Bratislava, 19h of March. Ensuring effective and successful spending from the Recovery Fund is a high-stake challenge for the economies of the Visegrad region. Global think-tank GLOBSEC organized a series of strategic discussions about where the V4 allocations should be channelled to permanently elevate the regional economy.
The online discussions addressed three key areas: innovations, the digitalization of small and medium-sized enterprises (SMEs) and the transformation of the automotive industry. “An effective spending of resources from the Recovery Fund requires a constant dialogue between key stakeholders from the public and private sector, with the goal to identify weak spots and propose compact solutions” commented the GLOBSEC Chief Economist Soňa Muzikářová.
The discussions were attended by representatives from ministries of V4 countries, international institutions such as the OCED, economic think-thanks such as Bruegel, top consultancies and private sector leaders. The participants agreed that innovation fueled by the financial package is key to unlocking the region’s next economic chapter.
Economic transformation 2.0
The Recovery & Resilience Fund (RRF) is an opportunity for V4 countries to lay down the necessary groundwork for making the region more innovative and enabling an economic transformation 2.0. Governments should foster the pillars of the ecosystem, including targeted human capital and R&D bases, unified and functional innovation governance, management, and sufficient public funding. “Governments can additionally promote innovation by “innovating themselves” in both, the way they make decisions and deliver services ” commented Elsa Pilichowski, the Director of the Public Governance Department at the OECD.
The support of domestic research and its competitiveness is also fundamental. Mapping out the current economic complexity of V4 economies, underlying skills and capabilities, can help with identifying where V4 economies can organically expand. The innovation ambition should not be a matter of political cycles, but should instead set a basis for the ecosystem, whose advantages will long outlive the pandemic and the Recovery Plan itself.
Digitalization of SMEs
SMEs, as the heartbeat of the V4 economies, suffered significant losses because of the necessary measures to fight the pandemic. The region’s ability to stay competitive also depends on SME’s ability to adapt to the digital era. “Cooperation between the public and private sectors will be crucial in the digitalization of SMEs, as showcased by many successful examples from abroad. Companies need to get improved access to digital education and services enabling their digitalization, as well as simple access to financing” said Zuzana Pisoň, Technology Stream Lead at GLOBSEC.
Some of the solutions tackling the ailing SMEs in the V4 region today could include investments into digital innovation hubs or a central web platform for the digitalization of SMEs. Innovation vouchers, digital credits or state-guaranteed loans could provide SMEs improved direct access to finance.
Transformation of the automotive industry
The Recovery Fund also provides a solution for the automotive industry, which has been one of the pillars of the V4 economies. The industry today needs to undergo a massive transformation towards shared, connected, and automated electric vehicles. E-mobility is shaping up to be one of the key solutions for emissions reductions in transport. The recovery funding could be used to develop and modernize grid infrastructure, integrate smart charging technology, and enable wider electrification. The new EU funding could also be used to connect V4+ capitals with rapid charging infrastructure, which would become an inspiring example for the rest of Europe.
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