Hungary: The Government’s Next Steps in Digitalization

The Hungarian government recently adopted an official resolution for modernizing the economy and bringing digitalization to every household in the country. The resolution builds on the findings in last year’s Monitoring Report of the National Infocommunications Strategy, which analyses the level of digitalization of the Hungarian economic and civil sectors, and recommends where further development can be made.

1. Network development and the pricing of Internet services

The government undertakes to support the infrastructural development of the Hungarian telecommunications service providers and also calls for the competent commissioner to negotiate with the service providers by 1 January 2018 to assure that retail prices of the Internet access shall be based on the favourable 5% VAT tax rate. The purpose of the new pricing policy is to strengthen digital accessibility and affordability of Internet services for every unconnected household.

2. Sector strategies and the 5G coalition

The resolution introduces sector-specific strategies, which endeavour to enhance the potential of each economic sector and maximize the benefits of digital technology. A specific state strategy shall be prepared for the digitalization of commercial services, agriculture, health, and sports.

With regard to the importance of 5G technology, especially in the field of self-driving cars, the government calls for the creation of the 5G Coalition, made up of vocational, scientific and other interest groups, which will prepare Hungary’s 5G Strategy and action plan.

3. Enterprises and the R&D sector

The resolution empowers the domestic-content service-provider market, and orders the development of a digital program to improve the digital readiness of micro-enterprises, so that small- and medium-sized Hungarian enterprises can become key players in the digital transformation.

With regard to the national importance of IT and R&D sectors, the government also orders the development of measures, which support the innovative activity and product development of micro, small and medium IT enterprises so that they will be better able to compete with multinational companies.

4. Smart cities and other aspects

The resolution highlights the importance of smart city projects and calls for the digital development of local and regional communities, and for the creation of a Smart City Working Party. In the future, government officials and civil servants shall be educated on smart city solutions.

The new government resolution prepares both communities and the economy for the digital transformation, and sets out sector-specific strategies to fine-tune digitalization. By ordering research and analysis and by creating organizations such as the 5G Coalition and the Smart City Working Party, the resolution attempts to predict the effects of digitalization, and maximize its success in every sector affected.