TECH SCALEUP ECOSYSTEM: ROMANIA VERSUS POLAND

While still in its infancy and still developing and aspiring to be more like mature ecosystems such as London or Berlin, the tech startup ecosystem in Romania and Poland should be taken into account when looking at the European entrepreneurial scene.

By Claudiu Vrinceanu

In the tech area, companies seem to be less affected by the current crisis

The first step the Romanian tech ecosystem should take is to catch up to the Polish environment, and we should start with the financing ecosystem. Poland and other developed countries have everything they need: ideas, motivation, enthusiasm, world-class engineers, and more money. But how is Romania doing in terms of financing for companies with growth potential as compared to Poland?

1. INVESTORS (337 VERSUS 97) While Poland has a total of 337 investors, mainly investment funds, only 97 investors are active in Romania today, according to Dealroom data. For example, the largest investment fund in Poland is MCI Capital, which invests on average between EUR 5 million and EUR 50 million and so far has had 55 rounds of investment. This investment fund has invested EUR 544 million in Polish companies. Innova Capital is the second largest fund in Poland, based on the number of transactions, with 49 investments, totaling EUR 13.9 million. For comparison, of the 97 investors, GapMinder is the fund with the most investments in Romania, namely 39 transactions, with a total value of EUR 29.3 million. By the number of investments, the second most active financing vehicle is Gecad Ventures, with 18 investments, totaling EUR 20.5 million.

2. FUNDING ROUNDS (1,376 VERSUS 355) While Poland can boast of 1,376 rounds of investments, only 355 financing rounds by private investors have been concluded in Romania in recent years. On the local market, eight teams raised financing in Q1 2020 and 15 tech startups and scaleups closed or announced deals in Q2 2020 (the first full quarter of pandemic times).

It is difficult to know how long the economic downturn caused by the coronavirus will last, but the amount of venture capital funding for Romanian tech startups during the first semester looks satisfying. The level of investments is comparable with pre-pandemic times, but almost all investments had their negotiation roots before March 2020. Is the current situation quite as gloomy as the previous crises for Romanian tech fundraising? For a realistic assessment of venture capital landscape, we should look at the evolution of deals in the next four months.

In the tech area, companies seem to be less affected by the current crisis, but it is clear that we are about to see a resettlement of the market. Investment fund managers expect that in the near future – though not the very near future – founders will try to tell their stories in a different way, addressing risks that could arise.

It is important that these risks are not kept hidden, but communicated to others and understood.

3. EXITS (366 VERSUS 116) The number of exits made by entrepreneurial companies has risen to 366 in Poland is recent years, while in Romania this number is 116. Two notable exits have taken place lately on the Romanian market. First, the gaming and software testing company Whyttest, founded in 2014 by entrepreneur Marius Potirniche, was acquired by British quality assurance (QA) service provider Testronic, part of the Catalis group. Second, investment fund Abris signed a new investment in Romania, having bought the Romanian branch of Hungarian company Eltex for over EUR 5 million, through a firm belonging to Romanian holding company Green Group, the owner of the largest integrated recycling park in Southeast Europe.

Six types of foreign investments that continued in Romania despite pandemic

Foreign direct investment (FDI) into Romania has seen a sharp decline due to the COVID-19 crisis, with the country narrowly avoiding recession. Still, we could look at the full side of the glass in the current conditions and celebrate the foreign investments that did come to Romania during the pandemic. We’ve selected six types of foreign investments which were announced or closed during the first six months of the pandemic – between March and August 2020.

By Claudiu Vrinceanu

Swedish plastics manufacturer Rosti Group, which already has a factory in Ploiesti, expanded its operations on the Romanian market with a new production unit. The new unit is located just a few kilometers away from the existing factory in Ploiesti West Park, which the Swedes bought from Nimbus Investments in 2015. The factory will have an initial area of about 11,000 square meters, more than double compared to the existing unit, and will produce injection-molded plastics for the automotive industry as well as custom materials. The new unit is located in Paulesti, near Ploiesti. A new investment of EUR 50 million, near demic, especially since it will create around 700 new jobs.

Specifically, the largest household appliance company in China, Haier, is preparing a huge investment in Prahova, at Aricestii Rahtivani. Production of Rosières ovens, an emblematic brand of French know-how and gastronomy, will be moved to Romania following the investment. had bought Movial, a Romanian software engineering and design services company focused in mobile and embedded devices. Through this investment, the Movial office in Iasi will become Microsoft’s fourth technology development centre in the region.

4. R&D INVESTMENT Continental Romania has completed works to expand its research and development centre in northeastern Iasi, in which it has invested EUR 27 million.

