Tackling today’s challenges while building a stronger digital future
How digitization is helping leaders address the uncertainties and priorities of the present and lay the foundations for a better tomorrow
Building a stronger digital future
Leaders across Central & Eastern Europe (CEE) are dealing with an unprecedented series of challenges—the war in Ukraine is having a tragic human cost, and its impact is
reverberating across societies and economies in the region and beyond. Major disruption to supply chains that started with the COVID-19 pandemic remains high, and inflation is fueling a cost-of-living crisis.
Managing risk, bolstering resilience, and navigating pressure on budgets have become the most immediate and urgent priorities for businesses. The need to address long-term commercial, economic, and societal issues remains, even as new ones emerge. We have a responsibility to help people and organizations use our technology to reinvent their business models, address a variety of challenges and opportunities in a comprehensive
and forward-looking way, and to unlock more value with less—less resources, less energy, less investment.
Our recently published Digital Futures Index established that more digitally advanced countries are greener, more productive, innovative, and competitive. CEE experienced a spur of technology adoption and digital transformation during the COVID-19 pandemic. It proved the value of digitization in helping make economies and organizations stronger. Further accelerating digital progress will better us to respond to the opportunities and uncertainties of the present, while building the new capabilities and solutions we need to tackle those of tomorrow.
How do companies make the case to prioritize digitization? How can technology be used to help countries achieve both their near-term and long-term goals?
To help leaders make more informed policy and investment decisions, this eBook shares some key insights from the Digital Futures Index alongside inspiring case studies. It sets out an agenda for why and how digitization will help tackle today’s challenges while building a stronger digital future. It is a guide for strategic thinking and offers
jumping-off points to discover more on the topics and issues raised. We’d also be delighted to carry on the discussion in person we‘re ready to partner with you to help advance your digital journey.
Joacim Damgard,
President of Microsoft Central and Eastern Europe
2
Table of contents
Building resilience and strengthening economies 5
Key enablers 17
Here you’ll read about how organizations use cloud technology to run safer, more secure operations.
Conclusion 21
Appendix 22
In this ebook, you‘ll find:
About the Digital Futures Index
Industry-structured resources with solutions to help you navigate and define next steps
Selection of success stories of digital transformations from CEE which will inspire and enrich your digital agendas
Skilling resources that will empower your teams to achieve their goals
The Digital Futures Index analyzes the digital journeys of 16 European countries—from those at earlier stages to recognized ‘front-runners’. Using over 1,000 data points from trusted public sources, it maps digital development and models
its relationship with societal and economic outcomes. It was designed to provide actionable insights to help leaders chart an accelerated path forward for every country.
4
Building resilience and strengthening economies
The Digital Futures Index shows that digitization is a path to stronger, more sustainable societies and economies. It’s profoundly changing the way we work, live, and do business—reshaping entire industries and the delivery of public services.
In the near future, digitization can help mitigate risk and enhance resilience. At the same time, it creates a springboard to achieve long-term goals through fueling more innovation and improving sustainability.
Economic and societal gains score
On every measure of digital progress, we found that more advanced countries scored higher on key outcomes that matter to people, businesses, and countries.
Czechia
Slovenia
Malta
Portugal
Estonia
Denmark
Netherlands
Finland Sweden
Romania Croatia
Poland
Hungary
Greece
Serbia
Digital development score
5
Are Europe’s digital aspirations still on track?
“If anything, they’ll be accelerated. Neither digital transition nor fighting climate change can stop.”1
Margrethe Vestager,
EU Commissioner
Increasing productivity is a priority for both government and business leaders and is key to growing long-term competitiveness. Economic performance is closely linked to Total Factor Productivity—a measure of the overall efficiency of how capital and labor are used to generate output and enhance contribution to GDP. By focusing on productivity, organizations build the resilience needed to navigate dynamic markets, manage tight budgets and margin pressure, and to absorb shocks.
Productivity
The Digital Futures Index shows a significant correlation between digital development and increased productivity (GDP per hour worked), as well as higher average salaries.
Sweden
Netherlands
Denmark
Finland
Portugal
Poland
Slovenia Czechia
Malta
Estonia
Greece
Romania Croatia
Serbia
Hungary
Digital infrastructure
1Source: “Politico” event broadcast online, 30th March 2022. 6
The Index also revealed that digital competitiveness—the ability of organizations to generate value from technology and digital innovation—is one of the leading correlations between the digital progress of a country and overall economic and societal gains.
