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Digital single market under construction

Slovakia still needs to catch up with its EU neighbours in some areas.

People may be encouraged to make more e-purchases. (Source: SME)

EASIER online purchases, more frequent use of digital services or the free movement of data within the European Union – these are just a few examples of the features of the digital single market, one of the main priorities of the European Commission. There are, however, still some obstacles Slovakia needs to remove to fully join the system, experts agree.

Existing online barriers mean citizens miss out on goods and services, while businesses and governments do not fully benefit from digital tools. This should change after the digital single market is created since it will break down barriers for people and businesses, according to the EC plans. Moreover, the EC expects that the market will contribute €415 billion per year to the economy and create hundreds of thousands of new jobs.

“The unification of the European market is in fact about removing barriers and legislative differences between the member states,” Robert Redhammer, rector of the Slovak University of Technology (STU) in Bratislava, told The Slovak Spectator.
Thanks to the changes, new products will access the European market easier and quicker than now, which is important particularly for the internet economy, he added.

Economy will benefit

The digital single market project is based on three pillars: better access to digital goods and services across Europe; creating the right conditions for digital networks and services to flourish; and maximising the growth potential of the digital economy.

To achieve this, the EC will gradually introduce altogether 16 measures through 2016, focusing on cross-border e-commerce rules which both consumers and business can trust, preventing unjustified geo-blocking, making telecom rules fit for purpose, reinforcing trust and security in digital services and in the handling of personal data, building a data economy, or an inclusive e-society.

“Removing the digital market barriers will help not only the European, but also the Slovak economy,” said Dušan Chrenek, head of the EC Representation in Slovakia. 

Since the Slovak market is relatively small, the companies would benefit from expanding to the European market where people would be able to buy goods and services without any obstacles or restrictions, he added.

While the Slovak companies will not face complications when expanding to foreign markets, it is necessary to realise that also the “better prepared foreign companies will have the same opportunities in our market”, Mário Lelovský, president of the IT Association of Slovakia (ITAS), said.

The conditions for developing the information and communication technologies (ICT) sector are good. The internet is used by 76 percent of inhabitants, while 59 percent have at least basic digital skills, which is comparable to the European average, according to the EC data. 

Moreover, people are interested in utilising IT services, according to Chrenek. About 58 percent of Slovaks say they shop online (compared to the European average of 63 percent), while 24 percent say they also use cross-border shopping (compared to the European average of 18 percent).

Chrenek also appreciated the increasing support for startups and the exchange of experiences with the digital agenda within the Visegrad Group (V4) countries.

When creating the digital single market, the country can also offer several examples of IT firms that have entered global markets, particularly in computer security, according to Redhammer.

“But what is the most important are spontaneous initiatives to support business-making that have emerged in Bratislava and some other towns in the past few years,” Redhammer added. 

Hindrances remain

Moreover, about 2.2 percent of Slovaks work in IT and there are also several top IT companies that belong to the fastest-growing firms in the CEE region, said Chrenek.

The demand for employees in the ICT sector is four times higher than the supply, which means there is no unemployment, said Radovan Ďurana of INESS Consult company during the IT Summit held in early October in Bratislava, as reported by the TASR newswire. 

The lack of ICT specialists will, however, negatively impact not only this sector, but also others as many fields, like health care or machinery, are closely related in requirements for IT technologies. Also companies may struggle as they will not be able to secure their digital transformation and use opportunities offered by the digital single market, added Lelovský, as reported by TASR.

Moreover, Slovakia lags behind the European average in covering its territory with modern type of networks, either it is broadband or mobile 4G network which can be accessed by only 25 percent of people (the European average is nearly 60 percent). The country, however, is investing into establishing the optic networks, Chrenek said.

Redhammer also pointed to the administration which accompanies many processes linked with setting up the digital single market.

“When combined with side interests, it may hinder the positive efforts in digital agenda,” he added.

The problem is also low awareness about what advantages the digital single market will bring. Yet this may change as ITAS will start a roadshow in the six biggest cities in Slovakia in early 2016 to explain the opportunities, but also warn of the risks it will bring.
“We will also introduce specific innovation and digital solutions to small and medium-sized companies as possibilities of their co-financing from various funds,” Lelovský said.

Another problem which the Slovak economy faces is the insufficient use of e-government and the electronisation of public administration. Compared with other EU countries, Slovakia placed 20th in the list of progress in developing the digital society, Chrenek said.

Experts criticise digitalisation

Slovakia received a total of €845 million from EU funds allocated for the 2007-2013 programming period, of which 80 percent has already been used. It will also have at its disposal more than €805 million allocated for the 2014-2020 period, according to Chrenek.

“The funds are available; it is necessary to prepare quality projects in both the public and private sector, which will contribute to the effective use of digital market possibilities,” Chrenek added.

IT experts are, however, critical of how the government used the funds for digitalisation. They have launched an initiative Slovensko.digital, on which they call upon the state to be transparent and effective, and change the approach to the informatisation of the Slovak society.

Though Slovakia has spent nearly €900 million, very little has changed and people still need to go to the relevant offices for required information. 

“It is high time for the state to start using modern technology and to use it effectively,” the call’s authors said, as quoted by the Sme daily.

They also state that they are somewhat disappointed with the current status of informatisation and level of availability of electronic services.

The call has already been signed by about 2,000 people, of whom 30 percent are IT experts willing to assist.

“The main point was the approaching termination of the Operation Programme Informatisation of Slovakia (OPIS), and the start of a new programming period within the Operation Programme Integrated Infrastructure (OPII),” programmer Ján Suchal, one of the call’s authors, told Sme. “Now is the best time to talk openly about what is working, what is not working, and how to change it. We can also see some limitations in how the state is working with professionals.”

The Finance Ministry, which oversees the digitalisation, however, said that the state has been cooperating with professionals in preparing the e-government and IT projects.
“From this point of view we can perceive the Slovensko.digital call as ‘knocking on the open door’,” the ministry wrote in its statement, as quoted by the Denník N daily.

The Interior Ministry, which realised 13 projects within OPIS, assumes that “the foundations are quality and solid”, as reported by the daily.

Topic: IT


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