We are performing above average in infrastructure development but domestic companies are still weak in ai according to the EU’s digital report

According to the Digital Decade, the EU index measuring the digital development of Member States, Hungary made significant progress in 2023 in expanding broadband and 5G internet coverage, as well as in increasing the proportion of the population with basic digital skills—although the progress achieved in the latter area still does not resolve the shortage of ICT specialists. Hungarian small and medium-sized enterprises also made progress in digitalisation, but Hungarian companies continue to underperform in the adoption of artificial intelligence. According to IVSZ, much greater attention must be paid to integrating new technologies, using them in business and developing digital skills if Hungarian companies are to remain competitive.

According to the latest edition of the European Commission’s Digital Decade report, which assesses the digital state of the EU and its Member States, an exceptionally high proportion of Hungarian respondents—83%—believe that the digitalisation of public and private services related to everyday life makes their daily lives easier.

The authors of this year’s Digital Decade report believe that Hungary demonstrates considerable ambition in its roadmap to 2030 and is therefore likely to make efforts to achieve the objectives and targets of the EU’s Digital Decade 2030 policy programme.

“Based on this year’s results, all the conditions are in place for Hungary to emerge as one of the winners of the transformation of industries through digitalisation in the coming years: Hungarian businesses have achieved significant improvements in several areas, and the population’s digital skills have also developed. In practice, however, we do not necessarily see the situation as being quite so favourable. Many companies have begun moving towards digital transformation, albeit in small steps, but for digital solutions to provide them with a genuine advantage, they would need to build on a long-term digitalisation strategy. This is still missing in most organisations, particularly among SMEs. There are also still not enough professionals with the digital skills required to support this transformation. Further programmes are needed at both government and corporate level if Hungary is to become one of the EU’s digital leaders by 2030,” said Krisztina Tajthy, Secretary General of IVSZ, commenting on the report’s findings.

Digital literacy among the population has improved

In recent years, Hungary’s progress in digitalisation has been held back primarily by the slow development of digital competencies. However, the latest figures show that the situation has improved significantly since 2021, by almost ten percentage points: in 2023, 58.9% of the Hungarian population had at least basic digital skills. This places Hungary above the EU average of 55.6% and ranks the country fifteenth among the Member States.

According to the report’s authors, Hungary could most effectively bridge the digital divide by developing and investing in inclusion policies focused on disadvantaged groups, such as unemployed people and older generations.

The proportion of ICT specialists among Hungarian employees increased slightly in recent years to 4.2%, but remained below the EU average of 4.8%. Meanwhile, demand for digitally skilled professionals remains substantial, particularly in the fields of artificial intelligence, cloud technologies and cybersecurity.

Every second Hungarian SME has at least basic digital capabilities

A total of 53.2% of Hungarian SMEs have at least a basic level of digital capabilities. This may include, for example, providing employees with remote access to company systems, holding online meetings, raising employees’ awareness of IT security or employing an IT specialist. With this result, Hungary performs a few percentage points below the EU average. However, the report’s authors consider it a positive development that the country achieved an outstanding improvement of almost 25% in this area over the past two years.

At the same time, very few Hungarian companies currently use AI-based solutions. In 2023, their proportion was just 3.7%, meaning Hungary only outperformed neighbouring Romania and Bulgaria among the Member States. Among neighbouring countries, Slovakia at 7%, Croatia at 7.9% and Austria at 10.8% perform significantly better in this area. Nevertheless, it is encouraging that Hungary’s current result still represents annual growth of more than 10% compared with 2021.

According to the report, 37.1% of Hungarian companies use cloud-based services, which is consistent with the findings of an economic impact study on cloud technologies commissioned by IVSZ. However, IVSZ believes that accelerating the pace of cloud adoption is essential, as the technology has significant transformative potential for both individual companies and the economy as a whole. A supportive government approach could generate more than HUF 7,000 billion in additional GDP over ten years.

Regarding the corporate use of data analytics, the report states that Hungary’s performance of 53.2% is far above the EU average of 33.2%. This is surprising given that Hungary is among the lowest-performing countries in the use of data-driven artificial intelligence.

Hungary is a leader in infrastructure

Hungary has been a leader in ICT infrastructure development since 2018. The proportion of broadband connections is above the EU average, while the prevalence of fibre-optic connections, at 76.2%, is particularly high compared with the EU average of 64.0%.

At the same time, 5G mobile coverage is also continuing to expand. By 2023, it had risen from 57.9% in the previous year to 83.7%, representing an increase of almost 50%. Despite this, it remained below the EU average of 89.3%. However, the report’s authors highlighted that while nearly one quarter of customers in EU countries already use 5G-capable SIM cards, the proportion in Hungary is only 7.4%. Hungary also significantly lags behind in the availability of the 3.4–3.8 GHz frequency band used to support services requiring high bandwidth. Only 37.7% of Hungarian households have access to these frequencies, compared with every second household across the EU.

The digital state is developing, but gaps remain

Regarding the availability of the most important digital public services for citizens and businesses, Hungary remains below the EU average. Although seven out of ten Hungarians already have an electronic identity card, its use is currently limited to domestic services. More substantial changes are expected in this area with the introduction of the National Digital Citizenship Programme.

However, Hungary is already significantly more advanced in access to electronic health records. It is therefore no coincidence that the EESZT application has become the country’s most popular digital public service.