Why technology is key in driving innovation and economic recovery

Europuls – Centre of European Expertise and UiPath, a leading enterprise automation software company organized on the 17th of June an event focused on “The role of technology in driving innovation and economic recovery”, designed to explore how innovative technologies can boost post-pandemic recovery. While the first panel focused on the European Union’s actions that will strengthen the capabilities of Member States on digital transformation, the second panel explored the role of local actors in implementing projects and reforms that will drive economic stability and resilience.

Funding and Innovation – the two key concepts that allow Europe to remain the leader in development, welfare, human rights, digital education and skills

Mr. Dragoș Pîslaru, Member of the European Parliament, Co-rapporteur on the Recovery and Resilience Facility (RRF), highlighted the role of technology in driving the economy. He pointed out that innovation is at the core of the RRF and the EU Member States should use the funds to adopt and integrate new digital technologies. An issue to tackle is the lack of digital skills among EU citizens. When a society relies on and is impacted by digital transformation, the lack of tech skills substantially limits the access to opportunities and causes social exclusion from its benefits. Therefore, the EU needs a digital skills revolution, to provide citizens the framework for upskilling and reskilling in the digital field.

“We need to understand that the optimal way to recover after the pandemic is not just to plug some of the holes that we actually have in our economic activity, but to enhance  our competitiveness at the core. Within the European Parliament we talk about Artificial Intelligence (AI), blockchain technologies, robotics, software automation, and these are increasingly relevant for the labor market industries and the public sector at a European level. These are the tools to become more efficient, increase effectiveness and facilitate the access to services for citizens.”

Dragoș PîslaruMember of the European Parliament, Co-rapporteur on the Recovery and Resilience Facility

All these new developments will require adequate regulation, enabling a framework that sets the context for the private sector to be innovative and create solutions that will redress the economy. Cooperation is needed to put all these pieces together, between the public administration, the private sector, the infrastructure and the political wheel.

Investments, opportunities, programs at the EU level and multi-country projects – the main instruments that allow the economic recovery

Mrs. Andreea Ticheru, Policy Officer, Recovery & Resilience Task Force, European Commission, highlighted that technology is a key enabler for innovation to boost economic recovery. The Recovery and Resilience Facility (RRF) offers an outstanding opportunity to support Member States to recover from the pandemic by adopting new technologies through reforms and investments. For example, in their Recovery and Resilience plans, countries invest in cloud computing and big data, while also making sure that citizens acquire digital skills; moreover, investments in the public services may bring significant benefits to European businesses. Another way to support the recovery is through multi-country projects that are implemented by several Member States and address common challenges via advanced technologies. In this respect, digital innovation hubs or Important Projects of Common European Interest (IPCEI) are just a few examples of how Member States can boost economic recovery. In Romania’s case there are six declarations regarding advanced technologies signed at European level, which underline the commitment of the country to further develop areas such as cloud, microprocessors, high performance computing, blockchain and quantum communication infrastructure. Additionally, opportunities offered by Invest EU, Connecting Europe Facility, Digital Europe Programme and others will shape the transformation of the economy and society in complementarity with the RRF.

“As part of the twin transition, digital transformation is a policy priority and part of the substantial support the EU is directing now towards the Member States in order to support  them to first recover and then speed up growth and bridge the digital divide between rural and urban areas, between regions or Member States, focusing on connectivity, digital-related research and development, human capital, digital public services, digitalisation of businesses, digital capacities and deployment of advanced technologies and greening the ICT sector.”

Andreea Ticheru – Policy Officer, Recovery & Resilience Task Force, European Commission

We need to focus on the importance of the EU’s strategic autonomy and to promote a holistic approach for Romania regarding the digital transformation process

At the national level, in Romania, the society is focused on the transformation of the public sector. The National Recovery and Resilience Program is very important, but the European Commission’s view on the digital transformation brings the real strategic autonomy of the EU, points out Adrian Dan, Advisor to the Minister, Ministry of Research, Innovation and Digitalization.

The European Commission, with the new financial exercise 2021-2027, has expressed a change of paradigm in the thinking and architecture of financing programmes. We see a lot of vertical and transversal integration of technologies; we see programmes that cover everything from the basic, fundamental research to production and innovation and I think that this is very important. We, as a country, have to understand and internalize this transversal vision of the Commission.

Adrian Dan, Advisor to the Minister – Ministry of Research, Innovation and Digitalization

The most important factor that will make the difference remains the private sector. In order to build a competitive economy, Romania needs a coherent vision, national-wide dialogue and close cooperation. Thus, another focus should be on increasing public-private partnerships. The integration of different technologies, the development of networks and digital infrastructure will also be essential to the success.