The new construction has 8 levels, a capacity of up to 1,700 places, and comprises a complete testing and validation area for products developed within the company, as well as relaxation spaces, conference halls,

IT is one of the sectors which attracted investments during the pandemic

1. NEW FACILITY INVESTMENT 2. GREENFIELD INVESTMENT Ploiesti, got a lot of attention despite the pan

and dining halls. 5. REGIONAL HUB INVESTMENT German water pump system producer Wilo has invested EUR 6.9 million in building a regional headquarters in Otopeni, near Bucharest.

The company will use this office to manage its operations across ten countries in the region.

6. SCALING UP INVESTMENT German group Bosch inaugurated the new headquarters of the Bosch Engineering Centre in Cluj-Napoca, scaling up its operations in Romania. The investment in the new centre was around EUR 30 million.

The new building has a total built area of 17,500 sqm, with over 10,000 sqm of modern and customised office space, and hosts 500 employees.

How six months of the COVID-19 pandemic changed Romania’s business environment

Six months have passed since Romania imposed a state of emergency on March 16, 2020, a moment that represented a trigger for a series of profound changes in the business environment. Many new trends have emerged and are influencing the way we work, communicate, and grow.

By Claudiu Vrinceanu

1. WORK FROM HOME - OR RATHER WORK FROM ANYWHERE (WFA) It is already clear that the COVID-19 pandemic has fundamentally changed the way employees work, and their presence in office buildings has quickly been replaced by working from home, which will soon turn into work from anywhere, in places where working seemed impossible a year ago. According to specialists, the return to office buildings is unlikely in the near future, and as more employees now working at home will want to temporarily change of scenery, companies must be prepared in terms of internal communication and organisational culture for the moment when we will witness the paradigm shift from “work-from-home” to “work-fromanywhere”. Once the pandemic passes, many Romanian managers will prefer a hybrid system, from home and the office.

2. CROWDFUNDING AND ANGEL INVESTING One problem that has become apparent over the last six months is that founders need people who believe in them from the early stages and provide capital, advice, and networking. Meanwhile, many investors and funds tend to wait until companies show visible traction. Therefore, there is a lack of funding space that is starting to get covered by business angel investors and crowdfunding platforms. The number of angel investors in Romania has increased; now complementary teams need to be created with a product that has a viable go-to-market strategy.

3. DIGITIZATION, DIGITIZATION, DIGITIZATION More and more studies are showing how the coronavirus crisis has accelerated digital development. The move to remote work, online ordering, and the use of cloud IT resources

The current outbreak accelerated the digitalization in many sectors

have led to an explosion of digitalization, but this process is still just beginning for two reasons: first, the public administration is only now taking its first shy steps to cut red tape, and second, there are many companies in the business environment with turnovers between EUR 500,000 and EUR 2 million that need digitalization, but do not yet have the required budgets to begin the process.

4. NEW CONTENT PLATFORMS Given that the number of events we can take part in will decrease in the next 12 months, and that managers and entrepreneurs will be increasingly reluctant to attend large networking actions, they will invest more in creating content to develop personal brands in order to expand their business networks. New platforms are now more accessible to Romanian managers and founders: blogs, professional newsletters, LinkedIn, and podcasts.

According to a BRAT study, 37.8 percent of Romanians aged between 16 and 50 – that’s 3.2 million people – consume online audio content in a podcast format. 5. MORE STOCK OPTIONS PLAN PROGRAMMES During this period, the attractiveness of Stock Options Plan (SOP) programmes increases for entrepreneurs, especially in the context of COVID-19, given that certain benefits and salaries can no longer be paid out in the current economic context. A SOP programme is a tool to motivate and reward a company’s staff. Specifically, employees are given the right, at a future date, to choose to purchase company shares at a preferential price – or even get them for free.

6. MORE GROCERY AND RESTAURANT DELIVERIES At the global level, more and more tech startups are promising to deliver groceries within less than an hour. Restaurants in Romania, including City Grill, one of the strongest players of the local restaurant industry, are adapting to new market conditions and pivoting. Home delivery was one of the main drivers of the restaurant and retail business during the COVID-19 pandemic, and this trend will continue to grow.

Apa Nova transitions to responsible 21 st century capitalism

With a massive investment of EUR 367.9 million in Romania by November 2037 based on a Master Plan approved last year by the General Council of Bucharest, Apa Nova is committed to better respond to the needs of the city. BR sat down with Madalin Mihailovici, the CEO of the company, to learn about the main targets of these investments over the coming years.

By Anda Sebesi

The major European capitals have experienced accelerated development in recent decades, and new urban needs require radical changes in building construction, road infrastructure, and utilities. For example, water and sewerage systems are challenging for large operators in all major European cities, not just for us, due to their age, but also because of the architecture of historic centres, and climate change and increasing populations make operating them increasingly difficult. The issues the sewer systems face when it rains heavily are not just specific to Bucharest, but also to cities like Vienna, Paris, Warsaw or Rome, whose streets turn into little Venices when the sewer network is at capacity.

