Interview with Hon. Ivan Bartoš, Deputy Prime Minister for Digitization Minister for Regional Development, Czech Republic

Aug 2024 Interview with Hon. Ivan Bartoš, Deputy Prime Minister for Digitization Minister for Regional Development, Czech Republic

How does your ministerial portfolio align with your government’s vision for digitalization and regional development in your country?

When we talk about digital transformation as a phenomenon, it’s important because even though ministries have their agenda regarding healthcare, agriculture, industry, trade and so on, digitalization is a phenomenon above that. The role of vice prime minister for digital transformation involves working on the international aspects of digitalization, not only regarding Europe but also across the sea relations, with open strategic autonomy. Covid showed that it is important, because thinking of individual states, or Europe itself, as a fortress where we can supply our demands by ourselves, proved to be wrong. It wasn’t only Covid, but also chains of digital equipment, semiconductors, etc.

Digitalization, from the governmental point of view, is that you work with the data and can make data-driven decisions in any policy you want to deploy on the ground. It might regard  investments: if you want to introduce, for example, a new Housing Act — which I’m working on and is currently in the Parliament — then you work with the data collected by individual offices to focus the interventions that you, as a state, can make over subsidies, tax reduction, or a particular part of the environment. It’s an evidence-based decision based on the data that is produced by everyday ongoing life, respecting privacy, because you don’t need the individual data of a person, but you can easily get aggregated data that shows you, for example, a situation of a market in a specific region of the Czech Republic, which is quite a new approach.

How is your ministry addressing challenges such as new technologies, AI and cybersecurity not only within the Czech Republic but also at a European level.

I led the delegation of scientists, entrepreneurs and AI and quantum specialists and cyber security specialists for a one-week business trip to New York City and Washington, DC. But also, on the European level, the situation is quite similar. There are three main aspects that we are trying to focus on: cutting-edge technology, which is quantum computing and AI and its impact on everyday life; cybersecurity, which is very closely tied to the development of technology, such as AI and Quantum and others; one of them is individual freedom, ensuring that individual integrity is not violated through the abuse of data.

The capacity and capability of individuals, people, companies and the government to adjust their functioning, especially on the skill level, towards that rapidly changing evolution in digital technology is crucial. We need to be ready to adopt and educate people to tackle those challenges, be ready to work with AI and understand how cyber security has shifted to something fundamenta on the national level and the individual level.

There is a very important aspect of global cooperation between governments, NGOs, industry and academia to be much more proactive towards that, because technology develops faster than we are acquiring the skills to use it in one way and to be resistant to its abuse. This is quite critical. I’m happy about the AI Act and I’m happy that on the European level, we promoted open strategic autonomy, so we get the chance to cooperate closely on the international level with the U.S. and Canada. I highly appreciated this executive order given by President Biden and his administration towards AI. Because if you take a look at the principles that were introduced there on European AI as well and then you read the UN recommendation of AI, those fundamental legislation have a lot in common.

The rest is how we implement it. Big companies evolve rapidly. They can adapt. They’re a huge part of the industry and we are quite industrial regarding heavy industry within Europe. We also need to get to this higher level of digitalization in the industry field. It’s not only automation of production but it’s also touching other parts on the national level: how we think of business, tourism, small manufacturers and hubs. My main goal is to create such an environment and ecosystem based on targets so these things can happen. I believe that, in many KPIs, we are quite successful with that. Even though we may not play number one within Europe, in AI education we have a number of start-ups and the quality of people working within the fields makes us almost on top, because the environment is very good and organizations are very supportive of that.

Could you provide an overview of the current state of digitalization in the Czech Republic?

About 20 years ago, each of our ministries was doing its own thing, which is not a smart approach. I had a chance, as a starting politician 10 years ago, to go through European countries and learn a lot. We found out that if we want to be successful, it’s not the government that does that; it’s an agency’s way of approaching digital transformation. For example, for a new driver’s license, you won’t go to the central office in Prague, but you can get it in the city where you live because the municipality works on behalf of the government.