But while technology is foundational, skills are turnkey: organizations need skilled information and communication technology (ICT) professionals who can implement advanced digital technologies and bring their benefits to life across the organization.
As the number of ICT specialists in the workforce goes up, innovation and productivity increases.
Innovation performance rating
Netherlands
Sweden
Denmark Finland
Romania
Hungary Poland
Czechia
Malta Estonia
Portugal Slovenia
Greece
Serbia
Croatia
Percentage of ICT-specialists of
total employment
7
Government also plays a key role through creating a favorable policy and regulatory environment that enables and fosters digital progress.
The Index shows a strong relationship between the ‘ease of doing digital business’ and productivity gains.
Productivity
Slovenia Poland
Sweden Netherlands Denmark
Finland
Malta
Romania
Hungary
Czechia Estonia Portugal
Serbia
Greece Croatia
Ease of doing digitial business
The bottom line?
A thriving digital economy is more productive and resilient. It will be better positioned to weather the challenges of the present, while providing a platform that enables everyone to unlock new opportunities and live a better life.
Countries that gain the most from digital progress have advanced digital economies.
Economic and societal gains score
Slovenia
Czechia
Denmark
Finland
Malta Sweden
Romania
Croatia
Greece
Poland
Serbia
Portugal Hungary
Estonia
Netherlands
Size of digital economy
8
Key takeaways
Sustainable countries and higher resilience go hand in hand with a strong digital economy. Nations and leaders need to start looking at how they can provide the right foundation for innovative ideas that will solve the issues we are facing now, and will face in the new future.
Actionable insights to driving creativity and growth:
Digitization is a path to stronger, more sustainable societies and economies.
Interested in exploring others’ perception on transformation imperatives?
Pobuca expands and helps businesses globally with cloud-based solutions.
Digitization can help mitigate risk and enhance resilience for the future.
Nemocnice Jihlava hospital enhances patient-centric care with Microsoft 365.
Fueling more innovation and improving sustainability creates more efficiency in the future.
Poland’s national environment fund
manages processes better with Azure.
9
Fueling innovation
The Digital Futures Index found that every category of digital development strongly correlates with increased innovation. In other words, innovation is a product of a connected ecosystem. To intentionally cultivate it, policymakers and leaders need to take a holistic approach that encompasses business, the digital sector, digital infrastructure, start-ups, talent, and the public sector.
Importantly, the public sector isn’t just a small cog in this ecosystem—it’s a major catalyst. The public sector is delivering ‘lighthouse’ projects that blaze trails for others. It is encouraging private-sector digital infrastructure investment, advancing the country’s technical skills base, launching open data initiatives, and cultivating a diverse local ICT supplier base.
Putting more emphasis on digitalizing the public sector will become more and more vital in the future if leaders want to catalyze more innovation in their countries.
Find out how these organizations leveraged cloud technology to streamline operations and set the right foundation for a greener future.
Czech energy leader Innogy
drives sustainability by simplifying photovoltaic system customization.
Delivery service Packeta, based in the Czech Republic, is shipping globally while staying local and sustainable.
Electric sports car manufacturer Rimac Technology gains scale and speed with Azure high-performance computing (HPC) and Azure AMD.
Hungarian start-up Parkl connects a parking app to transportation devices across the city with Azure to provide a more sustainable way of traveling.
Electricity provider Slovenské elektrárne improved speed of forecasting energy production based on weather changes with Azure and Power BI.
The Ministry of Economic Affairs and Communications of Estonia cooperates with Microsoft on the development of the Estonian virtual assistant Bürokratt.
11
Setting innovation free
Expectations of working culture have permanently shifted since the COVID-19 pandemic to offer a more flexible working culture. Hence, simply reverting to traditional ways of working will put competitiveness at risk as employees are seeking more flexibility.
The key word is flexibility—the best outcome is not obtained by having either remote or on-site work only, but rather a blend of both. Hybrid working enables everyone to bring their best, anytime, anywhere because work is no longer defined as a place, but something people do. Transforming working culture in this way will help keep key talent in the region, as well as attract people to return after gaining experience abroad. And to gain the most benefit from hybrid working, we need to ensure we are continually growing and deepening employees’ digital skills.
