The opportunity is here; Central and Eastern Europe must seize it. The Russo-Ukrainian war is an absolute horror, but it also offers CEE countries a chance to catch up with the western part of the continent. The regional countries must join forces and strengthen their digital links to put the region on the world stage. Conference coverage from the Digitalization Panel of the Three Seas Business Forum.
One participant summarized the key points very well in the Three Seas Initiative’s (TSI) forum in Riga: it is crucial now that Central and Eastern European countries should not become the victims of their own success. They must not get complacent and should keep reforming, innovating, and empowering local entrepreneurs who can eventually become the digital champions of Europe or maybe even the whole world.
Mark Boris Andrijanič, former Slovenian Minister for Digitalization and moderator of the panel, started the discussion by saying that in the last few years, the TSI countries have given the world more than 35 unicorn companies, with a total startup value of more than €250 billion. This is something to be proud of. In some areas, the region is even among the world leaders, but in many fields, it still lags behind the West. These topics and issues were addressed by the panelists: Mr. Karan Bhatia, Global Head of Government Affairs & Public Policy at Google (U.S.), Ms. Renāte Strazdiņa, Digital Advisory Lead CEE, and Healthcare and Life Science Lead Customer Transformation EMEA at Microsoft (Latvia), Mr. John Tully, CEO of MikroTik and President of AmCham Latvia (Latvia), Mr. Üllar Jaaksoo, founder and partner of Digital Nation Ltd. and founder of Greenergy Data Centers (Estonia), Mr. Linas Dičpetris, CESA Government, Public Sector and Infrastructure Market Leader at EY, and Mr. Michał Kanownik, President of the Management Board of the Digital Poland Association (Poland).
The Russo-Ukrainian war was a turning point for the technology industry. Bhatia thinks that the current global crisis caused by the war unprecedentedly galvanized the sector. The flagship of the digital war against Russia is the fight against disinformation, which means blocking Russian state media and advertising from most platforms, and disseminating credible information regarding, for instance, refugees and air strikes. Google, for example, has developed a new app that notifies users about air strikes early in the morning.
Bhatia believes that the present is also an opportunity for the TSI countries to build a high level of integration and boost growth in the region. He quoted an old saying: „let’s not let the crisis go to waste.”
According to Strazdiņa, Ukraine was the second most threatened country already before the war broke out. She said they have been working with the Ukrainian government for a long period, and their cybersecurity team has recently conducted more than 150 missions. Microsoft’s expert added that since the Ukrainian parliament could change the law on cloud usage, 16 out of 17 Ukrainian ministries were able to move to a secure cloud location.
The Polish panelist believes that the first month of the war was an enormous test for the Polish government and society to figure out what to do with their “guests.” Kanownik used the word „guest” because Poles refer to those who fled the war as guests, not refugees. During the first weeks of the war, the guests got smartphones, chargers, power banks, and laptops to keep in touch with their family members who stayed in Ukraine.
Kanownik thinks that one of the most significant contributions was that Polish industrial players backed up the data of hundreds of Ukrainian SMEs and public institutions to the cloud for free. After the war, he added, this cooperation between Ukrainian companies and Polish and other European industry players should be maintained and further developed.
The TSI countries are a diverse group, and their situation is often very different in competitiveness, level of development, or demographics. Regarding 5G coverage, there are denser urban areas where it is easier to deploy 5G networks, but some countries have a high share of rural areas, where it is much harder, though not impossible, to improve connectivity and build networks for newer technologies. According to Dičpetris, the first step is to assess where the countries are and then start improving from there. Some states in the region are doing quite well in this field, such as Hungary, Malta, and Cyprus.
