Global competitiveness of the Romanian ICT industry in the innovation driven economy and its mission related strategy.
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1 Global competitiveness of the Romanian ICT industry in the innovation driven economy and its mission related strategy Gabriel Vladut
2 Current status and the degree of digitalisation in Romania Europe's Digital Progress Report 2017 The EDPR report combines the quantitative evidence from DESI (Digital Economy and Society Index) with country-specific policy insights, allowing us to keep track of the progress made in terms of digitalisation by each Member State and providing an important feedback loop for policy-making at EU level. Digital Economy and Society Index 2017 Romania ranks 28th in DESI Romanians benefit from coverage of fast broadband connections in urban areas, which translates into the second highest share of subscriptions in the EU. The take-up of mobile broadband is also accelerating. However, the rate of digitisation of the economy, including for public services, and the levels of digital skills are still low.
3 Current challenges to further digitalisation in Romania Europe's Digital Progress Report (EDPR) tracks the progress made by Member States in terms of their digitisation, combining quantitative evidence from the Digital Economy and Society Index (DESI) with qualitative information on country-specific policies. It is structured around five chapters: 1. Connectivity - Fixed broadband, mobile broadband, broadband speed and prices 2. Human Capital - Internet use, basic and advanced digital skills 3. Use of Internet - Citizens' use of content, communication and online transactions 4. Integration of Digital Technology - Business digitisation and ecommerce 5. Digital Public Services - egovernment
4 Strategy of Romania on digitalisation Government approved, in February 2015, the National Strategy for the Digital Agenda for Romania, one of the seven flagship initiatives of the Europe Strategy The Digital Agenda defines the major role that the use of ICT will have to play in meeting the Europe 2020 objectives. A full implementation of the strategic vision of the ICT sector in Romania will result in a total investment of around 2.4 billion euro. Direct and indirect impact on the economy can be translated into a GDP growth of 13%, increase in the number of jobs by 11% and cut in administration costs by 12% during National Strategy for the Digital Agenda sets out four areas of action as follows: 1. e-government, Interoperability, Cyber Security, Cloud Computing and Social Media - field which aims to increase efficiency and reduce costs in the public sector in Romania by modernizing the administration; 2. ICT in education, culture and health - field which aims to support these technologies at the sectoral level; 3. ICT in e-commerce, and research, development and innovation in ICT - area aimed at regional comparative advantages of Romania, and backs growth in the private sector; 4. Broadband and digital infrastructure services - aimed at ensuring social inclusion field.
5 Strategy of Romania on digitalisation (2) Concrete measures set out in the Strategy will lead to: Ensuring access to electronic public services for citizens and organizations (egovernment services); Improving access to the Internet by increasing the coverage of high-speed electronic broadband communications networks; Increased use of the Internet; E-commerce promotion; Increasing the number of cross-border electronic public services; Enhancing digital content and the development of ICT infrastructure in education, health and culture; Supporting the growth of the ICT sector added value by supporting research, development and innovation in the field. The strategy also establishes the following indicators for 2020 Romania: At least 35% of people use e-government systems; At least 60% of citizens use the Internet regularly; At least 30% of citizens make purchases online; Coverage with broadband communication networks (over 30 Mbps) of min. 80%.
6 Existing challenges Romania Cluster EU rank score score score DESI ,33 0,41 0,52 DESI ,31 0,38 0,49 Romania has made good progress but since it is the lowest performing state in the EU, it has significant unexplored potential for growth. Romania's overall performance shows some progress in the Connectivity dimension. Romania lags behind as regards fixed broadband coverage, as well as mobile 4G broadband coverage where Romania ranks last amongst EU Member States. Mobile broadband take-up advanced significantly, even though at a slower pace than the EU on average. The fixed broadband take-up slightly grew as well. In terms of spectrum assignment Romania performs well. In terms of subscription to fast broadband, Romania (2nd place) largely outperforms the EU average with almost twice as many subscriptions. Competition is also evidenced by the relative price per income for fixed broadband (10th place). The strategy sets out the following targets for 2020: at least 80% of broadband coverage (with speeds of more than 30Mbps); at least 60% of Romanians using the Internet regularly; at least 30% of Romanians trading on line and at least 35% of Romanian citizens using e-government systems.
7 Connectivity Romania's performance is below the EU average but it's making average progress. Coverage of next generation access (NGA) network (with speeds of more than 30Mbps) however is at 72% of homes covered, similar to the EU average. In terms of take-up, the number of subscriptions to fast broadband is among the highest in the EU (63% of fixed broadband subscriptions are above 30Mbps as opposed to only 30% in the EU). In view of the high level of infrastructure competition, Romania decided to deregulate markets 3a and 3b of the 2014 Recommendation (Wholesale local access and Wholesale central access), a first in the EU. In terms of the take-up of fixed broadband subscriptions, despite progress, Romania is still among the lowest in the EU due the low levels of digital skills of the population, the broadband subscription price and the low level of development of digital public services. Access to ICT services consequently remains uneven among the population with big gaps especially in rural areas. Mobile broadband take-up is also below the EU average (59 as opposed to 75 subscribers/100 people). Efforts to boost national investments in broadband are continuing sets the targets for 2020: 100% households fixed broadband coverage, 80% households over 30 Mbps broadband coverage and 45% households connected with subscriptions over 100 Mbps.
