Q: The global economy seems to be facing major challenges in recent years, whether we are talking about pandemic challenges, war and cybersecurity, and more recently very high inflation, higher and higher interest rates, prospects of synchronized recession. In this context, how do you deal such challenges in your business sector?
Mr. Bogdan Putinicã: Recent years have had a major impact on a global level, both economically and socially, and most important humanly. We all faced huge challenges that radically changed the way we communicate, work, learn or make decisions. Thanks to these rapid transformations, innovation and technological solutions have become indispensable for our personal development, but also for business environment. Resilience is now a priority for organizations in the private and public sectors. Therefore, the solutions and products offered by Microsoft have allowed customers to quickly adapt to these changes so that their businesses are not affected and continue to work efficiently.
From our point of view, digitalization has never played a more important role than now, and together with our ecosystem of partners we offered concrete solutions, so that organizations around the world come back more resilient, more innovative, more competitive. In fact, the Digital Futures Index, a research conducted by Microsoft, showed that 50% of companies in Romania said that digital transformation had an important impact on them in 2020, the first year of the pandemic, and over 75% showed interest in accelerating the adoption of the cloud and technology, the private sector becoming a catalyst for innovation.
On the other hand, if we refer to changes caused by hybrid work or the conflict in Ukraine, cybersecurity has become a major concern for the business environment, but especially for the public sector. Many companies have prioritized Cloud migration and cybersecurity projects to increase their resilience and ensure the security of their resources and information systems. In Europe, for example, 1 in 8 companies have been affected by cyberattacks, and, on a global scale, attacks on small and medium-sized enterprises increased 6 times in 2021, compared to 2020. At the same time, Microsoft data shows that more than half of the companies in Central and Eastern Europe do not have a complex cybersecurity strategy, in Romania the percentage being 40%.
In this context, Microsoft, as a global leader in cybersecurity, made a priority in helping customers to accelerate their efforts to integrate cybersecurity from the design phase, providing them with advanced security solutions, such as the Zero Trust architecture.
Q: What are the pillars Microsoft Romania bets on in the near term for the Romanian economy?
Mr. Bogdan Putinicã: One of the pillars of our work now is cybersecurity, on one hand in terms of benefits offered by our solutions to companies that choose to create strong security strategies, and on the other hand from the workforce perspective in this area. Transition to hybrid work, the emergence of intelligent supply chains, the development of IoT or Ukraine’s situation are just some of the changes that have generated new security risks and redefined the cyber threat landscape. And the figures are downright worrying, with total cost of cybercrime reaching 10 trillion in a few years. Our 8000 cybersecurity experts analyze 24 trillion security signals every day, using artificial intelligence and cloud technology, to support customers to be resilient and continue their work in the face of these attacks.
If we look at the workforce in this domain, the figures show a shortage of cybersecurity experts globally. According to the LinkedIn platform, in Europe, the demand for employees with such skills has increased on average by 22%, compared to last year – the largest increases being in Poland (36%), Germany (32%) and Romania (31%). Europe would need around 200,000 professionals in this field. In this context, Microsoft has assumed an important role as educator, running in the last year training programs with partners from both the public and private sectors that have allowed over 800 specialists to increase their resilience level.
In fact, we see in Romania a future regional digitalization center due to the advantages that our country has. I strongly believe in cooperation between the public and private sectors to achieve this because there are many competitive advantages that set us apart from other states. With over 200,000 software developers, Romania has the second largest community in CEE, but also a percentage of STEM graduates above the European average. We also have one of the largest startup ecosystems in Europe, the volume of investments attracted in the first 6 months of last year being almost $ 100 million.
