The following are the outputs of the captioning taken during an IGF virtual intervention. Although it is largely accurate, in some cases it may be incomplete or inaccurate due to inaudible passages or transcription errors. It is posted as an aid, but should not be treated as an authoritative record.
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>> MODERATOR: Distinguished ladies and gentlemen, dear colleagues, it's a great pleasure for me to be here with you today to the next agenda point of the Internet Governance forum 2021 in Poland in Katowice, high level plenary panel, investing in digital growth and enabling capacities. My name is Krzysztof Szubert, and I will be having the pleasure to moderate this session.
This is a very special occasion for us as for the very first time Poland is organising the official 16th edition of Internet Governance Forum as well as having with us today on site leading decision makers in the field of digital transformation.
Today you will hear directly from them. We are very lucky in our panel that we have the panelists on site with us on the stage so we are really very happy and really appreciate that you are together with us on the stage. Let's give a warm welcome to Ms. Huria Ali Mahdi, the state Minister of Innovation and technology, Ethiopia.
(Applause).
>> MODERATOR: Ms. Teresa Czerwinska, Vice President, bank. Ms. Maria Francesca Spatolisano, interim head of United Nations Office. Mr. Verdict, Ambassador for digital technology and Mr. Viktors Makarovs Special Envoy on digital issues at the Ministry of Foreign Affairs, Latvia.
There will be as well a short video message in the second part of the meeting from Mr. Dmitry Chernyshenko Deputy Prime Minister Russian Federation, the 2025 host country.
Ladies and Gentlemen, there is no doubt the digital transformation including regulation as well as investment and funding are today the most important topics. Digital transformation is a complex process that carries enormous potential for human development and economic growth but is not free of challenges. The current pandemic has changed a lot of negative effects, especially for businesses.
Many of them have had to face a new virtual reality. According to The World Bank's report prepared in cooperation with Polish agency for enter prize development as a result of pandemic, 32% of the Polish companies started to use or increased the use of Internet in the end.
Social media, specialized application or digital platforms or businesses are as well very much present. What enterprises improved in this way was mainly sales, 45%, marketing 38%, management 24%. Public administration also has seen a major acceleration, SMEs not necessarily.
So I would like to start with the very open question to all of our speakers, based on your experience and perspective, what are the challenges in terms of digital transformation for the years to come, and what areas will require if any regulatory intervention. Since the time is limited and we have a number of distinguished speakers, please be so kind and limit your intervention to maximum, three, four minutes.
Let me give the floor to Huria Ali Mahdi, State Minister of Innovation and technology, Ethiopia.
>> HURIA ALI MAHDI: Thank you.
>> MODERATOR: Based on your experience and perspective what are the challenges in terms of digital transformation for the years to come from your perspective your personal feelings or opinions and what areas will require if any regulatory intervention.
>> HURIA ALI MAHDI: Thank you so much, Mr. Chair.
As you know, digital transformation is a journey. The journey is dynamic, fast, and requires multi‑stakeholder involvement, so to recognize this very nature digital transformation. For example when my country or Ethiopia Government designed its first digital strategy, 2025 our transformation strategy, the strategy highlighted to urgent and cooperative action to make the digital transformation successful.
Because if we are not managing the digital technology, it can significantly impede our nation of development opportunity. Like, for example lack of infrastructure which includes connectivity and power, cybersecurity, digital literacy, lack of legal frameworks plus the challenges for digital transformation journey. The other important factor is we lack a new mindset and the leadership lack of leadership style from governance side.
So it will be impossible to leverage digital opportunity or transformation without the commitment of the leadership and coming with a new mindset.
So it needs to have a new mindset and commitment on the leadership. The other thing is also failing to understand the complexity of the digital ecosystem among the policy makers and stakeholders to address the challenges and explore the opportunities in challenge. So I believe failing to address this issue could be a challenge for digital transformation. Regardless, the regulatory intervention, digital transformation needs vibrant technology entrepreneurship ecosystem. And the ecosystem requires enabling policies, regulations that impress innovation and technology.
