Export volumes, the number of employees and companies, as well as the industry’s overall turnover have increased in recent years. Latvia does have an insufficient level of digital skills, Signe Balina, President of Latvian Information and Communications Technology Association, told BNN in an interview.
What are some of the most notable recent events in your sector?
In February 2017, more than 20 ICT companies, NGOs, education and research institutions signed a cooperation memorandum On common goals for Latvia’s digital transformation process and data-based public and state development, LIKTA President Signe Balina said.
Data-based public and state development will be based on three pillars: data democratization (increased data accessibility and use), data-based public involvement in public management processes, as well as data and technology-based development of innovations and their commercialization. The memorandum states that all involved sides are to develop an action plan by 1 July 2017 to help achieve goals.
«Data economy is the field that is rapidly developing now. Latvia can create data-based economy and management brand to promote solutions and technologies made in Latvia in export markets. This memorandum will help Latvia’s ICT industry to develop and assist with the growth of the country’s national economy. It is also important to realize a modern e-management system to improve Latvia’s and its economy’s international competitiveness.»
She added that one very important development was LIKTA’s annual conference, which is the most important annual event for Latvia’s ICT industry. «During this conference, experts analysed the ICT industry’s development and Latvia’s ability to become a smart-country – a development leader in Europe’s context. Experts also assessed accomplishments in technological development and goals for the future.»
Can you say economic conditions are improving and there is a lot of potential for economic growth in the market?
Balina said data from the Bank of Latvia show that exports of the country’s ICT industry last year, compared with 2014, had grown by 24%, reaching EUR 361.32 million. Since 200, exports of telecommunications service have nearly doubled, from 55 to 104 million euros. Revenue from exports of computer services and information services have grown the most – from EUR 98 million in 2008 to EUR 257 million in 2015.
She also mentioned a certain factor in the industry: «For the first time the number of employees in Latvia’s ICT industry had exceeded 30,000 in Q4 2016, according to data from the State Revenue Service. This points to the industry’s rapid development. Analysis of available data from each industry shows that 6% (EUR 104 million) from all taxes in Q4 2016 were from ICT. This puts the industry on 4th place among other national economy industries in terms of taxes paid to SRS.»
How would you describe the government’s economy policy aimed at improving the economic situation in the country?
The European Commission has made multiple steps towards the creation of a single digital market, said LIKTA president. On 25 May 2016, the commission presented proposals that included multiple measures to simplify purchase and sale of products and services on the internet across the entire European Union. The legislative proposal includes rules to prevent unjustified geo-blocking, cross-border delivery of packages and protection of consumer rights.
According to data from the Central Statistical Bureau of Latvia for 2016, the highest wages in Latvia were recorded in financial and insurance, ICT and energy, state administration, mining and quarrying.
Would you say there is a lack of skilled workers in Latvia?
Although the number of employees in the industry is increasing, there is still a lack of ICT specialists, Balina said. SRS latest data on average income of employed people in the country for the first three quarters of 2016 shows that people working in programming, consulting and other associated IT fields earned EUR 1,647 a month that year. «People working in ICT are paid some of the highest wages on a local and global scale. In addition, it is a stable and perspective career choice. ICT is a field workers of which do not experience any problems with social security as long as social fees are performed,» Balina said.
«ICT is not just a stable industry – digitization plays a major role in many other industries, including finances, logistics, manufacture and tourism. Nine out of ten vacancies require digital skills from potential candidates. This means ICT is steadily entering other sectors that are not traditionally associated with digital skills,» LIKTA president explains.
Balina comments the latest DESI data: «Latvia has an insufficient digital skills level – only 50% of residents have got satisfactory digital skills. On top of that, Latvia has one of the lowest employment ratio of ICT specialists: 2.2% on average (3.5% in the EU). It should be added here that a lack of specialists in noted in Latvia and the EU. According to EC’s predictions, in 2020 Latvia will experience a lack of 20,000 specialists in fields like natural sciences, ICT and engineering. This is why it is important to promote students’ interest for mathematics, computers, physics and other exact subjects.»
Balina also mentioned EC’s assessment: «The EC believes data economy will create a significant number of new jobs and entire professions. For example, UK expects increased demand for large data specialists, which is expected to create 69,000 new jobs. ICT industry’s dynamic development is also shown by EU’s data economy’s general value, which was EUR 272 billion in 2015 (5.6% higher than 2016). The number of ICT companies is also on a rise. This explains the growing demand for specialists. Unfortunately, demand exceeds the current supply on the job market.»
LIKTA president believes digital skills have become an integral part of people’s everyday lives. «Looking at the numbers, we have to admit that our country’s economy and welfare will be affected by professional ICT specialists. It is important to establish digital skills as basic skills for any education recipient to keep up with the rapid technological progress. To learn such skills, however, it is necessary to learn exact sciences – mathematics and physics, programming and other subjects that develop algorithmic thinking.»