Digital transformation in Central and Eastern Europe (CEE) - statistics & facts
Digital transformation (DX) is a global trend that refers to the changes in industrial processes, working environments, and other sectors due to the increasing usage of new technologies. These include connected devices, Artificial Intelligence (AI), robotics, 5G, blockchain, cloud technology, drones, and 3D printing, among others. As a result, the information and communications technology (ICT) sector and e-commerce in Central and Eastern Europe are expected to rise in the upcoming years. In Poland, which tops the ranking of the largest digital markets in CEE, the digital economy value is forecast to grow by 175 percent between 2021 and 2030.
Digital transformation spending is rising gradually across CEE, even though it remains lower than in Western Europe. While most Polish companies expend only up to five percent of their annual revenue on digital transformation, 14 percent of the businesses plan to spend more on DX in the following 12 months. Furthermore, the largest share of the enterprises would either keep their levels of hiring for digital transformation the same or increase them. In Czechia, more than 40 percent of businesses spend 5 to 20 percent of their total investment budget on digital initiatives, which is more than in the previous year.
Another major pillar of digitalization in the region is automation. Czechia has witnessed a steady growth in robotization over the past two decades, especially before the COVID-19 pandemic. Together with Poland, Czechia is one of the highest-earning industrial robotics markets in CEE. At the same time, Slovenia has the highest robotization density and ranks first in Artificial Intelligence (AI) adoption in the region. In both Czechia and Slovenia, the automotive industry is the key sector employing industrial robotic automation.
How much do CEE companies spend on digital transformation?
Companies can invest in digital transformation by purchasing hardware, software, IT, and business services, investing in research and development (R&D) of new technologies, and training employees. Impacted by the Russia-Ukraine war, enterprises in CEE were more reluctant to allocate budget toward digital solutions than in other global regions in 2022, as could be seen from the decline in cloud infrastructure spending. Nevertheless, CEE's IT services revenue increased in 2022, and it is expected to continue growing in 2023.Digital transformation spending is rising gradually across CEE, even though it remains lower than in Western Europe. While most Polish companies expend only up to five percent of their annual revenue on digital transformation, 14 percent of the businesses plan to spend more on DX in the following 12 months. Furthermore, the largest share of the enterprises would either keep their levels of hiring for digital transformation the same or increase them. In Czechia, more than 40 percent of businesses spend 5 to 20 percent of their total investment budget on digital initiatives, which is more than in the previous year.
Which technologies drive innovation in CEE?
One of the upcoming steps in CEE's digital transformation is the 5G rollout. The number of 5G subscriptions in CEE is forecast to grow by nearly 16 times from 2023 to 2028. Major telecommunications operators, such as A1 Slovenia, Magyar Telekom, Orange, and T-Mobile Poland, plan to switch off their 2G and 3G networks and upgrade them to 5G until 2025.Another major pillar of digitalization in the region is automation. Czechia has witnessed a steady growth in robotization over the past two decades, especially before the COVID-19 pandemic. Together with Poland, Czechia is one of the highest-earning industrial robotics markets in CEE. At the same time, Slovenia has the highest robotization density and ranks first in Artificial Intelligence (AI) adoption in the region. In both Czechia and Slovenia, the automotive industry is the key sector employing industrial robotic automation.