However, climate change and the new needs generated by urban development are putting increasing pressure on the operating system, challenging it on multiple levels. To solve such problems, massive investments are required to respond to the city‘s development and to maintain the comfort of the people living in Bucharest. Therefore, Apa Nova has committed to invest EUR 367.9 million in its system by November 2037. Water system infrastructure development and digitalization are significant and necessary steps towards placing Bucharest on the European smart city map, and Apa Nova is working tirelessly to

How can Apa Nova contribute to the smart city concept and what are the biggest challenges related to Bucharest’s water infrastructure?

achieve these ambitious objectives. You have announced a EUR 367.9 million investment, based on a Master Plan approved last year by the General Council of Bucharest. Let’s take them one at a time. Where will this money come from and when will the funds become available? And what does the strategic investment programme include? The investment plans were announced as a result of the General Council of Bucharest’s approval of an extension to the Concession Agreement. At the beginning of August, Apa Nova and the Bucharest Municipality signed a 12-year extension of the Concession, until 2037. Therefore, the partnership between Apa Nova and the Bucharest City Hall will continue to the benefit of over 2.2 million residents, providing them with high quality water and sewerage utilities, under safe conditions.

More precisely, through this contract extension, Apa Nova is making a financial commitment of EUR 367.9 million – with immediate access to these funds – which involves the implementation of a multi-annual investment programme worth EUR 230.9 million, but also additional expenses summing up to EUR 137 million for the water and sewerage infrastructure. Four main strategic investment pillars worth EUR 230.9 million have been identified. The extension and modernization works, meaning a total of 682.5 km of water and sewerage system, will cover 1,915 streets across Bucharest, and will run over the course of the next 11 years. The first pillar aims to reduce flooding risk in central and depression areas and includes investments of EUR

89.9 million. This entails building 94.3 km of rainwater and domestic sewerage, to benefit 793,000 Bucharest residents. The works cover 270 streets in key areas, such as Tineretului, Vacaresti, Pallady, Colentina, Muncii, Fundeni, and Dobroesti.

The second pillar foresees reworking the water infrastructure to meet current and future needs, with a project worth EUR 57.75 million. Over 364 km of new water networks will be built, and they will benefit 645,000 Bucharest residents. The works will take place on 1,349 streets, including the Historic Centre, and will be completed in 2031.

The investment programme also includes the expansion of water and sewerage networks according to the urban development plan in order to create conditions for the sustainable growth of the metropolitan area and ensure access to public utilities on unregistered and unsystematized streets. The total value of this multi-annual programme amounts to EUR 81 million and aims to expand the water network by 132.8 km and the sewerage network by 91.4 km. These investments will benefit 370,000 new and current Bucharest residents on 296 streets in areas such as Odai, Sisesti, Prelungirea Ghencea, Berceni, Uverturii. This project’s main objective is to provide every street in Bucharest with access to utilities by 2025.

The fourth pillar refers to increasing the safety of the water supply system in case of emergencies (high-intensity earthquakes or other types of catastrophes) and it will see a EUR 2.2 million investment. The project includes the construction of 35 deep wells distributed across all districts. This project’s deadline is 2025.

This multi-annual investment programme will guarantee a fixed tariff for water and sewerage services throughout this period. For this EUR 367.9 million investment, the current tariff remains unchanged, and one of the lowest in the country (43rd place out of 45 main operators in Romania). Currently, the company’s tariff for water and sewerage represents 1.14 percent of the commodity bundle of Bucharest residents - one of the lowest in Romania and even in the European Union - and the maximum limit for this service is 3.5 percent of the market basket.

If you drew a line, how would you translate these 20 years in terms of results for the company, and also for Bucharest? And what is the total value of investments? The company’s daily performance is evaluated based on the 23 standards for service quality stipulated in the Concession Agreement, which function as criteria for monitoring our technical and commercial results. For 20 years, all these obligations have been fully met. The network’s 78.4 percent efficiency rate is surpassed only by Vienna and Berlin’s, but the tariff in Vienna is over 2.8 times

higher. Another important factor is the degree of satisfaction of Apa Nova customers, which is currently at 88 percent, and increasing every year. In the 20 years Apa Nova has been responsible for the water and sewerage system, the water has been 100 percent potable, the number of connections has almost doubled, over 39,000 smart meters have been installed, the repair time for a fault is generally around 6 hours, there have been no water outages longer than 24 hours, and the network has been extended by over 700 km of new pipelines. And, finally, the tariff charged by Apa Nova has remained one of the lowest in Romania and the European Union. Over these years, the water supply and sewerage system have been rehabilitated, modernized, and developed according to the best industrial practices in the field. These achievements are the result of investments exceeding EUR 530 million, which have been allocated from our own sources, without any European funds. What are your goals for the coming years? The company’s main objective for the next years is to provide safe essential services for the capital city every day. This would not be possible without a continuous digitalization process, and the company will allocate EUR 7 million to create a digital ecosystem.

