Slovak industrial companies lag behind in digital transformation

The recent poll suggests that digitalisation and automation processes in firms remain at a standstill this year.

Illustrative stock photoIllustrative stock photo (Source: SME)

Industrial companies with Slovak capital have not continued in their transition to Industry 4.0 this year. Compared with last year, they are in the doldrums in both digitalisation and automation, due in large part to the ongoing COVID-19 pandemic.

This stems from a recent survey carried out by the Industry4UM organisation among 57 companies.

“Compared with last year, the survey showed that industrial companies with Slovak capital stagnate in digitalisation and dramatically lag behind in implementing Industry 4.0 firms,” the Industry4UM said, as quoted by the TASR newswire. “They have problems with creating realisation teams and the preparation of implementation strategies.”

Lacking digitalisation and automation is a problem

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Up to two-thirds of respondents said they would handle the coronavirus crisis better if they were digitalised. As much as three-quarters consider the implementation of Industry 4.0 very important, while 62 percent confirmed they would be better off if they were more digitalised and automated.

The number of companies implementing Industry 4.0 processes stagnates at below 40 percent compared to the previous year.

The poll also showed that while 28 percent of firms with foreign capital are implementing the Industry 4.0-related processes, the share of firms with Slovak capital is only 5 percent.

Similar disproportion was revealed in the case of companies with a prepared implementation strategy that should be gradually applied. The total share of such firms is 46 percent, of which 35 percent are firms with foreign capital, and the remaining 9 percent those with Slovak capital, TASR reported.

Firms with foreign capital better off

The results are a strong message for politicians who will decide how money from the EU recovery fund is distributed, according to Emil Fitoš, chair of the IT Association of Slovakia (ITAS).

“Basically, after imposing the measures related to the coronavirus crisis, the Slovak industrial companies need the state to help them with modernisation; otherwise, their position in supply relations might be taken by companies from other countries,” Fitoš said, as quoted by TASR.

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The share of companies creating teams of experts, which is one of the conditions for successful transformation, is quite disturbing, according to Industry4UM. As much as 79 percent of firms with foreign capital have a team working on digital transformation, while the share of companies with Slovak capital is only 27 percent.

“The inability to have vision and prepare an implementation strategy seems to be a crucial problem of small and medium-sized Slovak enterprises,” said Martin Morháč, chair of Industry4UM, as quoted by TASR.

This only widens the gap between companies with Slovak and foreign capital. Until the situation changes, the firms with Slovak capital will lose their competitiveness and the Slovak economy will be more open, and thus harder to be influenced from the inside, he added.

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