In order to facilitate decision-making for faster digital transformation, Microsoft presented the Digital Futures Index research, which shows the level of digitalization in 16 European countries, including Slovenia. With the level of digitization achieved, it highlights areas where individual countries are doing well and those that will need more attention to accelerate digital development. We talked to Barbara Domicelj, Country Manager of Microsoft Slovenia, about where Slovenia performs best and where it has the greatest potential for progress.
Why is this research important for Slovenia?
The Digital Futures Index research shows the current state of digitalization in Slovenia in critical areas such as digital business, digital government and the public sector, digital infrastructure, and human capital. It also helps us compare our development with neighboring countries, as well as with the countries recognized as digitally most advanced, such as Estonia. This allows us to understand better where we are currently in terms of digitization and where we can improve.
Slovenia is generally above average compared to the Central and Eastern European countries. In some areas, such as the digitalization of education, we can also compare ourselves with the most digitally developed European countries. Neighboring Croatia, for example, has good achievements in the field of talent and digital skills; Serbia is above average in the export of ICT services and the share of women employed in the ICT industry. On the other hand, all these countries still have many opportunities for progress in the digitalization of public services.
In fact, digitally advanced countries are also greener, wealthier, more innovative, and more competitive.
We take pride in the high participation of women in the labor market. But the Index reveals this is not the case in the IT industry.
True, we are markedly below average in the share of ICT professionals. Slovenian companies also employ fewer ICT professionals than the regional average. However, they are also more difficult to hire due to the below-average share of graduates who have studied ICT professions.
In order to accelerate digital development, we will need to address this gap between business needs and the labor market situation as soon as possible – also by encouraging more women to pursue ICT careers and promoting retraining, lifelong learning, and on-the-job training. At Microsoft, we strive to inspire girls to take up ICT careers. This month we are organizing an event where successful women in the ICT industry will present their experiences and encourage younger generations to choose STEM education.
Knowledge is becoming outdated much faster today than it used to be. For example, a software developer today needs to update or expand their knowledge every 12 to 18 months. Employees in marketing, sales, production, finance, and so on are increasingly facing similar requirements. Additional training – especially in the field of ICT skills – is essential.
How would you rate the shape of our ICT industry?
ICT companies are a crucial part of the economy in all developed countries – also because they are often the fastest in introducing modern digital tools and innovative business models, thus acting as a catalyst for overall digital development. Slovenia has a great opportunity to promote the development of the start-up sector, as it has promising entrepreneurial talents, and we are already above average in the number of start-ups. We are less successful in attracting investments from venture capital funds, where we fall 21 percent below the average, as well as in the share of the ICT industry in Slovenian exports. As a highly export-oriented country, I believe this result can undoubtedly be improved. Targeted policies and investments can strengthen the growth of the entire digital sector, whose development is strongly correlated with innovation, productivity, and average wages.
How and where can we accelerate digitization?
Today, every company is also a technology company, as digital innovations change business in all industries. Virtually everywhere, business is transforming the power of data, cloud computing, and other advanced technologies such as artificial intelligence. It is certainly true that those companies that perform better in introducing digital technologies will be more successful.
There is quite a bit of encouraging news in this area, as Slovenian companies are above average in digital competitiveness, i.e., the ability to use technology for transformation and competitive advantage. We also know that the use of cloud computing is strongly correlated with innovation and productivity, and we are above average in this area. The key challenge, therefore, is the already mentioned lack of ICT experts. Without such staff, companies will find it increasingly difficult to introduce the most advanced digital technologies into their business.
But the top priority in reducing the gap with leading digital countries is accelerating the digitalization of public services. This will increase efficiency and user-friendliness and encourage more citizens to use digital technologies to strengthen their digital competencies.
Modern technologies also allow for new, more flexible forms of work, such as hybrid work, which gained momentum during the epidemic. Where do we stand in this area?
At the beginning of the pandemic in the spring of 2020, Slovenia recorded the lowest levels of teleworking among countries in the Digital Futures Index. Since then, we have made great strides towards more flexible work, but we are still lagging behind the leading digital countries. Why is this important? Because we know that working groups that are more flexible about how and where they connect and collaborate are more productive and innovative. If Slovenian companies do not switch to more flexible forms of work, they will be less competitive and find it harder to retain and attract talent. Recent experience has permanently changed expectations regarding the culture of hybrid work. Our companies have the necessary infrastructure, but a shift in thinking and organizational transformation is essential. Leaders need to be empowered, the unhindered flow of information within and between working groups needs to be ensured, and new behavioral norms and approaches to measuring work efficiency need to be developed. These changes require new thinking in all business functions, from human resources and IT to sales and marketing.
How is Microsoft helping in the digitalization in Slovenia?
Microsoft Slovenia was founded in 1994 when we set ourselves the goal of offering the power of our software in the Slovenian language. We are still building on this tradition today, for example, by enabling Slovenia to empower developers to take advantage of the opportunities offered by artificial intelligence technologies. All of this is significantly complemented by our local partner ecosystem, which builds on our platforms to bring innovations to both public and private sector organizations. At the same time, we are active in strengthening digital skills. As part of our Global Skilling Initiative, more than 20,000 Slovenians have acquired new knowledge since June 2020 at these platforms – Linkedin Learn, Microsoft Learn and GitHub.
We also complemented the global initiative with a local campaign that brought together as many as 19 stakeholders, including our partners, governmental and academic institutions, and non-governmental organizations. We will continue in this direction in the future.
And how do you see the future?
Slovenia’s development is mainly based on strong export-oriented traditional industries, products, and services. We have many successful and internationally competitive companies; however, in the digital economy, we have lagged behind the leading digital countries and, in some places, also behind some regional competitors. We need to reduce this gap by investing in developing the most innovative products and services with a built-in digital component.
At Microsoft, we believe Slovenia has great potential and good conditions to become a digital role model with the right measures and base its further economic development on innovations and modern technologies. We hope that the Digital Futures Index survey will further stimulate the debate on how to accelerate digital transformation best, as this is a key strategy for raising productivity, wages, and quality of life, as well as for the transition to a more sustainable economy.