But, it is also true that we are significantly positioning ourselves behind the European average in terms of people's digital skills, an indicator strongly correlated with economic and societal outcomes in a country. For this reason, education and skilling programs carried out together with our partners in the public and academic sector have become a priority for us, the educational effort being focused on strategic partnerships. The Global Skilling Initiative program, run to help people acquire digital and technical skills, Microsoft Virtual Training Days, Microsoft Learn for Students and Educators program, which allows universities to include updated technology courses in their curriculum, are just some of Microsoft initiatives aimed at supporting people in Romania to acquire new digital skills. Through this programs, we want to support young people to build a portfolio of digital skills that will further lead to a direct benefit, both in their lives and in society.
Q: A new concept developed in 2022 (after the 2021 Great Resignation): quiet quitting, in simple terms, employees want to meet their job descriptions only without taking any extra duty. Is quiet quitting in your sector real? If yes, how would you describe the managers' role in combating quiet quitting? If the answer is no, what is your explanation? What are you looking for when expanding your team as manager?
Mr. Bogdan Putinicã: Recent years have brought significant transformations in the work environment. The new technological solutions quickly implemented both in private and public sector have led to the exponential increase of the interaction with the final customer. As a result, the demand for IT skills increased. Our data show that by 2025 there will be over 650,000 jobs in technical / IT roles in Romania.
Hybrid work is here to stay, and employee expectations have changed. We all need to define productivity much more broadly. At Microsoft, we cannot say that there is this phenomenon of "quiet quitting", since our organizational culture is based on the concept of "Growth Mindset", that is, a continuous learning process in which employees engage. In this way, we can collaborate more effectively with each other, looking for diverse perspectives that will make us and our products better. We have offered our employees as much flexibility as possible and we have created a favorable framework to carry out our work, regardless of the work style that each of us adopts, in the office, at home or in any other place in the world.
As a manager, I encourage open dialogue between colleagues and communication with team leaders. Recently, when we launched World Trade Index report, Satya Nadella, CEO of Microsoft, said that thriving employees are what will give organizations a competitive advantage in today’s dynamic economic environment. The same study showed that 76% of employees would stay longer in a company if they could benefit more from learning and development support, and 68% if it was easier to change jobs internally.
At Microsoft, we encourage personal development, acquiring new skills and a new way of thinking. Also, social and physical wellbeing are extremely important, and we continue to invest to ensure that our employees receive the support they need. I believe that, in this way, we can each contribute to creating a climate of trust and transparency, which ultimately translates into increased productivity in the workplace.
In fact, we are extremely pleased that Microsoft was named Employer of the Year in Romania this year. I believe that these awards are a recognition of the advantages offered by our organizational culture.
Q: What’s your opinion on productivity when working from home? Do you see any resistance to calls from employers (not only at Microsoft Romania but also from your clients) to return to the office?
Mr. Bogdan Putinicã: We learned so much during the pandemic. Employees showed they could be productive from home. As leaders, we can take from that experience and adapt it to create a new hybrid work style that suits our business goals.
Recently released Work Trend Index Pulse report showed that hybrid work has created a growing disconnect between employees and leaders. They’re at odds about what constitutes productivity, the benefits of flexibility and the role of the office. According to this data, 87% of employees report they are productive at work, but 85% of leaders say the shift to hybrid work has made it challenging to have confidence their employees are being productive. When it comes to what would motivate people to return to their office, 73% of employees say they would be motivated to return if they could socialize with colleagues (84%) or rebuild team bonds (85%).
Empowering people to thrive in a more flexible work world requires rethinking the entire employee experience – from safety, to how you create culture, to attracting and retaining talent. To address these new challenges, Microsoft recently introduced new capabilities in Microsoft Viva, our employee experience platform. We set out to offer a new approach that recognizes that work is no longer just an office, but an experience that needs to go beyond time and space so that employees can stay engaged and connected no matter where they work.
Q: Romania has one of the highest Internet speeds in the world but stays behind tens of countries in terms of the digital economy. What more can we do to increase the level of digitization in the public sector as well, for example?
