Wednesday , June 7 2023

You can digitize EUR 9 billion in Hungary.


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McKinsey & Company

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| Reading time: about. 2 minutes

Up to € 9 billion can be added to the performance of the Hungarian economy. Digitization in 2025 –
In a recent study, McKinsey & Company said. While digital conversion is serious
Opportunities to promote economic growth, there is much to do.
Training and use of digital solutions

After the crisis, Hungary has achieved an annual average growth rate of 3.2%, thanks to employment improvements, "McKinsey & Company said in a recent study, while consulting firms found employment rates to be virtually unchanged (Hungary: 1,760 hours a year, Western Europe: 1,962 hours / year), so the hourly performance in Hungary is significantly lower than that of Western countries in the following period So the focus is on productivity improvement, so-called digital front winds (Scandinavian countries, Benelux countries, Ireland and Estonia) are more than four times more effective.

For productivity and sustainable economic development, McKinsey analysts said the priority for accelerating the digitization of the economy is for Hungary. If Hungary can take advantage of the potential of digitization, the digital economy can distribute up to 9 billion euros of domestic GDP by 2025. The share of the digital economy in the latter households will increase from 6.9% in 2016 to 11.2% in 2025. Of course, this ratio will increase in all scenarios, but not so much. If not accelerated, it will reach 7.4% of GDP. According to McKinsey's experts, this can lead to serious competitive disadvantages that can be derived not only in the Scandinavian and Benelux countries that lead to digitization, but also in our region.

The digital economy is already perceived, even though the digital economy is already perceived in five EU countries (France, Germany, Italy, Spain and the United Kingdom), even though digital pioneers are less digitized. In Hungary, the digital economy grew 4.1% between 2012 and 2016, while non-digital branch grew 2.2% per year. The consultant industry has calculated the digitization rate index. In some industries, Hungary regards local competitors as digitizing (eg business services, public services) and in other parts of Hungary lags behind other CEE countries such as manufacturing and utilities.

According to this study, digitization can have a significant impact on the labor market. Automation works virtually all aspects of the operation from a variety of perspectives, with the help of existing technology. This corresponds to jobs that require predictable physical work (75% can be automated), or jobs that require data collection and processing (especially nearly 70% automatable). At the same time, in an economic environment where there is no current labor situation, automated processes make companies more efficient, like the manufacturing industry.

To join a country in the digital age, Hungary has to develop in many areas. An important education and training system is paramount and emphasizes the skills required in the digital world. Critical thinking and problem solving, communication with others, and working in a team are key to future deployments. The education system can also help students in more information technology, math or science areas appear in the labor market and provide appropriate retraining opportunities for automation.

McKinsey knows that digital solutions are a serious challenge for digital companies, and they are especially lagging behind the developed world in small and medium-sized businesses. For example, only 8% of Hungarian SMEs use electronic billing services, while for digital front walls this percentage is 32%. There is less use of social media than predecessors. A quarter of Hungarian companies are using these marketing tools and half are at the forefront of the enterprise.

"Hungary has a good foundation for bringing digital transition to a higher level," says Levente Jánoskuti, office manager for his father's McKinsey. He argues that it is worth taking advantage of current growth momentum, favorable economic environment, expertise available in Hungary and the region, and digital infrastructure development. In the latter case, we do not do our best. "In addition to promoting modernization of education and training and digitization of small and medium-sized enterprises, the state has also made changes through the spread of lifelong education and public services and public administration," he said. You can stimulate and prepare your society.

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