8 Human Capital In terms of digital skills, Romania's performance is below the EU average but it's making some progress with more people getting online and digital skill levels slowly improving. A little more than half of Romanians are regular internet users (56%) compared with 79% in the EU. 28% of Romanians possess above basic levels of digital skills versus 56% across the EU. Romania benefits from a good pool of science, technology, math and engineering (STEM) graduates with 1.6% of Romanians aged years old holding a STEM degree although this level is falling according to the latest figures. The share of ICT specialists in the economy is increasing as IT jobs offer attractive salaries. The Ministry of Education and Research aims to increase the digital skills of the new generation and is preparing some initiatives to tackle this issue. As of 2017, both ICT and programming classes are being introduced in middle school. Various private companies have launched their own campaigns to improve digital skills and attract ICT specialists. Digital skills still seem to be mostly promoted through private sector initiatives, rather than by public policy.
9 Use of Internet Romanian Internet users engage in a broad range of online activities. They read news online (63%), listen to music, watch films and play games online (67%), use the Internet to communicate via voice or video calls (45%) or via social networks (74%). However, when compared with last year, the only category with increased activity is on-line video calls. Romanians are reluctant to engage in online transactions, with online shopping and online banking registering some of the lowest levels in the EU. This is the key challenge for Romania in terms of Internet use, because a digital economy is partly fuelled by its citizens trust in the online channel. In terms of e-commerce, a more clear delineation of what are the applicable laws and how they are enforced is needed. An e-commerce Action Plan planned by the Romanian Government should help in this respect. Regarding online banking, the public's lack of trust could be addressed through policy measures. The adopted law whereby all stores with a turnover above 10,000 /year should have POS terminals installed should lead to a higher degree of trust in electronic payments as well.
10 Integration of Digital Technology Businesses in Romania continue to lag behind those in other Member States in taking advantage of the opportunities offered by digital technology. Romania still ranks last in Europe for integrating digital technology into business, even if some progress has been made. The highest growth has been in the share of firms using social media, rising from 6 to 8%. Even taking this uptick into account, Romania remains last in the EU for this indicator. This contrasts with the high share of individual social media users in the country. Furthermore, no progress has been registered in terms of SMEs selling online (7%) and a decrease can be seen for use of cloud services (-5%) and ecommerce turnover for SMEs (-4.3%). In terms of policy, Romania does not yet have a national strategy for digitizing industry; components such as cloud computing, open data and e-commerce are included in the Romanian National Digital Agenda Strategy, but the focus seems more on supporting measures for citizens, rather than the business environment. Overall, there seems to be a lot of room for adopting policy measures that support the uptake of digital technologies in the day to day life of companies. Companies in Romania do not seem to see digital technology as a tool to boost productivity and create growth. ICT technology and cloud services are seen as a significant additional investment, rather than a pre-requisite for a successful business. The concept of digital hubs is beneficial to companies and could be expanded to other places in Romania.
11 Digital Public Services Romania's performance is below the EU average but with some progress. Romania has advanced mainly on the supply side by increasing the number of services which can be completed online and by automatically pre-filling forms for citizens. In addition Romania also progressed on promoting an Open Data policy. Despite these improvements on the supply side, use of egovernment services remains the lowest in the EU. A series of measures taken by the Romanian Government targeted the reinforcement of governance and coordination of the implementation of e- government solutions. The position of coordinator of information technology, coordinated by a Secretary of State, was established. In addition an innovative initiative (GOVITHUB13 programme) managed to attract a high number of ICT experts to improve the quality of the public administration and open an entire innovation, digital and startup ecosystem. The national administration IT system is fragmented, adding to the administrative burden for citizens and businesses. In the current competitive environment, Romanian public administrations have difficulties in attracting and retaining ICT specialists but programmes like GovITHub have shown that public sector innovation is possible and ICT specialists can be found.
12 Initiatives / Projects An important project is in progress until July 2016 and will recommend a strategy to align and integrate ICT resources within the Romanian government and provide the policy and technical recommendations to adopt a Romanian Government Enterprise Architecture and Interoperability Framework. Another initiative launched on 24 February 2016 is an on-line platform to consult with citizens and businesses on how to simplify interaction with the public administration ), to identify ways of reducing bureaucracy in the public administration through suggestions from the general public. This initiative will help identify ways to simplify the administration and to devise user friendly solutions together with users. The initiative is also looking to remove cumbersome documents and procedures. The initiative has attracted thousands of suggestions for simplification. Another positive sign is that Romania has at its disposal for egovernment projects an allocated sum of 213 Million in the Programming Period.
13 ARIES initiatives: Improving the implementation framework of the government projects and public acquisitions related to the Digital Agenda, by adopting interoperability and quality assurance standards; Enhancing the need of Digital Agenda public applications and implementations by sophisticated public procurement, participative democracy related to Open Data and Open Government Partnership, engaged by Romania with EU and the international community, and enabling the Innovation driven economy and knowledge society into the national economy and community; Unleashing the synergy among the Digital Agenda stakeholders by enabling clustering effects in the regions and by enabling Smart Specializations in the regions, according to their comparative and competitive advantages and regional and local aspirations; Improving the spread of knowledge and rising its effectiveness in the innovation driven economy and knowledge society by bringing the stakeholders closer, using at least the triple helix model, if not the quadruple or even qvintuple helix model.
14 Thank you for your kind attention! The premise that created ARIES is the support for the informational competitiveness of Romania at the same level with other countries of the world.
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