Apa Nova must respond in real time to current market conditions, to the evolution of technology and the imperatives of Romanian legislation, in order to ensure high quality and safe public services.

In 2015, it became clear that a radical shift was needed at both the management and operational level to improve the KPIs the company had committed to in 2000, upon signing the Concession Contract.

Following the complex business transformation process, the company kept 6 hierarchical levels (compared to 11 initially), simplified intra-departmental communication and developed a new and improved organisational architecture, which has increased efficiency and built a solid, progress-oriented digital culture. Following the worldwide success of the Apa Nova project – which won first place in the “Best Business Transformation Project” category at the 2019 edition of OPEX Week - Business Transformation World Summit (Orlando, FL) – Veolia Group decided to extend the project to the next level: identifying and capitalising on synergies between all Veolia companies in Romania, under the name One Veolia.

All business processes aimed at this expansion – as a first wave – are already aligned and standardised, and by the end of 2020 they will all be implemented.

Once this happens, the company will be placed in the Continuous Improvement phase.

The quality and precision with which continuous improvement processes are designed and executed are essential for the company’s progress and alignment with the globally adopted Veolia goal: the transition to responsible 21st century capitalism.

Adaptability is at the core of Euroins Romania

How is Euroins currently positioned on the Romanian insurance market? Euroins Romania, part of the independent European EIG insurance group present in Central and Eastern Europe, is amongst the top insurance companies, ranked third on the Romanian market, with a market share of 12.26 percent in Q1 2020. Euroins develops a strategy to strengthen its position through innovation and by adaptating to continuously changing market conditions

The increase in sales on a yearly basis shows the dedication of our customers to the available insurance products. Innovation, seen through through new products designed to meet the changing needs of customers, the company’s growing capitalisation, are all elements that complete the company’s vision of Euroins. Just a few days ago, we had a strong capital increase worth almost RON 100 million. It is important for everyone to know that 2020 is the year in which Euroins innovated, setting new examples of good practices for the Romanian insurance market, and showing everyone that despite the extremely complicated times in which we live, Euroins is a stable, constantly growing company• It is important to stress, and I believe market Coleta Chirita, member of the Euroins Board of Directors, tells Business Review about the way 2020 has impacted the company and how it has managed to surpass challenges and innovate in order to provide a better experience to clients.

By Anda Sebesi

stakeholders would agree, that 2020 is a year when Euroins accelerated on the innovation path, setting new examples of good practices for the Romanian insurance market. We have also showed resilience during these tough and complicated times and proved that Euroins is a robust, stable and growing company. And despite the fact that every year brings an increase in the number of customers, employees, and offices, Euroins has remained extremely flexible and we have been able to adapt easily. It also helps that we are part of a strong international group, as we can learn from our colleagues, but at the same time, we are the ones who have the opportunity to open up new paths..

What have been the biggest challenges this year for Euroins and what positive impact have they had on the company? The coronavirus pandemic is, for every company, a crucial test of adapting to the new reality. From the beginning of restrictions, the company was among the promoters working from home, ensuring continuous presence in all departments. Constantly focused on meeting the needs of its customers, Euroins has developed a IT applications which have provided customers and victims the opportunity to digitally report information on damages related to their insurance policies.

What can you tell us about Euroins’s degree of innovation and how it is reflected in the company’s products? Euroins anticipates market needs, and also responds to them in an effectivelmatter.. Therefore, we are developing complex and competitive insurance products that meet both general and niche needs. As an example, this summer we launched a truly audacious travel insurance product: RON 25 to cover travel risks for the whole family and for an unlimited number of trips in Europe, for the entire summer season, until September 30, 2020.

Can you give us some examples of good practices on the Romanian insurance market which Euroins has generated? Permanent customer orientation, transparency in communication, and the continuous development of internal processes and digitalization are just a few of the practices meant to increase the quality of our services. In this way, we can proactively respond to market needs. We believe that the future lies in digitalizing and streamlining interaction by automating processes, as we have already implemented a number of improvements of the claim management process, call center, scheduling, and online notification of MTPL claims. These actions are just the beginning of a long process of facilitating and continuously improving the interaction with our clients, both policyholders or claimants. The digitalization of interactions and relationships with customers is undoubtedly one of the main opportunities for development in the sector.

It is more important than ever for every client to know that they can rely on their insurance company, that they don’t need to do any extra travel, that you are not out of their way, that you do not mean more bureaucracy. Because there is still a misconception affecting the entire market, with people thinking the process is complicated, that there’s no point in having insurance if you’re not lucky enough to get in touch with insurance people who really want to help you.

