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Central Europe
March 30, 2018 www.intellinews.com I Page 12
Online growth companies make “New European Tigers” roar
bne IntelliNews
The CEE region is enjoying strong GDP growth and an increase in productivity driven partly by on- line small and medium-sized enterprises (SMEs). Developments in the region are so promising that a new study by PayPal and Deloitte talks about countries from Northern, Central and Southeast Europe as the “New European Tigers”.
The study focusses on 13 countries that lie in a near vertical line down the EU’s eastern flank. They run from Finland in the north, via the Baltic states, to the Visegrad 4, to the four EU member states of Southeast Europe, ending in Greece. What all these countries have in common is that they are catching up with Western Europe in terms of education, internet access, investment in infrastructure and in other segments.
“We found the results of the research so interest- ing and positive that we named the markets cov- ered in it “The New European Tigers”. This report will show how the region is growing, thanks to
the positive changes in infrastructure, increasing penetration of technologies and innovation, lo-
cal talent and last, but not least, the development of online commerce,” stated Matt Komorowski, senior director and general manager for Northern and Central Europe at PayPal.
“Natural development for the economies of ‘The New European Tigers’ focuses on other invest- ment into innovative fields, development of the online business sector and other expansion on the foreign markets. The key driver of the region are
small and medium-sized businesses, which are the core of the development of the region,” said Marcin Glogowski from PayPal.
Looking at some of the factors behind the region’s rapid growth, the report notes that “The region is very competitive in terms of the labour market. There is significantly smaller operational costs- average compensation per hour in the region is about one-third of that in the rest of the EU — €10 in the region, compared to €27 in other EU economies.”
The productivity of the region increased by 9% when compared to 2007, which is almost twice as much as the increase in Western, more developed economies. “High volume of export is showing the economic book and is a natural way for the com- panies in this region. Internet, as a driver of the growth, is making trans-national business easier than ever for the [small and medium sized busi- nesses],” commented Julia Patorska, the head of economic analyses department of Deloitte.
Supporting the development of online businesses, the report also points to the sharp increase in
the number of households with internet access, which is now at 80%, albeit 10 percentage points lower than the level in the western part of the EU. Mobile adoption is faster than in the west, and around 55% of citizens used their mobile phones to go online in 2017. Moreover, residents of the eastern part of the EU are increasingly using bank cards rather than cash to make payments, with