We had a central solution and major projects that are being deployed on the national level. When the European digital wallet was approved, we decided to teach our businesses eDoklady, which serves as an alternative to traditional physical ID cards and gives you a Citizen ID optionally downloaded in your cell phone activating it via a central Citizens’ Internet Portal. It will enable citizens to manage their data efficiently when interacting with the State. According to European Commissioner Margrethe Vestager, the Czech Republic has positioned itself as a pioneer towards the planned European digital wallet with this step.

It’s not because you have an application on the phone, but you have institutions and the business sector trained to accept something that was unusual before: a person carrying his important data in the cloud or his phone, being able to provide the level of education, enroll the university, which is the future of a shared data space. I believe, as I had a chance to talk to my US friends, that it is something that everybody is interested in. Because we are employing people from the U.S., I vouched for an E-1 visa which would support smoother trade relations with the U.S.

I can say of the measures I have that the digitalization of an entire country never went so fast. When measured by sectors, we still have things to do, especially in the healthcare system, because it’s institutional driven. Most data are held by your private doctor, not by a centralized system and concerning privacy, it’s quite the trickiest place to go digital regarding security and potential abuse of personalized data which you don’t want to go flying around on the internet.

My goal is to ensure that all government services that can be digitized are fully digital by February 1, 2025. We pushed it through to the Parliament before the last election, when we were in opposition, so it was quite a success. I have to say the previous government did not perform well in fulfilling this legislation. A lot of things are being done now.

On a national level, you’re always measured with numbers. Are you growing, or are you falling? It’s hard to understand it as a race. No matter how fast you go, other states are not sleeping. They are approaching the same issues and developing. Estonia started from scratch 20 years ago, with no legacy systems to be newly procured and developed so they had this fast advantage of high-speed development regarding the transformation to the digital area. Other European countries do not have this advantage, because we digitized from the very first time, so we are still running many of the obsolete legacy digital solutions that are critical.

When I went to the States, I had a chance, in the IBM T. J. Watson Research Center, to discuss very particular models that are of worldwide importance: building a data model for AI of a COBOL programming language. Many financial institutions are using COBOL language which their main systems are running on. There are very few COBOL programmers right now. COBOL is an older language compared to modern ones like Java and C# and although it is robust and effective, its age makes it difficult to rewrite or keep updated. One of the AI models is translating applications from COBOL to Java and more common technologies of today with 97% precision.

Our national programs are subsidizing the digital transformation of individual cities and villages. We have 6,200 in the Czech Republic, which is very hard to govern with each local government. On the local level, they are pretty advanced. When I’m traveling somewhere as a Minister of Regional Development, they often ask me what programs I have for them regarding education infrastructure investments. Sometimes, when I go to the regions they ask me how they can help. For example, digital technical maps with the infrastructure that is in the ground, the streets with the future planning; they already did that on the regional level. We have 14 regions. They are more advanced than the state which needs to aggregate and put together the individual maps to have a nationwide map of the infrastructure.

How are digitalization and new technologies being adopted by the private sector, including major industries, but also SMEs? Do you believe this adoption is a competitive factor for your country?

On the index of the overall score of readiness for AI we are pretty good even compared to European countries. We are after Estonia. The thing is it’s a mindset shift; it’s not a thing for programmers to implement AI. But we still think somehow, we are encoding something in a tool to give us results. For the big companies that are here in the Czech Republic, even the Czech companies, it’s no issue as they already implemented the AI, not the Chatbots, but processing massive data and predicting behavior on the market.

We are pretty strong in Fintech. In many cases, if you talk with SMEs and very small businesses, whether it’s a field and a segment of marketing, tourism or services, they are pretty fast at the production of digital content.

What initiatives, projects, or developments are you most proud of? Could you share some of the key investments or advancements made under your leadership?

We started as a new government when the pandemic of the Covid was still on and right after that, the Russian aggression on Ukraine started. Even though we did not give up on the goals, sometimes it’s harder to achieve them, especially when you’re dealing with the energy crisis and inflation, which is currently less than 2%. I hope we are back to the normal expected development of the financial ecosystem in the Czech Republic.

