Technology would bring billions back to Slovakia. But he has a hook

Digitization can have serious consequences for employment. The state, as well as the employees themselves, must manage them.

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Thanks to digitization, Slovakia could increase the annual gross domestic product (GDP) by 20 billion by 2025. Consulting firm McKinsey & Company has just studied the potential of the digital economy in the countries of Central and Eastern Europe.

According to 2016 data, the digital economy accounts for 6% of Slovak GDP, or 4.8 billion EUR. If Slovakia and its sector support the growth of digitization, revenues could reach 20.9 billion euros in 2025. euros.

We assume that we have good assumptions. By helping us to help our neighboring countries, we follow in the same way as we do. Together, we can meet challenges such as the flight of talent abroad. However, with the emergence of the digital economy and especially automation, the threat of a negative impact on employment also appears.

We have the potential

According to the study, we are behind two groups of comparative states. One is "the big five of the EU", namely Great Britain, France, Germany, Spain and Italy. The second is what we call the "digital champions", including Estonia, Ireland, Benelux and Scandinavia.

Compared to them, we are significantly behind productivity (GDP per hour worked) and the total amount of capital per employee. Paradoxically, Slovaks work more than 100 hours more than workers in the states mentioned.

Slovakia has developed at the moment thanks to the "non-digitized" economy. The analysis indicates that we are the most affected by exports, foreign investments, funds in euros and the low cost of our cheap labor. However, the growth sources mentioned above are slowly falling towards their limits.

What would have helped launch the digitization of the economy? The authors call for the opening of the market, the quality and availability of digital infrastructure or ICT talent.

Will employment be compromised?

One of the components of scanning needs to be even more automated. Even today, technology can automate up to 53% of the work in Slovakia.

"This would represent up to 1.2 million jobs.The impact on employment and overall productivity will depend on the preparedness of individuals and the structure of the economy," said Dan Svoboda, Managing Partner of McKinsey CR and Slovakia.

At the same time, he thinks people will find work, as they did in previous industrial revolutions.

Everyone has to give a hand

Digitization will bring even greater demand to IT experts, programmers and people with advanced technological skills. For the latter category, we are currently lagging behind – especially in the over-35 age group. People should invest time to improve their abilities.

And what about the support of the state? The study advocates the introduction of technologies in the public sector, the promotion of their use by entrepreneurs, the improvement of the environment for startups and start-ups and the aforementioned cooperation with neighboring countries.

The private sector should be more involved in the process of staff training, lifelong learning or retraining.