The future belongs to those who will be able to adapt to different contexts

What will future banking jobs look like? I think that the banking sector is at an important tipping point and it is migrating towards a new era, making the shift from the traditional model to a more digitalized one. However, my opinion is that banking will remain a business made by people for the people, while being supported and improved by the use of data and technology. Therefore, I think that future bankers will not be much different from what they are now. But in the context of the migration from the traditional organisational models to agile ones, the ways in which people from different areas of the bank (regardless where they are located in the business flows, whether it’s product management, IT, risk, operations, legal or compliance) will manage to collaborate and co-create effective solutions adjusted to the current needs of our clients will be essential.

How will jobs in this industry be structured? The job structure in the banking industry will change and we will have more people focusing on understanding the needs of clients and advising them. Meanwhile, traditional customer service channels will be moved to other areas like contact centres or online. Considering all the things mentioned above, we’re certainly seeing an increased number of IT specialists in banking compared with what we had in the past. In the last two or three

years, this has been a trend in the banking system. At BCR, we have a team of 500 IT specialists out of a total of 6,800 employees. We are in line with trends in the local banking sector as we’ve continued to hire since the beginning of 2020 in order to grow this team.

What role will technology play in this change, in both retail and corporate banking? In order to keep up with international trends in the banking industry and meet the expectations of its clients, the Central and Eastern European banking system is becoming increasingly advanced when it comes to technology. Hence, we’re introducing a lot of digitalization in our processes and this generates a re-evaluation of BCR’s culture and organisational structures. Where processes are standardised, technology will continue to help us. But in both the retail and the corporate segments, trustworthiness, promptitude, and the professionalism of bankers will continue to be the main features making the difference on the market.

How accelerated is the digitalization process in the Romanian banking industry right now? The future belongs to those who will be able to adapt to different contexts. In this case, the it belongs to digitalized lenders who come up with rapid solutions and anticipate the needs What will jobs in banking look like in the future? Will they be totally driven by the rapid technological advance we’re currently experiencing? Andreea Voinea, executive director in the BCR HR division, sat down with Business Review and explained the new structure of banking jobs and the main traits of future leaders in this industry.

By Anda Sebesi

of their consumers. The competition is quite fierce in this field in Romania and this comes on top of a “struggle” to find talented candidates in this sector. Today, we can say that the situation generated by the coronavirus crisis helped us because it accelerated the digitalization process. Both we as a bank as well as our clients were somehow forced by the circumstances to move towards remote banking. For example, BCR has 137,000 fully digital George accounts and 24,000 loans have been offered online so far.

What will future banking leaders be like, considering that the digitalization process is getting stronger? The ability to adapt to change has always been a must for a leader, and now I think it is more important than ever. Future leaders are among us. Some of them are already high performers in their roles, others are training for this. I strongly believe in balance and to me it seems natural for a leader to keep the usual attributes of a good manager but also to adopt the agile approach – a more human one – which we all need during these times. Leaders who adapt quickly and know how to coordinate their teams towards new ways of working will stand out from the crowd.

Digital Transformation as catalyst for accelerated crisis recovery

One of the most important lessons learned from the COVID-19 pandemic was that no business is immune to a crisis and no organisation is 100 percent resilient. The crisis also taught companies that digital businesses and those fortified with some digital capabilities have been able to pivot more rapidly and respond to their customers’ needs. Business Review talked to Daniel Rusen, Director of Marketing and Operations at Microsoft and Adrian Georgescu, Enterprise Commercial Lead at Microsoft, to find out how a big company managed to deal with the pandemic crisis and with the uncertainty of the global economic climate.

By Aurel Constantin

Adrian Georgescu, Microsoft

During the pandemic, companies found that resilience, the ability to adapt quickly to changing conditions, has become the hallmark for success in today’s environment. For many companies, adapting to change makes the difference between staying in business or going bankrupt. Today, to adapt also means to digitally transform your business.

Daniel Rusen, Microsoft

“Organisations that have already embarked on their transformation journey are seeing the benefits. With cloud-enabled technologies, they have access to on-demand tools and capacity tailored to their needs. With scalability and speed of implementation, they’re seeing higher cost savings. And with efficient, agile, and self-sufficient tools, their employees are staying productive across the entire organisation. These companies have been able to quickly respond as this crisis has impacted their industries, they have a solid foundation for recovery, and they’re already starting to reimagine what the future may bring,” says Adrian Georgescu.

An example of a Microsoft client is a large bank from Romania, which is moving its auxiliary and core-banking systems to the cloud and continuously working to embed new technologies and innovations in their core systems. The bank managed to rapidly adapt to the new reality and support SMEs across Romania and Eastern Europe. “Technology is embedded in their strategy and as they continue to transform, they become more resilient and unlock new value for customers,” Daniel Rusen explains.