According to an EY study, the most significant medium-term potential of 5G lies in manufacturing and the following areas of application: smart cities, entertainment, education, and healthcare. Those countries have been successful in these areas, where municipal, regional, and local communities have engaged and collaborated with the government and the private sector. In a sense, they have to pressure the government to take action to deliver the results. This sounds great, especially regarding satellite internet, which can virtually make miracles in Ukraine. Slovenia and Germany are now seriously considering subsidizing this technology for households in remote rural areas. Dičpetris believes this step could be a good model for other countries, at least until they can build a network for broadband internet in a few years.
Jaaksoo raised the problem that the region is spending a lot of time and money on long-term integration projects instead of focusing on common standards and regulations. There is a software called X-Road, which allows all users to remain the owner of their database and technology, but still makes it very easy to share data with everyone the user wants. Jaaksoo is convinced that this practice could boost regional cooperation on IT tools.
Tully, CEO of MikroTik, highlighted the importance of big data in the 21st century, especially regarding its application in biology and medical science, often coupled with artificial intelligence. The TSI countries have a long and distinguished history in engineering; just think of their results in the mathematical competitions and Olympiads during Soviet times.
Despite their prosperous past and outstanding talents, the TSI countries’ plight is much less positive now. Half of the region’s adult population lacks even basic digital skills. Andrijanič deems that this is unacceptable and must be immediately addressed.
According to Google’s Global Head of Government Affairs & Public Policy, sustainable growth is impossible without inclusive growth. He stressed that the goal is to achieve that everyone can enjoy the advantages of the digital revolution. Bhatia also believes that an efficient regulatory framework and government support which facilitates and encourages digital investments and growth is inevitable.
Nonetheless, Bhatia continued, there is an even more crucial aspect: people’s digital literacy and competence. He said that at Google, they launched a program called Grow with Google in response to this issue: they are currently training more than 70 million people worldwide. Two million people have been trained in Central and Eastern Europe between 2015 and 2021, half of them last year. The program has a very diverse audience, from students to senior business managers and SMEs. Digital skills are essential to all of them.
Strazdiņa replied that Microsoft also continues its efforts to improve people’s digital skills, including cybersecurity skills. They recently launched a program in Poland, primarily involving Ukrainian refugee women. They plan to significantly extend this program to the whole region since cybersecurity skills will be even more essential in the future. Everyone should know how to protect themselves, their family, their business, and their country.
It is no coincidence that education is one of the top three points of most governments’ agendas. Dičpetris believes that the question is not political will but implementation capacity. He added that the TSI countries are unfortunately not among the global pioneers in this field.
Governments, universities, and school systems face enormous challenges right now as we are at the moment of digital transformation in education. This means that governments must significantly reform policies regarding all educational stages.
The regional pioneers in education system reforms are Croatia, Estonia, and Poland. Robotics, computer programming, artificial intelligence, and even cybersecurity skills have been introduced to pupils’ core curriculum as these countries acknowledged that adequate and relevant education at an early age is crucial to overcoming the talent shortage.
Kanownik presented their research on the cybersecurity literacy of Polish youth: their conclusion is that it is promisingly high. On the other hand, this is not the case for SMEs, where many still do not understand that the money spent on cybersecurity is not a cost but an investment. Unfortunately, many leaders of small or medium-sized businesses still believe cybersecurity costs are necessary, expensive expenditures that get nothing back. Thus, governments must develop specific policies and programs to encourage spending on cybersecurity, for example, in the form of tax incentives.
Sometimes leaders believe that if they have one digital expert, then they are already safe; it is especially true for many SMEs. However, of course, this is not the case. Employing digital experts is just an addition to cybersecurity, and unfortunately, there is a significant shortage of these specialists.
According to Andrijanič, the Russo-Ukrainian war proved that in cybersecurity, no country or region can alone solve the problems. Bhatia agreed with the former Slovenian minister and stressed that there are immense challenges in the field where the only solution is strong transatlantic cooperation.
The moderator concluded the panel with the optimistic and forward-looking words of one of his friends: “let’s keep working together, dear friends; let’s keep innovating, let’s keep learning, and as Steve Jobs would say, let’s stay hungry and foolish.”
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