Digitisation on agenda as prime minister of pioneering Estonia visits Prague

Estonian Prime Minister Jüri Ratas has been in Prague on Friday for talks with his Czech counterpart Andrej Babiš focused on digitisation, an area in which the Czech government is eager to step up its game. Consultants McKinsey have just published a study saying that accelerated digitisation could deliver up to a massive EUR 26 billion in additional Czech GDP by 2025. I asked Tomáš Karakolev, one of the authors of the study, what the Czech Republic should focus on if it wants to digitalise successfully.

Jüri Ratas, Andrej Babiš, photo: ČTK/Vít Šimánek

“One very important factor would be education. It is essentially two fold. First, we have quite a lot of ICT graduates and we need to get them into business quicker. Therefore universities need to focus on their education in business aspects. The second is upskilling our employees that are in the +45 age group, since in that group we have the highest gap in skills advancement. That is one thing.

“The second thing I would mention is digitising the government, because that is basically the single most lagging sector in the economy in terms of digitisation.”

What do you expect the two prime ministers are likely to focus on in their digitisation talks?

“I think there is a tremendous amount we can learn from Estonia in terms of digitising the government. They have taken a broad approach, essentially rebuilding a lot of things from zero. For example, 95 percent of Estonians submit their tax returns on line. Whereas in the Czech Republic this number is extremely low.

“They have managed to create a very user friendly service where the government is treating the people essentially as clients and the user friendliness helps achieve these high rates of digitalisation.”

I imagine that even if these things were implemented it would take a long time before they started to pay-off, because obviously you need to get these graduates into vocational training and so on. Is there any rough time frame?

Tomáš Karakolev, photo: archive of McKinsey

“Yes. On the education it would indeed take a long time. What could be quicker is the training of the existing employees in the older age groups. You do not need to wait a generation for that. However, even with graduates, I think you can do this in a few years and it would start taking effect on the cohorts that are entering the workforce.

“In terms of the government digitalisation, that could be super quick. I recently had the chance to look at an example in Germany where they digitised one process – the claims for child benefits. Within three months they managed to take the digital share from two percent to 16 percent.”