The ten economies of Central and Eastern Europe – Bulgaria, Croatia, the Czech Republic, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia, and Slovenia – recorded on average 114% GDP per capita increase between 1996 and 2017, compared to 27 percent in the five biggest European Union economies (the EU “Big 5”: France, Germany, Italy, Spain, and the United Kingdom).
However, CEE economies are generally undercapitalized compared to more advanced European economies. A digital and tech-driven economy could become the “afterburner” that the region urgently needs. These ten countries can now be seen as “digital challengers,” well-positioned to join the “digital frontrunners” – the nine Northern European states that are European leaders in terms of digitization.
Digital Challengers and Digital Frontrunners have, on average, much smaller populations than the EU Big 5 countries.
Digital Frontrunners | CEE Digital Challengers | EU Big 5 | ||
Country Average | 0 | 0 (excl. PL) 0 (incl.PL) |
0 | |
Total | 0 | 0 | 0 |
Because their domestic markets are smaller, Digital Challengers and Digital Frontrunners exhibit much greater market openness than the EU Big 5.
Digital Frontrunners | CEE Digital Challengers | EU Big 5 | ||
Country Average | 0 | 0 | 0 |
Despite strong economic growth over the last 20 years, Digital Challengers still lag far behind Digital Frontrunners and the EU Big 5 in terms of GDP per capita.
Digital Frontrunners | CEE Digital Challengers | EU Big 5 | ||
Country Average | 0 | 0 | 0 |
Over the past 20 years, CEE has been one of the fastest developing regions in Europe, growing twice as fast as Digital Frontrunners and more than three times as fast as the EU Big 5.
Digital Frontrunners | CEE Digital Challengers | EU Big 5 | ||
Country Average | 0 | 0 | 0 |
Compared to the EU Big 5 and Digital Frontrunners, Digital Challengers are significantly undercapitalized, which will limit GDP growth in the near-term future.
Digital Frontrunners | CEE Digital Challengers | EU Big 5 | ||
Country Average | 0 | 0 | 0 |
The capitalization gap between Digital Challengers, Digital Frontrunners, and the EU Big 5 is closing very slowly.
Digital Frontrunners | CEE Digital Challengers | EU Big 5 | ||
Country Average | 0 | 0 | 0 |
CEE is currently experiencing historically low unemployment levels, indicating that there are limited labor reserves left to plug into the economy.
Digital Frontrunners | CEE Digital Challengers | EU Big 5 | ||
Country Average | 0 | 0 | 0 |
Hours worked in CEE are already higher than the EU Big 5 and Digital Frontrunner averages.
Digital Frontrunners | CEE Digital Challengers | EU Big 5 | ||
Country Average | 0 | 0 | 0 |
Labor productivity in CEE still lags far behind the EU Big 5 and Digital Frontrunner averages.
Digital Frontrunners | CEE Digital Challengers | EU Big 5 | ||
Country Average | 0 | 0 | 0 |
We see two trajectories for Digital Challengers to grow
their digital economies,
which have the potential
to double or even quadruple and supply an additional
EUR 60 billion-200
billion to their collective GDP.
While in 2016 the Digital Economy in CEE accounted for ~6% of GDP, in 2025 it can reach nine-16%, driven by three sources of additional growth:
Digital Challengers
|
EU Big 5
|
Digital Frontrunners
|
Sweden
|
|
![]() Share of digital economy % GDP, 2016 |
0 | 0 | 0 | 0 |
![]() Digital GDP per capita EUR, 2016 |
0 | 0 | 0 | 0 |
![]() Growth of digital economy % 2012-16 |
||||
Growth of non-digital economy % 2012-16 |
0 |
0 |
0 |
0 |
PISA (OECD), range of country scores, 2012-2015 average
Number of STEM graduates, thousands, 2016
SHARE OF ICT SPECIALISTS, 2016 % of employed population (avg.)
Build a skillset for the future by developing a wide-ranging reskilling strategy, updating youth education for the future, promoting lifelong learning and mid-career training and actively counteracting brain drain.
Support technology adoption in the public sector. Speed up the development of online public services and its adoption. Digitize back-end government processes. Develop digital skills amongst public sector employees. Standardize government data and open it to third party collaborators.
Support technology adoption among businesses. Promote digitization benefits and digital transformation. Incentivize companies, especially SMEs, to use digital tools. Encourage development of digitization support ecosystems.
Strengthen regional cross-border digital collaboration. Create a strong digital pillar within regional collaboration platforms. Ensure standardized & flexible digital policy solutions across the region. Cooperate in managing societal shifts related to the changes in the labor market
Improve startup eco-system by improving entrepreneurial talent pool, increasing access to capital and strengthening the position of major CEE cities as startup hubs.
Actively adopt technology and innovation. Adapt your business model to meet the demands of the digital economy. Leverage digital tools in day-to-day operations, e.g., use the internet and advanced analytics to improve revenue, digitize internal operations, and build cybersecurity capabilities.
Invest in human capital. Prepare your talent strategy for the digital economy. Update approach to recruiting. Actively drive re-skilling and up-skilling.
Embrace a pro-digital organizational culture. Start the change from the top - ensure role modeling. Be bold in experimenting with technologies. Make decisive investment.
Prepare for the digital economy and take advantage of digital tools in all aspects of your life:
Together, Digital Challengers represent EUR 1.4 trillion in GDP – making them the equivalent of 12th-largest economy in the world.
The region’s countries face a number of challenges, most importantly the “brain drain” and the need to reskill the workforce.
The countries have high levels of market openness and similar levels of digitization.
Each of the CEE countries has developed digitally in different areas, so sharing best practices can accelerate digitization.
In order to fully benefit from the digital transformation, the time for CEE’s public and private sectors to act is now. There are three main reasons for this:
We are on the cusp of a Fourth Industrial Revolution, a sea change in which new technology will fundamentally transform the economy and the labor market. New growth will bring jobs in new fields, such as big data science, machine-learning engineering, and new technology design.
A radically altered technological landscape will also present serious challenges: Our analysis shows that up to 51 percent of workplace activities in CEE today – the equivalent of around 21 million jobs – could potentially be automated by 2030 (depending on the economy, regulation, and the labor market), using technology that already exists. This creates both a productivity increase opportunity and a challenge related to transitioning the labor market to new job pools; immediate action would be required to address the latter. Responses could include updating the education system to teach the skills needed in the future and creating continuing education services that support lifelong learning.
Advises clients in banking, telco, consumer goods, private equity, insurance, and other industries primarily on strategy, digital, corporate finance, and governance.
Expert with 20 years of experience in strategic consulting, advising clients on growth strategies based on advanced analytics and digital innovations in sectors such as TMT, retail, energy, and logistics.
Advises clients in TMT, retail, basic materials and other industries primarily on strategy, digital transformation, turnarounds and operational improvements topics.
Advises clients in energy, telecommunications, and technology on the topics of strategy, turnarounds, and digital transformations.