While Hungary has made great progress in terms of 5G coverage and availability of digital public services and above the EU average in terms of coverage of Gigabit home internet connections or the online accessibility of health data, there is still much left to do.
The country continues to lag behind in a number of areas, essential to the competitive economy – like the digital skills of the general public, or the digital maturity of businesses, and especially SMEs. According to the Digital Decade report 2023, the first edition of the new development index replacing the Commission’s Digital Skills Economy and Society Index (DESI), Hungary needs to step up its efforts in all 4 priority areas of EU digital policy.
Digital Decade 2023: taking stock of the digital state-of-play in Europe
It is a tradition for the European Commission to publish a report on the digital performance of the EU and its Member States each year. This year’s Digital Decade report replaces the previously used DESI index, summarises the state of play of each EU country, and makes suggestions for improvements.
The report comes 2 years after the European Commission announced the Digital Decade policy programme, together with the Digital Compass – a way to track progress according to key targets, including skills, and overcome significant digital backlog. Despite these ambitions, the first Digital Decade report contains few positive results for Europe and Hungary.
Digitalisation as central to European competitiveness on a global scale
Achieving the targets set in the Digital Decade Policy Programme 2030 is also of the utmost importance in terms of generating an economic value of EUR 2800 billion, which represents 21% of today’s economic output. Overall, the first report considers that the Union has moved towards the objectives set, but calls for further collaborative efforts to make Europe truly competitive in the area of digitalisation by the end of the decade. Balázs Vinnai, President of the Hungarian IVSZ (Association of the Digital Economy), commented on the 2023 edition of the EU Digital Decade Report:
“The Digital Decade report did not cause any surprise. While it is difficult to compare the results with previous DESI numbers, it is clear that the stakes are just as high as in previous years. The development of digital skills and digital education needs to be accelerated – not only for children in school, but also for adults of all ages. On the other hand, we need regulators and incentives to gently push small and medium-sized enterprises towards digitalisation, otherwise we lose competitiveness due to low productivity efficiency”.
Some progress in 5G and overall digital infrastructure, further efforts needed to digitalise SMEs
This is not the first time the Commission has published country-specific reports: but the new, country-focused Digital Decade report brings much needed insight. In Hungary’s case, the authors of the report acknowledge that the country has advanced its overall digital transformation – but untapped digital potential remains an obstacle.
The most significant progress nation-wide in 2022 was the fixed very high capacity network and expanding 5G coverage. At the same time, there is room for progress in making full use of the opportunities offered by the digital infrastructure in place, as well as improving the digital capabilities of the population. Hungary lags behind its EU counterparts when it comes to the digitalisation of SMEs.
The report highlights that on 30 November 2022, the Hungarian government adopted its new National Digitalisation Strategy, which is fully in line with the European Digital Decade Policy Programme. It also notes that Hungary, in cooperation with other Member States, is exploring the possibility of establishing a European Digital Infrastructure Consortium (EDIC) within the Language Technology Alliance to develop a common infrastructure for natural language processing and large-scale multilingual models.
Hungary in the Digital Decade
The European Digital Compass sets targets across 4 main axes, identified as key to the digital performance of the continent: digital skills, digital infrastructure, digitalisation of businesses and digitalisation of public services.
Digital skills – the share of ICT professionals has gone up, but still ranks below the EU average
In terms of digital skills, Hungary continues to perform below the EU average. Just half of the adult population have basic digital skills – significantly below the EU average and very far from reaching the 80% target by 2030. The share of ICT specialists in total employment has slightly increased, but the result of 4.1 % is still below the EU average of 4.6 %. The proportion of women among ICT specialists is among the lowest in the EU at 13.6 %. The EU proposes that Hungary should do more to develop digital skills, in particular to strengthen the digital competence of teachers and to involve more adults in digital training.
Digital infrastructure: Hungary a pioneer in 5G
Broadband connectivity is above the EU average and in 5G Hungary has made significant progress towards the 2030 digital connectivity targets. In 2022, 5G coverage in Hungary increased to 58%, an increase of 40% compared to the previous year. Hungary’s ambitious plans include the inclusion of a quantum calculation module in a future High Performance Computing (HPC) system and the creation of a ‘national quantum laboratory’. Despite the progress made, the report suggests that Hungary should be further strengthened in the deployment of digital infrastructure, and more efforts should be placed on expanding 5G too. It should also be active in semiconductors and quantum to help the EU become a strong market player in these areas.
Digitalisation of businesses remains a challenge for Hungary
The digitalisation of businesses remains one of the biggest challenges for Hungary. Most businesses, and especially SMEs, are not yet making full use of the potential of digital technologies. This has a negative impact on competitiveness: in 2022, only 52% of SMEs in Hungary had at least basic digital skills – significantly below the EU average of 69%. The use of advanced digital technologies such as big data and artificial intelligence was less than half of the EU average. As a suggested improvement, the Commission proposes that Hungary should introduce additional incentives for the digital development of businesses, in particular skills, to accelerate the digital transition.
Digitalisation of public services
Hungary has made gradual progress in the digitalisation of public services, but still performs below the EU average in this regard, except for the availability of health data. Many advanced digital services in the public sector still need to be introduced in Hungary. Electronic identification (eID), cross-border e-identification, is expected to be available through eIDAS in 2023. The report is clear: Hungary needs to accelerate its efforts to digitalise public services.
Background info: the 2030 Digital Compass guides the Digital Decade
The Digital Compass sets targets to bring the EU Digital Decade policy to life. By 2030, huge digital skills action must be taken and digital illiteracy must be eradicated. Accordingly, by the end of the decade, 80% of the adult population should have basic digital skills and 20 million ICT specialists – and an increasing number of female IT specialists – should be employed in Europe.
Significant progress also needs to be made in digital infrastructure, with all EU households having gigabit connectivity in this decade and all populated areas should be covered by 5G. In addition, the production of semiconductors in Europe needs to be created and a 20 % share of the world market. The digitalisation of businesses is also a key issue: by 2030, 3 out of 4 companies should use cloud computing services, large-scale data and artificial intelligence. This is particularly important for Hungary and the region: more than 90% of SMEs should have at least a basic level of digital development. To digitalise public services, Hungary should make all key public services available online by 2030, with a focus on health-related services. By 2030, all Hungarian citizens should also have an electronic identity card.
Image credit: IVSZ
Source: European Digital Skills & Jobs Platform
