Over the past few decades, it has become increasingly clear that companies capable of swiftly adapting to technological changes maintain a competitive edge. The economic development of a country is heavily dependent on the efficiency of the businesses operating within its borders.
So, how do Hungarian companies perform in terms of digitalization compared to their EU counterparts?
Enterprise resource planning (ERP) systems enhance internal communication within companies, improve data quality, and significantly contribute to operational efficiency. In Hungary, 35% of companies utilize such systems, compared to 43% in the EU. This gap cannot be attributed to differences in average company size, as the lag persists even within the small and medium-sized enterprise (SME) sector. It is likely that sectoral disparities are at the root of this discrepancy.
When it comes to online presence, Hungarian companies still have room for improvement. While 32% of businesses in the EU utilize at least two types of social media platforms (e.g., a social network and a blog), only 17% of Hungarian companies do so. However, Hungary fares better in the adoption of cloud services, with only a two-percentage-point gap compared to the EU’s 39%.
The speed at which Hungarian companies adapt to new technological challenges is perhaps best illustrated by their willingness to embrace artificial intelligence (AI), a field that has seen rapid advancement in recent years. By 2023, 8% of EU companies had already implemented some form of AI-based solution, whereas only 3.7% of Hungarian businesses had done the same. Those Hungarian companies that plan to introduce AI cite a lack of expertise and high expected costs as the primary barriers, with additional concerns including compatibility with existing systems and legal uncertainties. Among the Hungarian companies that do use AI, the technology is most commonly applied in marketing and sales, accounting and finance, and production.
Hungary performs relatively well in the realm of electronic sales: 23% of Hungarian companies’ net revenue comes from online sales, surpassing the EU average of 18%. The leaders of Hungarian SMEs can also take pride in this achievement, with 18% of their revenue generated online compared to the EU average of 12%. Moreover, Hungarian SMEs engaged in e-commerce exceed the EU average (21.8% versus 19.1%). Notably, among Hungarian companies with more than 250 employees, the proportion engaged in online sales is three times higher than among those with 10 to 49 employees. It is worth mentioning that the spread of digitalization has been significantly supported by EU funds between 2010 and 2023.
The European Commission’s Digital Intensity Index is a complex indicator that aims to capture the level of digitalization among companies across different countries, partially based on the indicators discussed above.
The Digital Intensity of Companies in Central and Eastern Europe
Source: Hungarian Central Statistical Office (2024)
The index reveals that the level of digitalization in Hungary’s business sector lags behind the EU average. Although our numbers are the best within the region, this achievement is bittersweet, as Central and Eastern European countries generally rank in the lowest-performing third within the EU.
Hungarian companies are increasingly adopting digital technologies. This trend was accelerated by the COVID-19 crisis, and it seems that digitalization continues to expand among Hungarian businesses in the post-pandemic world. While Hungary performs relatively well within the region, further efforts are needed if we are to reach the average level of the European Union.
Download full analysisSources:
European Commission (2024)
European Commission (2024)
European Commission (2024)
HCSO (2024)
HCSO (2024)
European Commission (2024)
European Commission (2024)
European Commission (2024)