Mr. Bogdan Putinicã: It is true, in Romania we live a paradox. We have all these advantages, a strong Software and IT Services vertical, which contributes almost 7% to the GDP, an ecosystem of startups that we consider an engine of innovation and digital transformation, highly qualified human resource. In addition, the entire market and IT industry is open to support the authorities in creating a good country project. However, the degree of digitization in business and public sector remains low. The latest DESI report places us last in the EU.
We believe that this paradox is, in fact, a huge opportunity for growth, and the authorities have seen this. Romania chose within the PNRR (National Recovery and Resilience Plan) to make a pillar dedicated to digitalization, built around the government cloud project. Through the PNRR, €6 billion will be allocated to digitalization, of which €1.8 billion is just the digital transformation component. Also, €30 million will be allocated to digital education, the increase in digital skills in the population.
Considering the current state of digitalization in the public sector, such a strategic project was needed, complementary to the public cloud services offered by global cloud providers such as Microsoft and other members of ANIS.
Another step we can take is to support SMEs in the digitalization process and invest capital in startups, so that they capitalize on their enormous potential, thus contributing to the sustainable growth of the Romanian economy. Investing in startups is an indicator of a country's economic strength. That's why we have been contributing to their growth for many years now. Together with our partners, we offer Romanian startups a unique program - Microsoft for Startups Founders Hub, which allows them to scale, become more competitive and capitalize on new business opportunities. Starting this year, Microsoft for Startups Founders Hub is accessible to all entrepreneurs and startup companies, regardless of the stage of development they are in. We are committed to allocating $500 million worldwide through this program to provide free access to Cloud resources from Microsoft Azure and GitHub Enterprise, training programs so that startups can grow their business in an efficient way, but especially access to a potential customer base, through a “Co-Sell” program.
Another important direction is the increase of digital competences. We can do this by introducing programs and courses in the university environment, but also in pre-university education, to ensure a modern level of education for future generations of IT experts, and not only for them. Reducing the gap from this point of view will lead to an increase in productivity and average wages, and implicitly of the standard of living in our country. An improvement of only 10% in the DESI score can lead to a direct impact of 0.7 percent in Romania's GDP.
Q: The pandemic seems to be over. How did the Romanian companies continue their digital transformation process? How can the cloud technology help speed up this process?
Mr. Bogdan Putinicã: In recent years, digital transformation has dominated the agenda of companies, but also of authorities around the world, and budgets for this process have steadily increased. Those who invested in innovation had only to gain, so in Romania, too, digitalization was a priority, especially in the business environment. Our studies show that although Romanian companies allocate on software products and solutions similar amounts as other states in the region, they are 13% behind the average when it comes to the percentage of companies that use the cloud.
From this point of view, continuing to invest in high-performance, cloud-based digital infrastructure is a must. Cloud technology offers flexibility, scalability, cost optimization, and a high level of resilience and security against cyber threats.
And here I would like to return to the benefits that we can generate in society, because of the collaboration between the private and the public environment. If the PNRR is to be a successful project, at least in terms of the potential reforming effect of the digitization component, we need to create a national regulatory framework 'digital first' that will allow the rapid adoption and development of state-of-the-art technology. For example, a "Cloud First" law is needed to take the public administration in Romania to the area of using cloud services as a rule. There is also a need for a government cloud regulatory framework, as well as data governance legislation to bring clarity to public institutions about how the data they manage or generate is managed.
Q: Big crises bring significant opportunities. In your opinion, what are the main opportunities in the 2022 context?
Mr. Bogdan Putinicã: All these challenges we faced turned into opportunities to learn more about resilience, communication, leveraging the potential that we all have, whether we're talking about organizations or individually. Due to our position as the largest technology brand in Romania, we believe that we have a responsibility for society and the economy. We have constantly supported, through our approximately 2.000 people working for Microsoft in Romania, but also through our ecosystem of partners, the digitalization efforts of the business environment and the public sector, and we will continue to do so.
