Is Digitization the Path to Reducing the Budget Deficit?

Institute for Public Discussion is organizing a conference titled “Can digitization of public administration lead to a reduction in the budget deficit?” on October 16th at the Museum of Decorative Arts in Prague.

Digitization has become a crucial topic in the face of global impacts caused by the pandemic crisis and the war in Ukraine, which have negatively affected public budgets. As we navigate through a period of rising prices and the search for savings in all government sectors, can faster digitization of state administration be the way to reduce the deficit in public finances and achieve higher efficiency in public services?

Currently, the Czech Republic ranks among the EU countries with the lowest GDP growth rate. This is why the Czech government is compelled to seek pro-growth measures that will help kickstart the Czech economy. The National Economic Council of the Government (NERV) and the government consider faster digitization of state administration, more efficient data management, and the utilization of new technologies as part of these measures.

The latest results of the Digital Economy and Society Index (DESI), which the European Commission annually compiles, show that there is still work to be done in the Czech Republic’s digitization field. In the measurement results, the Czech Republic ranked 20th out of 27 EU member states. The level of digital skills among citizens remains a persistent issue, and insufficient use of technology in businesses is also mentioned. The Czech Republic is still grappling with a shortage of experts in information and communication technologies, both in the public and private spheres.

On the other hand, a positive trend can be observed in the development of eGovernment. While in 2018, 53% of the Czech population communicated with the state through the internet, the latest data shows an increase to 68%. Thanks to digitization, Czechs submitted more income tax returns electronically in 2022 than traditional paper forms.

What are other practical examples of projects in the tax, social, or municipal sectors in the Czech Republic and worldwide? Should the government leverage quantum technologies and advanced data processing? Have we created suitable conditions for advancing digital public services, and are we sufficiently protected against cyber-attacks? Is it realistic for the government to finalize further digitization projects by the end of its term?

These are some of the questions that arise when considering the potential of digitization to reduce the budget deficit and enhance the efficiency of public services. The conference organized by the Institute for Public Discussion aims to shed light on these crucial issues and explore the possibilities for a digitally transformed future.