How the private sector can accelerate the digitalization of the economy?

May 26th, 2021
Acceleration of digital agenda and business innovation for Albania – time to fully engage in and maximize current country’s intervention and support

Tirana, 26 May 2021/ RisiAlbania in collaboration with the Secretariat of Albania Investment Council hosted a virtual roundtable to explore and discuss with the private sector, the arising challenges and opportunities of doing business in a new digital era (post-Covid-19)—characterized by rapid technological change.

At the opening session, the Secretariat of Albania Investment Council presented the findings of a study conducted in March 2021 on the acceleration of the digital agenda in Albania. In this study, Albanian companies seem to consider as main obstacles to the development of innovative products/services: high innovation cost, lack of funding, and lack of professionals. Although, the majority of the companies (67%) confirmed a high interest from their staff to acquire a new skill, above half of the interviewed companies (55%) stated not having a dedicated fund for employee training. Skills shortages in the existing staff are addressed mainly through re-organization within the company and by increasing in-company training. Companies’ CEOs believe that it is important to invest in innovation and technology, as important means to increase their business turnover, but they occasionally budget these in their business plans (only 15% of companies reported having a dedicated R&D fund; meanwhile 75% of them stated that they allocate such funds occasionally).

During discussions, Albanian companies acknowledged that digitalization has brought huge benefits in terms of making it easier to approach international clients. But to keep up with the game, the companies need to become more professional and provide better training and better conditions for their employees, improve their services and continuously disrupt themselves with new technologies. While some might argue that the customers are not yet ready to engage in e-commerce, the companies are now looking at themselves whether they are enough developed to comply with the “new rules” of the game. Albanian companies are realizing that they need to improve their capabilities and knowledge to offer qualitative service to their customers to make them willing to start buying online from domestic websites.

Digital payment platforms have created products that improve the financial inclusion of SMEs. However, financial inclusion is a big challenge for the sector because about 60% of the population (according to the World Bank) is still ‘unbanked’ meaning it does not have a bank account. According to the latest research done by the World Bank and the University of Cambridge (2020), the sector is underdeveloped in the Western Balkans, with only 65 fintech in the Balkans and only 11 in Albania (with 5-6 active ones). Local fintech companies said that their main challenges are related to access to data, access to government data and government systems, and access to capital. In the tourism sector, Albanian companies said that they struggle with limited access to payment processors and PayPal is often the only option that accepts credit card payments from abroad—a concrete example where digitalization could help the sector.

The cooperation between the Investment Council and RisiAlbania started back in 2017, at the time when RisiAlbania was advocating for the competitive advantage of the BPO sector, while the Secretariat advocated for the quality of labour skills, promoting it as an incentive for the local market. Later in 2019, the Investment Council considered the ICT as a priority sector for the country, followed with the setting up of a working group (2020) to evaluate the potentials for investment in the ICT sector (with a focus on digitalization), with the final goal of creating favourable conditions for investment in the sector.

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To access the recording of this webinar, please click here.

To download the PPT presentation of the Secretariat, please click here.

To view the agenda, click here.

 

Investment Council is supported by the Ministry of Finance and Economy, the EBRD and the Swiss State Secretariat for Economic Affairs (SECO)

Albanian Investment Council