Level of innovation
Sweden
Netherlands Denmark Finland
Malta
Czechia
Slovenia
Hungary Poland Croatia
Estonia
Portugal
Romania
Serbia Greece
Percentage working from home during COVID-19 pandemic
12
Key takeaways
Innovation takes a village, and leaders should look to invest in people and partnerships to help it flourish. Empowering talent through digital skills and a hybrid working culture leads to greater innovation- which is great for job satisfaction, and helps organizations deliver better products and services to their customers and clients.
Actionable insights to driving creativity and growth:
Digitizing the public sector boosts talent attraction and retention and encourages
more innovation
Learn How Microsoft is making AI real for every organization and every employee today.
Engage more customers with the commercial marketplace.
Railways company LTG enables remote working for frontline and office workers.
Giving employees the flexibility
of hybrid work will encourage innovative ideas
Libra Bank creates a seamless online work environment for 1,000+ employees.
Developing the right digitization strategies from the start will set up the right foundation
City of Zagreb simplifies kindergarten enrolments with a digital platform.
13
Enhancing sustainability
There is an undeniable urgency for leaders to take action to meet carbon emission targets and accelerate the shift to a more sustainable economy. And when it comes to prioritizing budgets and resources, it’s not a case of compromising, because what’s good for the planet is also good for businesses.
Combining ‘digital’ and ‘sustainability’
In particular, sustainability can enhance both efficiency and resilience—which are key priorities right now for every organization. The Digital Futures Index shows the powerful
relationship between digitization and a country’s environmental performance. It provides empirical evidence to underscore why ‘digital’ and ‘green’ strategies should be combined to produce the greatest impact.
Digitization and sustainability should be brought together as part of national resilience and recovery initiatives. Investing in both digital technology and skilling people will help nations reach their green goals more quickly and effectively.
Enviromental performance
Sweden Denmark
Finland
rating
Slovenia
Czechia
Malta
Netherlands
Greece
Romania
Portugal
Croatia Hungary Poland
Serbia
Estonia
Spending on digital technology & services
Having more digitally proficient citizens and workers plays an important role in giving us cleaner air and a greener environment.
Enviromental performance rating
Denmark Sweden
Finland
Czechia
Greece
Slovenia
Portugal
Malta Estonia
Netherlands
Romania
Hungary Poland
Serbia
Croatia
Digital skills of general population
15
Key takeaways
Investing in digital technology skills should be a top priority for advancing sustainability to make our societies and economies stronger and greener.
Actionable insights to creating greener and more sustainable operations:
Having higher sustainability can improve the efficiency and resilience
of a business
Try Microsoft Sustainability Manager free for 30 days
Accelerate sustainability with environmental, social, and governance (ESG) insights.
Organica Water improves its wastewater treatment process with Azure.
Digital and green strategies go hand in hand in building a more sustainable nation
PKP Energetyka uses machine learning to manage renewable power sources.
Investing in employees’ technology skills enable organizations to reach their green goals faster
Mytilineos ensures accurate loading of final products with Azure Custom Vision.
16
Key enablers
Security is top of mind for every leader. Protecting critical infrastructure and operations, safeguarding data, and ensuring business continuity have been paramount issues for organization.
Across Europe, nation-states, people, businesses, and supply chains are facing a rise in cyber threats. In 2021, the number of cyber-attacks reported against critical European targets more than doubled to 304 serious attacks, up from 146 in the year prior. Unfortunately, it’s an upward trend that is continuing in 2022, with high-profile cyber attacks having already taken place on telecommunications networks, government servers, energy facilities, and more.
Security and the cloud
With cyber threats increasing in both frequency and complexity,
it’s clear that security is foundational in enabling the shift to a digital-first economy and society. It’s a key factor in the accelerated adoption of the cloud, where security is built in
‘by design’ with hardened data centers, managed services, and predictive threat mitigation. The benefits go beyond security and resiliency, however. The Digital Index Futures shows it also drives greater productivity and unlocks more innovation. It’s a win-win situation that makes a compelling case for leaders to continue to prioritize cloud investment.
A key insight from the Digital Futures Index is the interconnected benefits of digitization. For leaders developing their digital strategies, it underscores why considering both the immediate need and broader benefits can help make a more compelling case to prioritize investment.