For the private healthcare network Regina Maria, tech adoption allowed a rapid deployment of Telemedicine solutions in less than 10 days. Hit hard by the state of emergency that kept patients out of their clinics, with support from Microsoft and Softeh, the company put up an online medical consultation solution that covered 50,000 sessions in the first two months. Employees from more than 1,500 companies used the solution and over 5,500 patients used it for their annual check-up.

“There are many challenges that businesses face when going digital and fortifying themselves with digital capabilities to improve their resilience. Interestingly, the

root cause of many of the challenges customers face most often is also the potential solution – data,” argues Daniel Rusen. Data is generated by virtually limitless sources, and the pace of data growth is only increasing. IDC estimates that by 2025 the world’s data will grow to 175 zettabytes – that’s 175 trillion gigabytes. “To put that in context, imagine putting that much data onto Blu-Ray discs. You’d have a stack of discs that could get you to the moon twenty-three times. That is also a 9 percent increase over the same prediction made a year ago. When it comes to generating data, we’re even outpacing our own expectations,” says Rusen.

With all this data, the challenge organisations are facing is not just how to deal with the volume; it’s also finding ways to generate new customer value by leveraging that data. That’s how organisations become industry leaders. “For all these customers and more, the key question was, how can they transcend product and data siloes in order to achieve their purpose-driven digital transformation? To answer that, we have worked in the concept of a digital feedback loop, which allows companies to cover new layers of innovation as they implement technologies,” Rusen explains.

TRANSFORMING CAPEX TO OPTEX AND MINIMISING UPFRONT COSTS Digital transformation can help companies achieve cost savings and business value. Using the cloud allows them to transform CAPEX (capital expenditure) to OPEX (operating expenditure) through solutions that enable them to leverage pay-per-use models and avoid upfront investments. Meaning that it is cost-effective to pay a monthly fee per user for a certain software or app than to invest in licensing the software from the beginning. “This allows you to shift investments from IT infrastructure to core-business and to create new value for your customers,” says Georgescu.

Consolidating solutions to a single vendor has always been a strategy to enable costs savings. Right now, technology makes this easier than ever. For example, migrating IT infrastructure to the cloud enables cost optimisation in server maintenance as you do not need to worry about keeping data centres and hardware up and running. Your cloud provider does that. In addition, companies can leverage technologies available only in cloud, like Artificial Intelligence, which gives new insights into businesses and helps you provide better services to your customers. Costs of risks from cybercrime increased to from USD 600 billion to USD 1 trillion in 2019 so it makes sense to reduce your cost of risk with built-in, defense in depth security available in cloud.

There are several examples of companies that have used cloud solutions. GSX built logistics and supply chain to optimise British American Tobacco’s spare parts process. The solution provides insight into its current acquisition needs and then delivers a more efficient way to fulfil the order internally. Building and running the algorithm on-premise would have required a huge investment in raw processing power. GSX then moved the process into Azure with the help of local Microsoft experts Zitec, which made a radical difference. “With our new software and the help of Azure, searches can now be completed in 15 minutes,” Rusen notes. In less than one year, the solution delivered more than USD 12 million in savings.

THIS CRISIS IS DIFFERENT In 2008, the crisis began with the disruption of the US real estate and financial markets and only spread to the financial and real economy in the rest of the world after a certain period. The COVID-19 pandemic is exerting a more radical and abrupt effect, and it’s hitting many industries harder than the 2008 financial crisis.

But as societies reopen, it becomes apparent that the economy in July will not be what it was in January. Increasingly, one of the key steps needed to foster a safe and successful economic recovery, besides tech adoption, is expanded access to the digital skills needed to fill new jobs.

In just a few months, COVID-19 caused a massive demand shock, setting off job losses that far exceed the scale of the Recession from a decade ago. The world will need a broad economic recovery that will require the development of new skills among a substantial part of the global workforce.

According to Microsoft calculations, global unemployment in 2020 may reach a quarter of a billion people. It is a staggering number. The pandemic respects no borders. In the United States alone, the Congressional Budget Office estimates that the country may witness a 12.3 point increase (from 3.5 percent to 15.8 percent) in its unemployment rate, equating to more than 21 million newly out-of-work people. Many other countries and continents face similar challenges.

In the shorter-term, COVID-19 will continue to lead to unprecedented reliance on digital skills. In many situations, some workers may spend several months or longer in a “hybrid economy,” where some will be in the workplace while others continue to work from home. The shorterterm “hybrid economy” is a more digital economy. The economic recovery will take place amid the longer-term and already-unfolding wave of automation based on the new technologies that underpin what some have called the Fourth Industrial Revolution. “Over the next five years, we estimate that the global workforce can absorb around 149 million new technology-oriented jobs,” says Rusen. Software development accounts for the largest single share of this forecast, but roles in related fields like data analysis, cyber security, and privacy protection are also poised to grow substantially.