So if we take our experience adapting innovative to policy makers designing stronger governance coordination, multi‑stakeholder engagement introducing new regulatory solutions for investment and doing business and tell com sector regulations are some regulatory interventions that are digital information strategy identifies regulatory information. These are the challenges we face.
>> MODERATOR: Thank you, Minister, for giving us an insight to Ethiopia perspective. You have mentioned several times the multi‑stakeholder approach, which is important that you will be hosting IGF 22‑23 in the following year. So it's very important. Now, I will turn over to Teresa Czerwinska, Vice President European Investment Bank.
>> TERESA CZERWINSKA: Thank you very much, Chair.
Let me start with a warm thank you to the organizers for this kind invitation. It's a great pleasure to represent the European Investment Bank at this very distinguished forum, the European Investment Bank, the EU climb mat bank, and our EIB group comprises the European Investment Bank and the European investment fund and we are the biggest multilateral financial institution in the world, and one of the largest providers of financing in areas of climate, innovation, and digitalization with around 77 billion Euros invested in projects every year around the world.
So we believe events like today's are urgently important, particularly because the economic recovery is still vastly uncertain, and digitalization is the key factor which can mitigate this uncertainty. So we are happy to bring our experience to this debate and to show our experience at the forum.
In our view, there are at least to major challenges for digital transformation to fully exploit this tremendous potential, and those are from our perspective first the existing enormous digitalization gap between Europe and other major economies and second the uneven intensity of digitalization across regions and sectors in Europe and beyond.
And let me today share with you European perspective of these issues, yet many of patterns can be easily found in other, in the regions around the world. So on digitalization gap, today we are talking that pivotal role of digitalization is enabler of innovation and sustainable growth implies large investment needs in the years to come, and you still under invest the ICT sector in comparison with other major economies as the U.S. and Japan.
According to the latest estimates, the digitization gap between Europe and other major economies is assessed at the level of 1% of GDP annually. So it's quite substantial gap in financing we are observing. It is why for us it's obvious the mand for green technologies and digitally enables products and services will be important growth engines in coming years and decades.
What we need for digital and green transformation, we need some kind of structural shift, and it requires extremely large investment programmes. This is why collaboration between public and private players is so much needed to close this substantial investment gap.
Of course, the digitalization gap is not the only concern. The EU shows substantial evaluation in digitalization intensity across region, sectors as well as individual freedoms, and on the regional level among companies in eastern and southern Europe digitalization is particularly low, well below the EU average, and those regions require special attention to ensure that all EU Member States can truly benefit from the coming investment programmes.
To address this investment gap in the CE region, particularly the European Commission together with the EIB group, EBRD and World Bank Group have launched digital innovation and scale up initiative, and we as the EIB group, we are leading this exercise and supervising.
So all in all, such collaborative efforts are to enablers for the twin transition, green and digital, and all in all coming back to your question, what are the main challenges, I think to be tackled by international community, digital gap in financing, and also this very big variety amongst sectors and among regions in digital intensity.
>> MODERATOR: Thank you Ms. President, it was very interesting perspective from the European Investment Bank also touching a bit of the financial side and we will come back to that later as well.
Our next speaker is Maria Francesca Spatolisano interim office United Nations Office of the Secretary‑General envoy on technology to share thoughts on digital transformation. Answer the same question in your perspective.
>> MARIA FRANCESCA SPATOLISANO: Thank you very much. It's a pleasure to be here, and to have this great audience both online virtually and in present to discuss important crucial things. This morning in the Opening Session, we all heard from the leaders of Poland and the Under Secretary‑General in UNDESA how important it is to address the opportunities that are given to us by this new technologies, and to be mindful of the challenges and the risks.
So I will not repeat that kind of premise, but it is very important to keep it in mind. Why? Because at the UN, of course, we are set to do our best to support countries and globally so that these new tools are used for the good of people for people centred progress to reduce the inequalities that exist and have been exacerbated during this pandemic within countries, among countries thanks to the opportunities, thanks to these new digital tools and to avert the risks and challenges or reduce or minimize the risks and challenges which come with the new tools.
