Project Description

Digital Transformation of Small and Medium Enterprises in HUNGARY



In this report we examine the level of digital transformation of SMEs in Hungary in compa­rison to SMEs from other EU countries. We take into consideration both the digital business environment (digital infrastructure such as Internet availability and digital skills of human capital) and the adoption of digital technologies. The introduction of digital technologies such as websites, social media, e-commerce, electronic information sharing and cloud computing simplifies and accelerates decision making, allows effective brand building, facilitates transac­tions and makes it possible to reach new customers.





Why is it so important for SMEs to go digital?

Internet and digital tools become a must in the context of the Digital Single Market strategy. The regulations proposed within the DSM greatly enhance the opportunities stemming from successful digital transformation, as well as pose risks connected with losing markets and cu­stomers due to digital business illiteracy. Although the digital revolution affects both ICT and traditional businesses, it puts significant pressure on Small and Medium Enterprises (SMEs) that are relatively more sensitive to global competition occurring within the Internet compa­red to their stronger, bigger counterparts.

Are Hungarian SMEs ready to compete on the Digital Single Market?

Our analysis may suggest that they are in dire need of a digital makeover. Most of the Hunga­rian SMEs make no use of e-commerce tools, cloud computing services and electronic infor­mation sharing tools. The poor digital infrastructure is another burden. But the most striking finding is that Hungarians seem to forget the digital proficiency that they possess and use at home once they enter their workplaces. Hungary ranks first among the EU28 in social me­dia usage by individuals, but only a very small share of SMEs employ social media services to communicate with their customers. The employers also see no need to invest in digital trainings for their workforce. As a result, according to the indicators measuring digital trans­formation of economy and society (DESI), the country takes one of the last places among the EU28 and falls behind other NMS.