We will also continue to support the startup ecosystem, thanks to the huge potential they have in boosting the economy, not only locally, but also regionally and globally. For example, in the first six months of 2022, Romanian start-ups attracted investments of 64.5 million euros, and some of them were part of the Innovation Labs program, whose main technology partner is Microsoft. We have numerous examples of companies that have been able to scale and capitalize on the opportunities they have received within Microsoft for Startups, Innovation Labs or InnovX programs. And I mention here FintechOS, which is developing innovative solutions for the digitalization of the banking sector, based on AI, designated the Fintech startup of 2020 in Europe and Partner of the year in Romania by Microsoft, in 2021; Modex - one of the leading companies in the field of blockchain; Footprints for Retail, which operates one of the most advanced Retail Media platforms in the world; Agricloud – start-up that develops solutions for smart agriculture, present in over 7 countries in Europe; and xVision – which has developed a health solution that uses artificial intelligence to interpret complex medical analysis.
It is also true that this process of digital transformation has come with new challenges in cybersecurity. It is obvious that the services offered by cyber attackers become the main risk faced by any business. For example, ransomware attacks cutlery increased by 150% in 2021; and 579 attacks on passwords are carried out every second. We are constantly investing to develop advanced cybersecurity solutions. We stand by our clients providing them with infrastructure assessment and identification services for potential security breaches, as well as concrete solutions to protect their infrastructure no matter where it is located, on-premises or in cloud.
At the same time, we have noticed that the authorities recognize the importance of public-private partnership in shaping the cybersecurity strategy at national level, and PNRR will once again play a major role in this equation. A joint effort is needed at the level of public authorities and the private sector to ensure that we take all measures to cope with this wave of cybercrime.
Q: What are the opportunities brought to Romania by PNRR funds? Do you see a leverage effect? How to spend that money?
Mr. Bogdan Putinicã: It is obvious that in this dynamic economic climate, but also full of uncertainty, the competitiveness of a business is essential, and the benefits from implementing digital solutions are visible. However, technological tools and solutions are not necessarily enough for sustainable economic development. A better future for everyone will become a reality if everyone has access to the same opportunities and means of development, and through PNRR we can have such a reality.
The public sector must be a vector of innovation, and we have the example of countries where public services are highly digitized and where the level of innovation and productivity is also higher. The PNRR is, above all, a structural instrument for reforming. It is an opportunity that we cannot miss. The targets set by PNRR are extremely ambitious, but the road to implementation is long. Important steps are still needed, such as creating the right legislative framework, for every citizen to enjoy digitized public services, to make our lives easier. In the absence of such a framework, it will be difficult to generate the expected impact of the reforms targeted by these investments.
For Microsoft Romania, synergy with other actors in the business environment, but also in the public sector is essential to support a competitive economic environment that encourages growth and development. I think we are at a very important moment from this point of view and each of us has a key role to play. It takes collaboration on all levels to generate and drive change, because that is in our power.
Q: What is your main message to your clients/partners regarding challenges and opportunities for the short and medium term?
Mr. Bogdan Putinicã: First, I would like to thank our partners and customers for the fact that we have grown together, becoming a strong ecosystem that has contributed to boosting the continuous growth of the Romanian economy and society in general, through high level of innovation and technology developed all these years. We estimate that, in the next 3-5 years, the IT sector will double its contribution to GDP, up to about 12%, and the main digital transformation projects that companies will focus on in the coming years are the cloud, the solutions for hybrid working and artificial intelligence.
Microsoft also aims to invest, over the next 5 years, $20 billion (globally) to develop advanced cybersecurity solutions, and 150 million euros of this amount are dedicated to the development of technical services that help administrations everywhere implement solutions and services that provide them with a high level of protection against cyber threats.
We believe that together we can build a better future for everyone, whether we are citizens, global corporations or government institutions, to reach our true potential. A potential that we can then leverage both for the benefit of ourselves and for the benefit of the whole of society.