Romania is estimated to have a capacity of 645,000 new technology jobs in the next 5 years (by 2025) with more than 400,000 in software development and 100,000 in Cloud and Data roles.

Violeta Luca, Microsoft Romania: Learning is a lifelong process and skilling is an essential element of any professional career

Around the world, 2020 has emerged as one of the most challenging years of our lifetime. In just six months, the world has endured multiple challenges, including a pandemic that spurred a global economic crisis. One of the keys to an inclusive recovery are programmes that provide easier access to digital skills for people hardest hit by job losses, including those with lower incomes, women, and underrepresented minorities. Business Review interviewed Violeta Luca, General Manager of Microsoft Romania, to find out what skilling means for people today.

By Aurel Constantin

Considering the COVID-19 situation, which led to many changes in the way we all work, how important is employee skilling or learning new things for the job you have or the one you want to have? Violeta Luca: I believe learning should be a lifelong process, so I would say skilling is an essential element of any professional career at any time, not necessarily just during difficult times. After all, when you learn more, you can do more, and you can achieve more. That said, a solid skillset definitely represents a competitive advantage on the job market and while managing one’s career path, the focus should be on developing skills, keeping the three horizons in mind – the short, medium, and long-term impact. As for which to prioritise, I believe that the answer depends very much on the individual situation, but creating value for stakeholders is paramount at any given moment. What is different now is that we have all been propelled into the next stage of the digitalization of collaboration by the pandemic – with remote working, online collaboration, and such – and it is very important for an employer to provide the necessary skilling opportunities for employees to adapt. Not only that, but this new work landscape also holds not just the key to survival, but also important opportunities for the development of a company. And those opportunities will be unlocked when employees have the knowledge and skills to make the best of them.

What skills should any employee learn to secure a role in the work-force of tomorrow?

Going forward, I think communication will be an essential skillset in any job – as technology and circumstance encourage remote work and collaboration, we will need to improve our abilities to listen, understand, and make ourselves understood, at any job level. Furthermore, I believe that having strong project management skills is extremely valuable in an environment that is more complex, dynamic, with many interdependencies and multiple stakeholders. In many cases, “getting the job done” requires excellent project management and orchestration capabilities.

Another element is something I like to call “digital awareness.” That is a general knowledge of how digital systems interact and function. I’m not saying we should all be engineers, far from it, but like professional drivers have a general notion of how an engine works even if they are not able to repair it, so too a user of digital tools should have a notion of the principles behind them. This will allow them to use them at maximum capacity.

Should companies invest more in their employees’ education? How does upskilling help businesses survive? Obviously. Helping your employees develop is one of the best things you can do as a company – both because you benefit directly from increased productivity, but also because you add value to their lives and establish beneficial relationships. Retaining valuable employees might become a challenge sometimes, and it’s definitely not enough to be able to provide a good job. In my view, a company should build a more comprehensive set of benefits, paying a great deal of attention to culture. In my experience and considering today’s needs, an employer that drives loyalty and overall favourability is one that creates the time and space and provides resources to enable continuous education.

In this respect, and at the same time in response to the global economic crisis caused by COVID-19, Microsoft recently launched a new global skills initiative aimed at bringing more digital skills to 25 million people worldwide by the end of the year. It is our belief that expanding access to digital skills is an important step in accelerating economic recovery, especially for the people hardest hit by job losses.

This initiative includes immediate steps to help those looking to reskill and pursue an in-demand job and brings together every part of the company, combining existing and new resources from LinkedIn, GitHub, and Microsoft.

The digital transformation of the economy is underway and has accelerated since the start of the pandemic. How important is the process for the overall economy as well as for companies? It’s essential. It was a natural, almost organic response to a very real need, and it transformed the way work is being carried out on a global scale. But that was reactive – a solution to a problem. What is important now is how we can build on that, how to take that next step and make it the beginning of a transformation that carries us into the future, and doesn’t just solve the problems of the present.

SMEs were badly hit by the crisis. What should they do to avoid bankruptcy and how can digitalization help? I think digitalization can greatly increase a company’s agility – and if we are talking about SMEs, their smaller size coupled with digital transformation can make them

amazingly flexible. Digital tools can help you reduce costs without decreasing productivity, can help you create and scale new products and services quickly, can open up communication to new audiences, enable new sales channels, and so on. The decision to transform the business model using digitalization is absolutely needed and has the potential to drive extremely positive outcomes. And let’s not forget that sustainability relies on vision, perspective, strategy, and execution, and more importantly is driven by amazing and empowered people.

