Domestic broadband is great but hungarian companies are lagging behind in the digital transition

According to the results of the Digital Decade Index, which measures the digital development of EU Member States, Hungary continued to perform strongly in 2024 in terms of the availability and quality of its information and communications infrastructure. However, there is still considerable room for improvement in businesses’ digital capabilities—not only in the adoption of artificial intelligence, but also in the use of more commonplace ICT technologies. At the same time, thanks to developments related to the EESZT system, Hungary performs above the EU average in the field of e-health.

In light of today’s geopolitical challenges, achieving the objectives of the EU’s Digital Decade 2030 policy programme has become even more important, as the EU’s digital transformation is crucial to maintaining Europe’s competitiveness and resilience. The aim is for Member States to reduce their excessive technological dependence and for the EU to increase its sovereignty in this area, thereby strengthening its strategic autonomy.

Hungary performs well in infrastructure and e-health

“Although the infrastructure required for the digital transition is already in place in Hungary, most companies—particularly SMEs—have not yet recognised what is truly at stake if they fall behind in the digital transition. In the coming years, the adoption rates of AI, cloud and BI technologies, which go beyond basic digital skills, will become some of the most important indicators of a country’s competitiveness. For this reason, the Digital Decade report is not merely a snapshot, but a warning signal: the competitiveness of the Hungarian economy is at risk,” said Krisztina Tajthy, Secretary General of IVSZ, commenting on the findings concerning businesses in the EU report covering 2024.

According to the survey, which analysed data from 2024, 81% of Hungarians believe that the digitalisation of public and private services makes their everyday lives easier. The latest findings of the annually published Digital Decade Index—formerly known as DESI—which measures the digital development of Member States, indicate that Hungary shows moderate ambition in contributing to the objectives of the Digital Decade. Based on the eight performance indicators assessed in 2024, the country is progressing well towards its targets, with 75% of them on track to be achieved.

Hungarian companies need more support to catch up digitally

At present, 22.24% of Hungarian SMEs have a high or very high level of digital intensity, compared with the EU average of 32.66%. Developing basic digital skills alone is not sufficient: more ambitious targets and greater support are needed to enable businesses to catch up with their competitors in the European Union.

According to the report, Hungary continues to have an exceptionally strong digital infrastructure. Fibre-optic network coverage stands at 79.9%, exceeding the EU average of 69.2%, while the country’s 5G coverage rate of 85.6% is also considered particularly strong, despite remaining slightly below the EU average of 94.3%. The report’s authors also highlighted as a positive example that the average level of access to electronic health records in Hungary, at 86%, exceeds the EU average of 82.7%—thanks, among other things, to improvements made to the EESZT service last year.

A lack of digital skills is limiting companies’ competitiveness

Although small and medium-sized enterprises account for the overwhelming majority of Hungarian businesses, their economic value added is significantly lower than that of large companies. In Hungary, large companies have higher adoption rates than SMEs across all major technologies, from cloud services to AI. Most Hungarian businesses—particularly small and medium-sized enterprises—are still not taking full advantage of the benefits offered by these digital technologies. This is due to a lack of digital skills, which negatively affects the competitiveness of the economy.

Looking solely at basic digital skills, 57.4% of Hungarian SMEs possessed these skills last year. This is significantly below the EU average of 72.91% and remains a considerable distance from the target of 89% set for 2030. These figures show that targeted measures are still needed to bridge the digital divide in basic digital literacy. It is still not sufficient to focus exclusively on promoting more complex technologies that go beyond these fundamental capabilities. IVSZ participates in several European Union projects—including Cyberhubs, Digitaltech EDIH, Level Up and ARISA—which offer free training to individuals and businesses in the fields of cybersecurity and artificial intelligence.

Twice as many Hungarian companies now use AI—but the number is still insufficient

As part of the Digital Decade programme, Hungary has set a national target for 24% of local businesses to use artificial intelligence applications by 2030. In 2024, the proportion stood at 7.41%, representing a doubling compared with 2023.

Although this significant increase considerably exceeds the EU-wide growth rate of 67.2%, Hungary still remains below the EU average of 13.48%. According to last year’s statistics, 6.97% of Hungarian SMEs and 23.46% of large companies used AI-based solutions. One of the main barriers to adoption among micro and small enterprises is the lack of the necessary digital skills.

Despite strong progress over the past year, the adoption of artificial intelligence remained limited among small and micro-enterprises. A positive development in this area may be the Hungarian government’s decision to update its AI strategy, originally developed in 2020, with the revised strategy expected to be published in the near future.

Hungary is moving in the right direction in training digital professionals

According to the 2024 report, Hungary did not achieve its target of 4.9% for the share of ICT specialists. Digital professionals account for 4.5% of the total workforce, which is below the EU average of 5%. However, Hungary performed above the EU average in terms of annual growth, which may indicate that progress has begun in the desired direction.