The V4’s strengthening innovativeness is their sole path to economic growth
In October 2014, Res Publica together with Google and the Visegrad Fund in cooperation with the Financial Times, will launch the New Europe 100 project – a list of outstanding challengers from Central and Eastern Europe who are changing the world and improving people’s lives with ideas that scale up in the digital world.
In the final part of this series, editor-in-chief of Visegrad Insight, Wojciech Przybylski, argues that the competitiveness of the Visegrad economies should be improved radically, Internet technologies should be disseminated, and the democratic accomplishments of human creativity should be promulgated.
Rafał Brzoska, the founder of one of Poland’s most interesting startups called InPost, which is competing for its share of the UK package delivery market with Amazon.com, describes the climate for innovation in this region in the following way:
The climate is poor. Even though we have a hefty number of innovations, only a select few manage to make a breakthrough. I don’t know whether that is a result of a lack of capital, entrepreneurial ambition or insufficient business experience. It is equally possible that this might be a combination of all these factors. One thing is certain: Poles have an increasing number of truly innovative and interesting products capable of being successful internationally. Unfortunately, governments, regardless of the political fraction they represent, continue to reward us with unintelligible and conservative regulations that hinder the natural drive toward innovativeness and attaining success. We are operating in an extremely non-conducive climate. If someone succeeds, I consider this success four times larger than for a German company, which operates in a wonderful, investment, export-focused climate. (biznes.onet.pl)
Statistics confirm his words as they explicitly indicate that innovation is not the region’s strong suit. According to an EU report entitled “Industrial Innovation: Innovation Union Scoreboard 2013”, Poland is in a group of the least innovative countries. Slovakia, Hungary, and the Czech Republic are considered to be moderately innovative after the top countries, which are leaders or show an average level of innovation. The only cities listed in the top 100 innovative cities in terms of their economies and social solutions are Prague (55th place in the Innovation Cities Global Index) and Budapest (58th place). Bratislava, Brno, Gdańsk, and Warsaw are unclassified in the middle of the global index, which incorporates 445 cities.
This may change rapidly. Growth is taking place so fast and independently on the Internet that we may fail to perceive that our world has changed. As the InPost example illustrates, it is sometimes the case that the world has already changed. Central Europe is the first place in the world where the first wholly web-based bank succeeded. In the 1990s, such banks were established in parallel in the UK but they quickly went under. This region is one of the larger exporters of computer games. The new Silicon Valley could be established here on the backbone of the Grafton patent, which is already worth billions of dollars and which represents the future of computer subassemblies.
Let’s also look at an example from the media. Tomáš Bella, the head of the Slovak company Piano Media, a firm that supplies user-friendly mechanisms to subscribe to web newspapers for a fee, said last year in London:
In several years people will evaluate our times as an age when an incredibly large number of things took place when a single editor, programmer or publisher could unilaterally affect and change the course of media history. (guardian.co.uk)
At present, the V4 economies do not yet belong to the group of innovative economies, but strengthening innovativeness is their sole path to economic growth for the future. The Czechs are blazing this path. According to Global IT Report 2013, they are constantly improving their position in rankings relating to the usage and availability of web technologies.
The first signs of upcoming change are already visible today. Innovative undertakings have been established in the Visegrad Group and are capturing the world, such as the Polish Ivona and Audioteka.pl, the Hungarian Prezi.com, the Czech Socialbakers, and the Slovakian Piano Media. The state does not have to support their operations actively; it should only eradicate the barriers to entrepreneurial growth so that new economic undertakings can be established and grow their scale of business.
The challenges facing the nations in the region are the same as the ones facing all other nations from the Indian to the Atlantic Oceans. The share played by new technologies and communication tools in producing the wealth of nations is rising, with the most developed economies at the forefront. They are growing on the wave of modernization, a totally new kind of modernization that does not require the construction of large-scale factories and road networks, but is predicated on ingenuity and individual entrepreneurship.
However, the objective is not just wealth measured by the strength of GDP but also simply to eliminate exclusion or extreme poverty. Let’s consider what the world would look like without the currently ubiquitous auction portals and knowledge available on the Internet. Geography is unforgiving. People who are geographically remote have always had a worse run of things. Now? Not necessarily. By eliminating the distance barrier, small-scale manufacturers and salespeople from small communities can earn their keep to secure their own futures. Previously excluded, today they are connected. Who has failed to take notice of a sender’s address when buying from them? Their chances, just as for national economies, lie in the possibility of selling to a larger market. It suffices to remove obstacles.
People want the best available solutions and to an increasingly lesser extent accept the existence of any limitations. They want unlimited access to culture, knowledge, and travel, just as they want to be able to make secure and inexpensive purchases on the Internet regardless of the store’s venue. This is what it means to remove barriers; giving everyone a level playing field to participate in the Internet revolution is a challenge for democratic governments.
The twentieth century was a triumph of modernization. Modernity flooded the streets with the advent of radio, television, radical emancipation, jumbo jet flights, and medical achievements. Technology has changed, and so has the general public. Naturally, modernization has had a variety of faces. Some people challenge the democratic strength of modernization and progress. Philosophers have pointed to the victims: the excluded, the technocratization of authority, the decline in citizen commitment, and, above all, the tragedy ensuing from the toxic symbiosis of the ideologies of fascism and communism.
Central Europe’s last revolution attempted above all to catch up to the West, but even more than that, it endeavored to flee from the pernicious experience of ideology and oligarchization. Perhaps the entire problem is rooted in the attitude toward the concept of modernization and innovation? Where others perceive hope, we see threats. We have overcome the technologies of oppression, but the ideas of modernization and democratic progress have fallen victim to chance.
Today, it is not enough to abolish censorship and permit people to print books. The competitiveness of the Visegrad economies should be improved radically, Internet technologies should be disseminated, and the democratic accomplishments of human creativity should be promulgated. This is what is meant by completing the road to freedom. We gain freedom when accomplishments available to the few become widespread.
Wojciech Przybylski (@wprzybylski) is the editor-in-chief of Visegrad Insight and Res Publica Nowa.