Local startups looking to bridge gap between tech and agriculture

The potential digital transformation of more than 3.4 million farms in Romania could spur the creation of numerous startups that could tackle some of the biggest challenges impacting Romanian producers and pave the way for the smart farms of the future.

By Ovidiu Posirca

While European officials are exploring the way in which investments in robotics, 5G, and Artificial Intelligence could improve the efficiency of farming, the local market is still grappling with insufficient knowhow and capital to invest in the latest technologies. “I think that technology startups targeting this sector of the economy are joined by established AgriTech providers in facing a major hurdle, i.e., a minute market caused by limited demand for technology from the Romanian agricultural sector. This is in part due to a gap in the overall strategy for public subsidies, as short term support is mostly targeted at immediate expenses and emergency relief, while long term support is mostly aimed at equipment acquisitions, without any targeted funding for investment in novel technologies, such as those needed for digital transformation,” Daniel Rosner, programme manager at Innovation Labs, tells BR.

Romania has roughly 3.4 million farms, of which 2.9 million are those in which households consume more than 50 percent of final production. This places Romania first in the European Union, according to Eurostat, the statistics office of the EU.

Local startup Agritech Center has created an online marketplace where farmers can trade a wide array of products and services ranging from crop inputs to equipment and repair assistance. “The main challenge is to move online as now farmers are using Facebook for their personal lives, but not for business. It is quite hard to attract them into the platforms and apps ecosystem. The pandemic will change this quickly, so our farmers must learn how to use social media channels, to create a website, to install apps that help

them sell and promote their products,” representatives of Agritech Center told BR.

The European Union is providing close to EUR 60 billion in subsidies for around 10 million farms under the Common Agricultural Policy (CAP). The EU is also backing digital technologies that can boost productivity. From robots that can harvest crops to Internet of Things solutions for farmers and enhanced analysis tools for land, EU funds are used to help farms keep their competitive edge at the global level.

EU representatives say that the digitalization of agriculture will provide many benefits such as reducing the impact that farming currently has on the environment. “The latest generation of digital technologies could be very useful for Romanian agriculture if the Ministry of Agriculture dealt primarily with the creation of specialists in agriculture, animal husbandry, and other departments of agriculture, making it a real industry,” Madalina Ilie, founder of Romanian startup Manna Foods Solutions, told BR.

Her startup is currently developing Reebo, which is the first 3D food printer in the world designed as a vending machine that can offer cakes and ready-to-eat sandwiches. Going forward, the startup will focus on the development of at least two more projects that can also have a significant impact on future food concepts, which have already started and are currently in the experimental prototype phase.

Romania has signed a European declaration for a sustainable digital future of agricultural and rural areas. “Europe has very valuable assets to build on, such as our strength in robotics for precision farming and CAP implementation systems based on digital data management solutions,” reads a paragraph of the declaration which outlines the need for research and an innovation infrastructure for smart farming.

INNOVATIVE APPROACHES BY STARTUPS IN EUROPE Startups across Europe are getting funding for innovative agriculture technologies designed to improve the overall results of farming operations. In the livestock tech field, Dutch startup Connecterra got EUR 7.8 million to develop a system that helps dairy farmers monitor their herds. The concept is based on sensors fitted on the livestock. The entrepreneurs say their solution can eliminate the use of hormones in dairy farming and cut the use of antibiotics by 50 percent. Elsewhere, Irish ApisProtect raised USD 1.8 million to develop internet-connected beehive sensors. The data generated by the sensors is analysed by machine learning and farmers can receive notifications if the bees get sick or are attacked by pests. Several startups are developing robots that can kill weeds so that farmers can limit the usage of chemical-based solutions. UK-based Small Robot Company and RootWave are developing technology for a weeding robot that can use electric current to get rid of unwanted plants. The firms got GBP 1 million from Innovate UK to work on this project.

Other startups in Switzerland, Denmark, and France are developing farming robots that can kill weeds with a precision dose of

herbicide. “We will see a move to per plant precision in agriculture, and swarms of smaller machines doing the work. It will completely change the way we grow food — and it could even change the way the countryside looks,” said Sam Watson Jones, the chief executive of Small Robot Company, quoted by Sifted.eu. Meanwhile, Berlin-based Plantix raised EUR 6.6 million for its app that helps small farmers detect plant disease and pest infestation with a smartphone camera. The photo taken by the farmer is fed into an AI-based image recognition software, then the app provides data on the most probable disease, nutrient deficiencies, and relevant pests. Insect farming startup Ynsect has raised over EUR 175 million from investors, including EUR 20 million from an EU programme. The company uses vertical farming and robots to produce insect protein from mealworms that can be used as animal feed and fertiliser.