The cooperation, support, collaboration and trust between the government and the private sector – at the core of an effective digital transformation

Mrs. Bianca Muntean, Manager, Transilvania IT Cluster, underlined the necessity of implementing a plan in order to enhance the private sector’s actions and to build common trust between the central public administration and the entrepreneurs looking to adopt technology. There is a need to see how to orchestrate all the capabilities and all the resources available in the regions and in our country, as one of the main roles of digital innovation hubs is to identify capabilities that can be put to work for a digital transformation of the industry.

Transilvania IT Cluster is implementing several pilot projects in cooperation with local universities, clusters and public administration in order to enhance the regional cooperation, trying to incentivize IT companies to work with local markets. However, there is a consistent need for increased support from the national government.

“It is a lot about collaboration – we have a lot of grass-root information in order to create this digital transformation projects and come up with concrete solutions for the local market, but we also need central coordination and support (…) The companies are really pragmatic, they are waiting for concrete actions to take place; we are prepared, as we have been buiding our capabilities for nearly ten years now, but we really have to see how to walk the talk.”

Bianca Muntean – Manager, Transilvania IT Cluster

The significant role of the private sector in the digital transformation and the need for coherence and unity in order to boost the economy

Mr. Dorin Pena – Director, Romania & CIS Countries, Cisco and Member of the American Chamber of Commerce in Romania (AmCham Romania) Board of Directors and Co-Chair of the AmCham Digital Economy Committee, emphasized the role of the private sector and the need to shift the focus on the development of skills, so that people will not only use new technologies, but also adopt them.

In the public sector, the biggest challenge is the limited capacity of absorption and of implementation of new technologies. Mr. Pena suggested designating a national entity that coordinates the digital transformation effort and that can provide consistency and continuity to the strategy. Moreover, the wider society needs to focus on the absorption of the existing technologies. Skills remain an important element in this process and political unity is mandatory in order to transform Romania on the long term.

If we move to the topic of the digital transformation of the public sector in Romania, I think the biggest challenge is the capacity of absorption and of implementation. We have this great potential created by the National Recovery and Resilience Plan, since 20% of that should be allocated to digital transformation. That’s a huge amount, but if we look at the previous performance of Romania in adopting EU funds, I think we should be very bold in driving this adoption in the new exercise – the National Recovery Plan.

Dorin Pena – Director, Romania & CIS Countries, Cisco and Member of the American Chamber of Commerce in Romania Board of Directors and Co-Chair of the AmCham Digital Economy Committee

The need for shifting the focus on the potential of the specific regions – as a main strategy to efficiently implement technology

The EU Commission presented its vision for the accelerated innovation and economic growth back in 2019 and the outbreak of the COVID-19 pandemic amplified the idea of technology development and rebuilding economy, pointed out Mr. Francisco Barros Castro – Member of the Cabinet of Elisa Ferreira, European Commissioner for Cohesion and Reforms, European Commission.

The most important instruments – the RRF, Horizon Europe – must be used to trigger innovation in the private sector. The EU Commission’s view is that Europe can be maintained as a living economy and as a sustainable social model through innovation. Moreover, when designing the Resilience and Recovery Plans, the national policies should address the real needs and the potential of their specific regions.

With regard to the public administration, one of the main concerns is the need for more capabilities in each Member State. Another issue to address is that a huge part of the population that is digitally excluded. It is a very dynamic sector, so it will be essential to determine how to bring people to technology, instruct them and to keep them at pace with all the changes.

“What the European Commission is proposing is the means to facilitate the transformation that the private sector will have to meet, with supportive public sector interventions alongside. (…) We are developing our industrial policy in the context of an open strategic autonomy. Europe will not solve its problems by closing itself. Actually, it needs to remain open to the world, but in a more assertive way than in the past by not being too naïve while negotiating, but nonetheless building together with external parties.”

Francisco Barros Castro – Member of the Cabinet of Elisa Ferreira, European Commissioner for Cohesion and Reforms, European Commission

The reshaping of internal management of public administration – first step to improve the public services through technology

Mr. Andrei Rigu – General City Councilor at the Bucharest City Hall, focused on the fact that the range and quality of services provided by the local authorities of Bucharest do not match those provided by the private sector. Technology and a faster implementation of it would help the Bucharest City Hall and its institutions to spend less money and be more efficient. However, out of 68 projects included in the National Plan of Recovery and Resilience, only eight regard the digitalization of public services in Bucharest.