Innovation performance rating
Sweden Netherlands
Finland
Malta
Denmark
Czechia Estonia
Hungary Portugal
Poland
Romania Greece
Croatia
Slovenia
Percentage of
Serbia
businesses using cloud computing software
18
Digital Leadership
If senior leaders in your business aren‘t digitally-savvy, it puts you at a disadvantage.
For every organization today, it’s impossible to over-emphasize the importance of skilling programs and continual learning. It’s just as critical for leaders as for employees to ensure everyone has the digital skills they need to be successful.
Innovation
Netherlands
performance
Sweden
Finland
rating
Czechia
Estonia
Malta
Denmark
| Poland |
Hungary Portugal
Romania
Serbia Greece
Slovenia Croatia
Percentage of individuals aged 45-64 with above basic digital skills
19
Key takeaways
As security threats become more advanced, it’s crucial for organizations to stay ahead by investing in technology that provides secure access and data management. Internal ICT professionals should also be equipped with up-to-date
knowledge of deploying crucial turnkey technology.
Actionable insights into shaping a safe, digital-first society
Using cloud technology allows for better security
features when shifting their workflows online
Your digital leadership in empowering the workforce with right skills to support positive changes is crucial. Microsoft supports leaders in this process.
Cooperative Bank of Epirus creates a hybrid work model with Microsoft 365.
![]()
It can also provide the needed ease and flexibility to meet constantly increasing security standards
Building a digitally confident team is crucial to stay on top of new digital advancements that could impact your organization
Česká spořitelna better manages customer communications and security.
INTRALOT empowers employees with an Azure skilling program.
20
| 21 |
![]()
Leading the change
Europe’s ambition is to be a leader in the global digital economy. As such, it is mobilizing trillions of Euros to drive innovation and accelerate digital transformation.
Central and Eastern European countries can be the catapult to reaching our shared goal—if we progress, Europe leaps forward and countries and businesses alike secure our competitive future on the global stage.
As this eBook has shown, digitization can help address near-term priorities while advancing long-term goals. Leaders in both the public and private sector have a pivotal role to play in setting the agenda and making the case for investments in digital transformation. Far from pressing pause on digital initiatives, we need to hit accelerate. The current context only increases the urgency. Particular focus should be given to:
- Growing everyone’s digital skills, especially those in decision-making roles
- Digitizing more operations and services to increase efficiency, enhance resilience, and deliver more benefits to customers and citizens
- Embracing digital technology and a hybrid working culture to empower talent to bring their best
![]()
About the Digital Futures Index
Using highly credible public data sets we created a data model to map digital development along a wide range of parameters. We also collected and modeled key economic and social benefit indicators, enabling us to do cross-correlations to
understand the positive relationships that exist between the level of digital development and outcomes for countries, businesses, and citizens.
In total, our model includes 55 individual data parameters. These are organized under categories and sub-categories to make it simple and logical for the model and navigation. Data sources were selected on the basis of geographic coverage, date of publishing, and credibility.
Digital Development categories:
- Digital Business
- Digital Infrastructure
- Digital Government and Public Sector
Economic and Societal Gains categories:
- Governance Efficiency
- Level of Innovation
- Digital Sector
- Human Capital
- Sustainability Performance
Primary data sources included Eurostat, OECD, UN, WTO, Euromonitor, IMF, European Investment Bank, European Commission, European Environmental Agency, the World Bank, and more.
To create the Index, raw data was ‘normalized’ so that a score of 100 represents the CEE-average. A score of 110, for example, means that a country performs 10%
better than the CEE-average on that parameter. The reason for taking this approach is so that we are comparing like-for-like numbers between parameters of differing types and values (e.g. $ value of e-commerce sales and % of individuals with above basic data skills).
The Index includes data for the following CEE countries:
- Croatia
- Czech Republic
- Estonia
- Greece
- Hungary
- Malta
- Poland
- Romania
- Serbia
- Slovenia
It also includes a select group of advanced benchmark Western European countries. These were chosen on the basis of being identified in various authoritative reports, including those from McKinsey, as digital frontrunner nations.
- Denmark • Finland • Netherlands • Sweden Lastly, we included Portugal as a recognized entity to provide an additional
point of comparison.
22
Escape Business Solutions 