connectivity is highly alarming. Nonetheless, even the Czech Republic, the highest performing V4 country in this segment, is not short of problems which are rampant throughout the entire region.

One such problem is the emerging divide between the urban and rural areas. While major V4 capitals and cities have an adequate coverage with high-speed Internet, rural areas are left with their infrastructure in dire need. Therefore, not only developing high connectivity but also developing it evenly is and will be one of the major challenges in the upcoming years.

The need to lead, not follow

Besides the aforementioned issues, one of the key reasons why the V4 continuously stays behind their EU counterparts stems largely from their own passivity. If there is an intrinsic characteristic of V4 efforts in eGovernment and digitalisation, it is a lack of implementation of domestic initiatives for innovative strategies that would take into consideration local needs and demands.

Looking more closely into what type of eGovernment legal framework has been generally passed and pursued, as provided by the National Interoperability Framework Observatory, it becomes evident that one of the major drivers for digitalisation in the V4 has been the European Union. In other words, the key vehicle for further progress in digitalisation has been epitomised by external, rather than internal, efforts.

Here lies one of the key predicaments for the Visegrad countries. Provided that V4 digitalisation and eGovernment efforts continue to follow the trajectory laid out by EU directives, then by default the V4 countries will be at best on par with the rest of EU.

Yet, oftentimes it is not the lack of ideas which is missing. In fact, Central European countries have never been short of ambitious proposals, plans and ideas as numerous publications or declarations such as, The V4 Contribution on Digital Single Market or Visegrad Group joint declaration from 2017 on mutual co-operation in innovation and digital affairs clearly show otherwise.

Simplified, the problem can be characterised by a reluctance to implement them or set up a concrete action plan following such declarations. Until such a gap is overcome, we will hardly see any meaningful progress on this frontier.

Finally, digitalisation offers the V4 multiple opportunities of how to advance their economies and narrow the still existent gap between the East-West divide by stimulating investments and innovations in the region.

Until now, the digitalisation in the V4 has been given relatively little attention and limited effort. Consequently, given the current pace of reforms it is unlikely that the potential benefits stemming from eGovernance and digitalisation could materialise in time to give V4 countries a competitive edge. Striving to establish a clear government structure responsible for digitalisation, developing country-wide infrastructure and connectivity and introducing domestic initiatives instead of merely following the trajectory of EU directives will all be essential if all Visegrad countries want to be successful in the digitalisation-driven era.


Autor(en)/Author(s): Michal Bokša & Matouš Janda

Quelle/Source: Visegrad Insight, 27.09.2018

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