Mihnea Radulescu, Vodafone: Digitalization is crucial for the Romanian economy

Digitalization is one of the biggest programmes in the National Recovery and Resilience Plan (PNRR), and Romania is one of the countries that has the greatest need for digitalization. From educating the population on the use of technology to digitalizing companies, our country needs programmes at the national level. We are ranked last in the European Union when it comes to the integration of digital technologies, scoring below average on all indicators, which have stagnated or even declined over the past year.

By Aurel Constantin

The authorities have already initiated a ”unique legislative package at the European level,” which should boost digitalization, as stated by Research, Innovation and Digitalization minister Sebastian Burduja, at the third edition of the Romanian Business & Investment Roundtable Conference hosted by The Economist. But the journey is just beginning, according to Mihnea Radulescu, Enterprise Business Unit Director at Vodafone Romania, who noted that the share of SMEs that used at least a basic level of digital tools was 22 percent last year, significantly below the EU average of 55 percent.

"We need to talk more about competitiveness and about the ways technology helps businesses be more competitive. The digitalization of the public sector in Romania is lagging behind, but we must also talk about the digitalization of the private sector. Only 17 percent of SMEs in Romania can be described as digitalized," Radulescu pointed out.

The Vodafone director also argued that digitalization is necessary and mandatory for companies because it shortens time to market, increases productivity levels, and helps companies get in front of customers faster, while offering lower prices. "Digitalization facilitates competitiveness, efficiency, productivity. You have to make yourself known to consumers and be able to offer consumers competitive prices, which can no longer be done without incorporating technology into the everyday life of a company."

Digital Infrastructure

It is also important to note that while corporations are almost fully digitalized, SMEs still have a lot to learn. This is a major problem given that SMEs contribute over 50 percent of Romania's GDP and employ over 60 per- cent of the workforce, according to Mihnea Radulescu.

In terms of digital infrastructure, our country is in a good position, as evidenced by the fact that internet coverage and speed at the national level are very good. The pandemic period proved that we could rely on the digital infrastructure when we needed to work remotely and interconnect. “It took a while to figure out how we could run deals and serve companies without meeting each other. But the technology is not new. Following the pandemic and the multiple other crises or in the context of the war in Ukraine, which has had effects on the energy market, we can see how necessary it is to use technology," Radulescu said.

But infrastructure investment must continue in order to maintain a high level of quality. We are currently relying on 5G technology to build the telecommunications network of the future. "It is essential that Vodafone can install 5G at the quality level we are used to in Romania, which requires a huge level of investment," he added.

“Europe as a whole has lost its leadership in telecommunications innovation, to the US and China. These countries have 2-3 suppliers, while Europe has 120, who are fighting hard over customers and driving down prices, which ultimately prevents the implementation of much needed large investments," Radulescu also noted, adding that it was mandatory to increase investment capacity in order to maintain our competitiveness. "There is a huge need for digitalization and there are enormous sums of money at our disposal from European funds; we must make an effort to access them,” the Vodafone director concluded.