Not the end in itself, but the means to an end!

Digital Economy Development

The DESI Index and what lies behind it: how can a state contribute to making it easier, faster, and simpler to use certain (public) services, and how can it ensure that the widest range of users benefits from the advantages of digitalization?

The answer is more complex than we might think.

Let's look at the basics: what does the DESI Index measure?

Complex digital ecosystems are present in all dimensions of our lives, which implies a limited quality of measurability of the processes and phenomena they contain. It is with this in mind that the European Union (EU) has created the Digital Economy and Society Index (DESI), which measures digital maturity across four (previously five) indicators, not only about each other across EU Member States but also globally to place the EU itself on the map of digital development. In addition to determining the level of digital maturity in a given area, DESI can also be used to get a picture of the impact of decisions and support in areas affected by digitization on social, economic, and governance functioning.

According to the DESI 2022 report published by the European Commission, which measures the digital readiness of EU Member States, Hungary is ranked 22nd in the EU, up one place overall compared to last year. It is encouraging to see that the share of ICT graduates, fixed broadband take-up, high-speed fixed broadband, and 4G service availability are all above the EU average.

For digital public services, the main indicators show a mixed picture. Significant progress has been made on the demand side of eGovernment, with 81% of national internet users having used such services in 2022 (64% in 2019), a 17 percentage point improvement compared to the previous year (EU average: 65%). However, the quality and completeness of services to citizens and businesses remain relatively low, especially for cross-border services, which is of great importance for achieving the Digital Decade goal of making all key public services fully available online by 2030. The majority of Hungarian businesses do not exploit the opportunities offered by digital technologies: only 34% (EU average 55%) of SMEs have at least a basic level of digital intensity (e.g. using an e-invoicing solution is enough).

Regarding digital policies, the national digital roadmap provides the strategic policy framework for 2021-2030. It is an overarching strategy that groups, clarifies, and sometimes complements the measures contained in various other strategy documents. The strategy is structured around the four main pillars of the Digital Decade compass, as measured by the DESI. These are digital infrastructure, digital competence, digital economy, and digital state. Hungary's ambitious and challenging goal is to outperform the EU average in digital development by the middle of the decade and be one of the top 10 EU economies in digitalization by 2030.

What concrete tools and initiatives can be taken to promote these?

Firstly, the widespread expansion of alternative or cashless payment options: increasing the availability and take-up of electronic payment methods supports economic growth and ensures that citizens can choose the payment method that best suits their needs in each payment situation, providing a basis for optimal use of digital services.

But it's not enough just to extend the availability of payment options. Research and global experience with the digital transformation of the public sector show that national governments need to undertake five key tasks to promote and facilitate digital public services and thus the overall digitization efforts of society:

o Define a comprehensive digital strategy and goals

o Provide common IT platforms

o Definition of technical standards

o Establish coherent legislation

o Supporting pilot projects, Proofs-of-Concept to help the public sector build critical digital skills.

Digitalisation and (social) sustainability

The economic sustainability dimension of services is broad. Transparent business models, solutions that generate savings on both the user and the service provider side, offer the opportunity to create win-win deals.

o Digital platform-based solutions with low entry treshold will also be available to smaller businesses.

o The multiplicity of economic actors increases the stability of the economy.

o The impact on economic transparency of the spread of simple electronic payment solutions is not negligible.

o The social sustainability aspects of the various digital mobile services are reflected in the following impacts.

  • It will facilitate access to services, which may ultimately contribute to improving the quality of life.
  • Promote digital equality by enabling a wide range of services to be accessed by simple devices.
  • Providing affordable services to a wide range of people.
  • Improves the digital customer experience through integrated services.

Best practice: the National Mobile Payment System

Digital public services are easier to launch and manage if typical functions and components - such as the possibility to securely log in to an online form, and simple identification - are available as "reusable building blocks" for all relevant organizations. Due to the costs and complexities involved, it is not feasible and, above all, inefficient for institutions to build the necessary technological and management infrastructures themselves. Instead, national governments can help to create common IT platforms that can be used by all relevant institutions.

A good example is the National Mobile Payment System (NMPS), operated by the National Mobile Payment Plc. as a central platform, which allows the payment of public parking, the Hungarian motorway toll, and the usage-based toll, as well as the purchase of tickets and season tickets for local and interurban public transport by mobile phone. The large number of customers reached through the NMPS platform (currently approximately 6.5 million users), a large number of partners (138 operators), and resellers involved in the service, and its complexity, make the NMPS a significant economic development, digitalization, and digital education tool. The cashless mobile payment concept, the transparency provided by the services, the up-to-date and transparent accounts, reports, analyses, and the customer support provided by the service offers significant added value and cost optimization opportunities for the service partners connected to the platform.

Returning to the payment options, the Mobile Transport Ticket service operated by National Mobile Payment Plc., for example, is making a very dynamic contribution to the shift from cash to electronic payments and, through this, to economic growth and digital economic development.

In general, the platform promotes social, economic, and environmental sustainability in the overall social digitalization processes, provides significant facilitation for Hungarian and foreign users without discrimination and entry barriers in many areas of everyday life, and encourages its customers to adopt cashless, paper-saving - and thus environmentally friendly - solutions. This is, let's face it, one of the possible directions - if not the only one - toward a truly liveable, sustainable future!





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