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In the Digital Economy and Society Index, Poland ranks low. But this wouldn't be the Spotlight series if we wouldn't dig deeper to find the strengths and weaknesses on Poland's way to digital transformation.
Content:
The Digital Economy and Society Index ranks European countries based on different criteria that are markers for their digital readiness. The report for Poland can be downloaded here. For this article, I will also take a look at other study results to take detailed look into certain topics.
The Strengths: Fast growth and many education initiatives
According to the report, Poland's score has been growing at a slightly faster rate than the EU average which indicates that the country is catching up and has the potential to reach other countries' levels soon.
Education programs are growing
There are multiple programs in place to increase the education of teachers, offer remote education and overall fund efforts of teachers and pupils to purchase technical equipment and therefore strengthen the digital know-how. These programs are not only aimed at children but also cover Academies and other initiatives to motivate the public to learn about digital technologies and even consider a career in ICT.
By the way, there are slight indications on social media, that Poland is growing as an attractive country for so-called "digital nomads", ICT professionals who prefer flexible work models and might work for companies placed outside Poland but still can increase the overall employee landscape and attractiveness of the country.
Potential for infrastructure development
The country has a slightly higher take-up of 100Mbps fixed broadband (aka fast internet) and the costs for broadband are much lower than in the rest of the EU. Even though most of Poland's stats are below EU average, they are mostly marginal. Given the fast growth rate of the countries' digitalization, Poland might be able to surpass the EU average in quite a few areas. For example, from 2020 to 2021, Poland managed to increase its 5G coverage from 10% to 34%.
Exceptional with open data
As with all countries, the provided public services have their highs and lows. Poland's services are a lot higher than the average when it comes to both pre-filled forms and the use of open data. The latter is specifically important given that data transparency is necessary to create trust in digital services and to grow other public services. The report says that more than 15 million citizens have already used at least one of the provided e-ID profiles. Additionally, the use of the authentication service "Trusted Profile" increased by 12% from 2020 to 2021 and by 300% from 2019 to 2020.
Large enterprises act as digital ambassadors
Even though Poland scores below the EU average in all categories that cover the digitalization of its economy, it's important to point out that especially large companies (250+ employees) have a much higher use of digital technologies. According to a research report by Jan Hagemejer and Karolina Zubel from 2020 (PDF), 60% hire ICT staff, almost all of them have a website, and. perform administrative processes digitally.
The Weaknesses: Lacking enthusiasm for digital possibilities
Poland needs more ICT skills
When it comes to human capital, Poland ranks below the EU average in all categories, ranging from basic digital skills in the public to the percentage of available ICT specialists. Given the general shortage of skilled personnel that even countries with a high ranking have, Poland needs to make sure to update its education systems and find incentives to motivate people to take up ICT careers. Many countries that rank comparatively low in the DESI index, have put a big focus on supporting ICT education especially for women. However, Poland has 3% less female ICT employees than the EU average (16% vs. 19%). However, given the many initiatives and fundings in place, these numbers might change in the next years.
Rural infrastructure (adoption) needs to grow
Poland's infrastructure is solid but lacks in fast broadband coverage as well as fixed broadband take-up, meaning that fast broadband is rare (78% vs. 90% EU-wide) and fewer citizens are actually connected to the internet than the EU-average (69% vs. 78%). The report mentions that the fact that almost 40% of all people live in rural areas might explain the relatively low numbers since internet usage is almost always higher in urban areas and the development and maintenance of telecommunications infrastructure is much more expensive and difficult in rural areas.
Polish businesses struggle with digital adoption
It is necessary to be honest when it comes to the digital degree of the Polish economy. Poland ranks below the EU average in all 11 categories. Mostly only a few points but especially the basic level of digital intensity in small and medium sized enterprises (SMEs), the use of social media, cloud, AI, e-invoices and eCommerce turnover is troubling.
It's also concerning that only 18% of enterprises provide ICT training (EU average: 20%) given that their own digital readiness is closely tied to the internal know-how and resources.
One of the reasons might stem from the fact that according to Hagemejer and Zubel, 99% of all Polish firms are small and medium sized and therefore might lack the budget and resources to invest in training and technology implementation. Especially micro enterprises which make up one fourth of all companies in Poland, don't use digital technologies and therefore impact the overall statistics. Only 5% of SMEs sell their products or services in foreign markets (and only 14% do so locally).
Given the speed of the digital transformation, it's better to invest now to stay competitive. Even local businesses will face an increasing international competition that is able to cover the entire customer journey digitally.
But according to the report, (which is from 2018, so these numbers might have changed in the last four years), even larger enterprises (250+ employees) don't really use cloud services (40%), social media (ca. 50%) or make use of their website for eCommerce (10%).
The question is, why even larger companies don't see the need - or don't have the means? - to expand their business by digitalizing not only their systems and processes but also their services.
Digital services for citizens and companies are below EU average
Poland's public services are a rollercoaster with amazing scores in regard to open data and pre-filled forms but rather sobering numbers in the areas of usage and digital services for both citizens and businesses. Only 55% of citizens use e-Government, compared to 65% EU-wide. Even worse, Poland offers a lot less services for citizens (scored 57 vs. 75 EU-wide) and enterprises (scored 70 vs. 82 EU-wide).
In my personal opinion of the general public acceptance of digital technology, the more attractive and diverse digital services are offered, the more people are willing to use them and learn about them. The aforementioned lighthouse projects of the e-ID profiles as well as the "Trusted Profiles" could indicate that the DESI report for 2023 will have very different results.
Poland needs more incentives to increase digital adoption
It almost seems as if Poland is caught in a devil's circle - the public and enterprises don't use enough digital technologies and services but also are not offered enough attractive options, therefore the interest in more digital education and training is low, which moves less people into ICT careers which in turn results in less digital technologies and services to get people into ICT topics.
Given the many initiatives and programs, the country is well aware of this predicament and wants to change this. First programs already see an uptick in adoption and we've seen with other countries (e.g., Serbia), how fast the transformation can be.
However, there needs to be a specific focus on the economy which almost always is a big driver of digital growth and innovation. The government alone can't excite the industries to digitize, it's the responsibility of industry leaders to act as best practices and show how the digitalization of processes, communication, and customer journeys can not only optimize and grow business but also create completely new business models, move traditional working models into the 21st century, and turn industries into global competitors.
Our DIGITALL experts have the right skill sets and industry know-how to help your company to become a digital champion. We help you with your digital strategy, evaluate technologies, and implement as well as customize solutions for the perfect fit. Additionally, we offer managed services and technology services to provide skilled resources and kickstart your digital projects.
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