The Bucharest City Hall already uses technology to enable digital services, including a database for requests from citizens, a database with decisions of the City Council and General Mayor, a new system for access in the building, a software to correlate traffic lights etc. However, IT companies would immensely help the City Hall to process operations automatically, to implement digital signatures for documents and to use software to track documents. By using such technologies, the local public administration could improve the delivery of public services in order to better meet the needs of citizens, increase efficiency, offer faster responses and reduce administrative costs.

“The Bucharest City hall is more interested in the digitalization of public services but the steps are still tentative. We see some changes like digitalization of access in the City Hall and providing collaborative platforms to work on projects that are intended to be approved by the General Council of Bucharest, but me and my colleagues as City Councilors want to see more from the executive, more digital initiatives and technology usage for the public services provided to the inhabitants of Bucharest.”

Andrei Rigu – General City Councilor, Bucharest City Hall

The adoption of a legal framework – a premise which allows the development of technology and innovation

Mr. Răzvan Atim, General Manager Eastern Europe at UiPath emphasized that regulations should go hand in hand with innovation and that clear rules should facilitate the faster implementation and adoption of technology. At the same time, there needs to be a solid partnership between the private and the public sector, to cooperate in order to achieve a mutual goal which would lead to a better society.

“From my experience and interaction with the public sector, from the private sector, we see a lot of instruments that can be improved to go faster with the technology adoption within the public sector and across the EU, European Commission etc. So, those needs are facilitated by regulations at the EU level. Some regulations would make the processes faster and easier for the private sector to be able to implement technology and, at the same time, for the public sector to adopt technology.”

Răzvan Atim – General Manager Eastern Europe, UiPath

Swift and pragmatic positions need to be adopted, to track the gaps in the process of execution and to solve them, according to the legislation. With regard to the perception of citizens’ interactions with technology, UiPath conducted a survey to assess the appetite for digitalization and the awareness of automation among Romanian citizens. Thus, Mr. Atim highlighted that as long as technology allows us to live better and to get rid of repetitive, mechanical tasks, saving time, it should be welcomed, implemented and it could play a key-role to our existence.

Creating a neutral, innovative space to bring out ideas, to test and implement them – a potential solution in order to achieve a solid cooperation

Mr. Radu Pachiu, Co-Founder of H.appyCities, reveals that, in reality, the COVID-19 pandemic didn’t necessarily accelerate technology adoption, but it incentivized the private sector to find solutions fast and solve problems, when people were suddenly looking for alternative ways. In reality, most of the technological platforms were already there, and what actually happened was that society embraced, implemented and adopted technologies.

According to Mr. Puchiu, a viable solution for Romania would be to create a neutral, but transformative space of innovation, where the public administration and the private sector could work together, building trust and open dialogue and actively engaging all the parties concerned – citizens, universities, private companies and people from the public sector. That would be a place to bring ideas, to test them, to adapt them and, finally, find solutions.

“An idea would be to bring in a neutral space the innovation part of a city to transform the public administration. So, you have a neutral ground to test, to transform, where the public administration can understand, participate and trust what is happening there. (…) This is one solution I propose and I believe it is quite generous in terms of what can be done, with very low resources. So, you don’t need anything basically, it is just a place where you bring you problems to and those people engaged there are coming up with solutions. It can be a transformative place for the public administration especially in Romania.”

Radu Pachiu – Co-Founder of H.appyCities

Thus, it can be said that the adoption and implementation of new digital technologies will be instrumental in ensuring economic stability and resilience, and the cooperation between public administrations, the private sector, the civil society and the academia will enhance the opportunities to deliver better services for citizens, increasing the operational capacity and will provide incentives for renewal and future growth. The EU and its Member States, including Romania, should exploit the genuine potential of digital technologies as drivers for innovation and improvement of the society.

For this event, we were joined by the distinguished speakers:

Panel I:

Dragoș Pîslaru – Member of the European Parliament, Co-rapporteur on the Recovery and Resilience Facility

Andreea Ticheru – Policy Officer, Cabinet of Elisa Roller – Head of Unit Recovery & Resilience Task Force, European Commission

Adrian Dan – Adviser to the Minister, Ministry of Research, Innovation and Digitalization

Bianca Muntean – Manager, Transilvania IT Cluster

Dorin Pena – Director, Romania & CIS Countries, Cisco

Panel II:

Francisco Barros Castro – Member of Cabinet of Elisa Ferreira, European Commissioner for Cohesion and Reforms, European Commission

Andrei Rigu – General City Councilor, Bucharest City Hall

Răzvan Atim – General Manager Eastern Europe, UiPath

Radu Puchiu – Co-Founder, H.appyCities

Authors: Cezara Panait & Silvia Ana Stan

Research Assistants: Andreea Ianoșiu, Andrei Belu, Delia Afilipoaie, Roxana Maria Mocanu, Sebastian Lajos