THE DIGITALISATION – ROMANIA’S POSSIBLE ECONOMIC GROWTH VECTOR / ENERGYNOMICS.RO


23.12.2018
It is well known that the evolution of digital technologies, in combination with other key generic technologies, leads to a change in the way we design, produce and market related products and services, and the way in which their value is generated. Technological advances – such as the Internet of Things (IoT), 5G technology, cloud computing, data analysis and robotics – transform products, processes and business models from all sectors, ultimately creating new industrial patterns as chains global values are changing.

The challenge that Europe will have to face is the prompt and full exploitation of these digital opportunities. This is essential to ensure Europe’s medium and long-term competitiveness, which will have implications on the overall well-being. This desideratum is all the more important for our country and for the Central and South-Eastern Europe.

Achieving the digital single market from the perspective of the European Union’s decision-makers is an indispensable condition for attracting investment in digital innovation and ensuring faster economic growth in the digital economy sector.

The Digital Single Market Strategy is already an integral part of the EU Digital Europe project. Romania also has a digital agenda specific to the problems that local and regional issues have to address, recently exposed within the Summit and within the Three Seas Initiative held in Bucharest. In the context of digital innovation plans and Europe’s ambitions to become a global digital leader in the years to come, Romania can and must become an active voice in this area, both at national, regional and European level.

In the context in which economic forecasts indicate a stagnation of Romania’s economic growth potential, the digital segment has the necessary ingredients to become the next engine of economic growth for both our country, as well as for the region. For the entire region, the benefits of digitization outweigh the risks involved, with the stake being additional revenue of € 200 billion for domestic gross domestic products. This opportunity can generate a substantial increase in global economic competitiveness and a significant increase in the population welfare of the 10 states in the region.

IT industry representatives have said that the 2018 sector’s turnover may exceed the € 4.5 billion threshold. They also often say they need a stable and predictable framework for this market to grow.

In 2017, exports of software and IT services amounted to € 3.02 billion, representing more than 75% of the total IT sector, with an increase of up to 14% in comparison to the previous year. Internal revenue increased by € 20 million (+ 2.1%), from € 955 million in 2016 to € 975 million in 2017.

We think in a constructive manner and we transform challenges into opportunities

The US Atlantic Council has initiated and is launching the study “Rise of the Digital Challenge: Digitization as the next growth engine for Central and Eastern Europe”. The document aims to contribute to the awareness of the opportunities for sustainable economic development offered to Romania by the Digital Revolution. The project started from an expanded study conducted by McKinsey & Co Consultancy Company, which highlights the extraordinary growth potential of this European bloc in the coming years. The study will be launched through a series of events in the capitals of the ten Central and Eastern European countries included in the study, with the launch in Romania taking place on December 13th. The event will feature a first debate on ingredients and solutions that can facilitate leadership in digitization starting from the report.

The document states that Central and Eastern Europe (Bulgaria, Croatia, the Czech Republic, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia) recorded a 114% GDP growth between 1996 and 2017, in comparison with 27% (EU “Big 5”: France, Germany, Italy, Spain and the United Kingdom). Together, the countries included in the Digital Challengers group account for € 1.4 billion in terms of GDP, making them the equivalent of the twelfth economy in the world. Central and Eastern European countries have high levels of market openness and similar levels of digitization, in addition to their cultural and historical characteristics.

An economy based on digital and technical technology could give the necessary momentum that the region urgently needs. These ten countries can now be seen as “digital challengers”, to whom is presented an excellent opportunity to join the “digital front runners” – the nine north European states that are European leaders in digitization.

Digitalisation in Energy

The digitization in the energy sector is happening and represents at the same time the next industrial revolution in this field, with benefits for all parties involved. This should be understood as the process of connecting through digital communications, collecting and communicating data and analysing them to improve operations and processes, all of which have the role of transforming the economy into an intelligent one in line with European trends.

In the various economic sectors, including the energy sector, the adoption of digital technologies has beneficial effects in terms of cost reduction, improved transparency, increased efficiency and quality of life for the end consumer. Thus, the quality of service is improved, their control increases and costs are lowered.

Romania is in a favourable position to take advantage of the digitization of the energy sector. The IT field accounts for 6% of GDP and is steadily increasing. Thus, Romania can use its competitive advantage, becoming a leader in the field of digital energy services, generating economic growth and quality jobs across the value chain: software equipment, electric vehicles, batteries, machines and services. In the context of the Romanian Presidency of the EU Council of 2019, Romania has the chance to promote digitization as a vector of economic growth and job creation.

23.12.2018 · ROMANIA