On the national level, the biggest challenge for us was to create a digital and information agency, as a key player within the agenda of a national digitalization that is not replacing individual sectors, healthcare and others, but driving this transformation with critical projects, special expertise and providing delivery units to those who need that. This is an accelerator. Each successful country — Finland, Denmark, Sweden, the U.K., Estonia, Ukraine — has a digital agency that’s somehow not politically driven, working on the main goal to achieve digital transformation to help the people and the businesses work on security.

The second thing was the national solution called eDoklady based on the delivery of European wallet standards. I had the chance to go and talk to commissioners after our Presidency and they asked how many people I had enrolled. After half a year, over half a million people have their digital ID card on their mobile phone. I’ve enrolled institutions on the ground into it; individual municipalities are able to read digital IDs based on the technology of the future European wallet will be built on.

Parallel with these efforts, we are proceeding with the migration of government web services to the unified domain gov.cz There was an example of England in that. They had this uk.gov project historically. They set up the national standard on how to do the architecture regarding the services and presentation of the ministries to citizens. Each ministry in the Czech Republic had its own web page of weird names that you wouldn’t expect to be official. As we became more digital, there were more phishing attempts. People received emails and would enter their IDs and bank account information, thinking they were communicating with the state. We started a project when almost all ministries were migrated to the gov.cz domain and applied a similar open-source scheme, so we ensure that their pages look alike. This way, when users click on these pages of various ministries, they can be confident that they are securely communicating with the state.

The third phase of the project is to centralize the security aspect of the entire solution. This transition — already implemented by several key ministries — aims to enhance visibility and user-friendliness while strengthening our collective defense against cyber threats, especially phishing attempts. By centralizing security, it becomes easier to protect the gov.cz domain against attacks. Additionally, citizens will know with certainty that they are communicating with the government. It’s much easier to protect one domain than to separately secure the domains of 60 institutions.

Another successful project is the citizen’s portal which is one of several access points to digital government services. During my tenure, it has doubled the number of users, with 1.3 million Czech citizens now having accounts on the portal. However, it’s important to note that this portal is part of a federated system. For instance, when selling a car, you can use the citizen portal or access a dedicated page run by the Ministry of Transportation. We launched the new citizen’s portal app, as Ukraine has and other States have, when you’ve got easy access to the portal and when you deploy a new service of the government, you can easily get people involved in that.

What are your connections with the United States and do you believe the Czech Republic is an attractive destination for American investors?

For other investments in the Czech Republic, on semiconductors, we are in close cooperation with Thermo Fisher, which not only has this main development on very high-scale technology of microscopes in Moravia but also provides an entire ecosystem to that. It’s got a research facility; it cooperates with universities.

In my experience, a big part of my professional life, I used to work for Monster Worldwide, which had developments then in the Czech Republic and they’re still present here. As we did that, we appreciated mutual cooperation and we introduced this open strategic autonomy while discussing, for example, acceptance of cloud services and the security requirements towards the cloud services, because some of the players in Europe are overprotected in a way that the only solution that could be considered safe is a solution that’s being developed and held in Europe, which completely puts aside the advantages of the clouds. In many cases, they are expanding cooperation of investments that are already made here.

On the major investment game changers, the partner is usually the government, the Ministry of Industry and Trade, the Ministry of Finance, the Ministry of Regional Development, the Vice Prime Minister, or the Prime Minister because he’s cutting the biggest deals. But we have powerful cities that can set up the agenda as well, such as Brno, Prague, or Ostrava, which have held major events of European and sometimes world importance, those are the partners that I would recommend.

Czech universities are maybe not ranked at the top of universities in the world, but we produce experts in many fields – we mentioned quantum and AI – but there are many others. We can offer a lot. The Advantum envoy, Ms Narak,visited research institutions in Prague, Brno, Olomouc, Ostrava and Pilsen.

We can probably pass that experience to anyone who would be interested in doing business here in the Czech Republic because we do have an institution such as CzechInvest whose main agenda is to provide such expertise and give their thoughts. Obviously, businesses can always do their own research and catch up with the index that is being published worldwide. Any of the major investments always get the due diligence and screening driven by the company, but we can be very helpful with that since we are quite transparent.