So that is the overall objective I wanted to put in front of you first. Technologies, of course, will more and more determine the economic pathways of countries big and small, you know, advanced and less advanced. So we really need to have a framework, we believe, at the UN, a global framework which happens to be already starting in several places, a regulatory framework you asked about.
Many rules exist whether they are set by official institutions or in practice by private actors, many rules exist. The question is whether they are the right rules, the good rules which will help us to progress together. And for people to have, you know, their dignity respected online as it is offline for them to be able to seize the opportunities in the new employment and job markets, and this kind of things.
So what do we need? We need, of course, infrastructures. We need access to the infrastructures. We need skilled people to be able to be users of all of this, and to do all of this as the President of the EB said, we need investment to support all of this. We can, you know, refer to the European Union who has started and I have here the honorable representatives have started to set proposals about regulating the digital market and the digital services, and that is very welcome development which can inspire others.
Of course, there are, when we talk about regulations, we have to define a little bit what we want to regulate for what purpose. So it's not just a blanket approach. And there are different levels. Some regulations will be adopted at the national level, of course, or regional level, but we believe as UN that the area we are talking about, new technology, the Internet calls for a regular approach, and we offer the platform of the UN as a place where this debate can be developed in a global way and bring possibly consensus over the core principles we need in these regulations.
And as you know, the Secretary‑General has presented a roadmap for technology cooperation and the office of the technical envoy is busy with the membership and the multi‑stakeholder community to implement the pillars of that vision and which is for an open, free and safe, secure Internet for all.
Other entities of the UN like UNESCO have started putting the basis for, say, some principles in the area of Artificial Intelligence, other like ITU are working on connectivity. I mean, they all consolidation of the UN entities has started working on implementing these principles. And let me add one more thing, which is that in September the Secretary‑General presented his vision in a report called Our Common Agenda, and in that one, you have the cross‑cutting theme of technology, people‑centred digital transformation.
And also in that document, we have the ambition, we have set the ambition to reach what we call a Global Digital Compact in the year 2023, and I will come back to that in a second round maybe and tell you a little bit more about it. Thank you.
>> MODERATOR: Thank you very much, for sharing your views and experiences. It's really important that you have mentioned the regulation because we are just in front of discussing the regulations at the European level. We have the agencies like DSA, DMA, digital market acts, digital services act, discussing discussions on the platforms in that future sense of the Internet and the freedom of doing businesses and being online. Now, I would like to ask Mr. Henri Verdier French Ambassador for digital technology and Mr. Ambassador, you have quite a bit of experience as we discussed yesterday from the entrepreneur side, so it will be interesting to see your perspective and what French people are thinking about where they are going.
>> HENRI VERDIER: Thank you. I suggest you to take your devices because I will speech French.
The quality of the interpreting service is excellent because we are hosted by the UN, so I would like to thank the interpreters. But since we are discussing the digital transformation, I think it's important to make sure that we can all speak about the values we uphold and we want the diversity of voices to be heard.
50 years ago somebody who had a vision invented the Internet. The Internet became the greatest platform or innovation for humanity. It became the greatest platform enabling economic growth. It was a huge dream, and it has become something that has changed the world.
Today we need to face important challenges. The first challenge is the digital divide, and inequalities in terms of access to Internet Artificial Intelligence and other aspects. Public data, education model wills, and Artificial Intelligence.
There is another risk, there is another threat, which is related to cybersecurity or cybercrime. There are states and actors who attack digital infrastructure. Let us also mention that specific business models are becoming degenerated, fake news and on social media. Very often there are certain economic models that will need to be regulated, but regulations must be developed in cooperation with representatives of major sectors of the economy.
So to answer your question, Minister, let me tell you that we need to develop good regulations that will respect neutral and open Internet and these regulations must be based on the rule of law. We need a multi‑stakeholder approach and we need respect for the law law because, of course, there are also negative solutions regarding the Internet.
Someone once said that there is a simple solution to every complex problem, and that's what we want. We need simple solutions but they need to be accurate and reliable as well.
>> MODERATOR: Thank you Ambassador, so it's really important to regulate but not to overregulate because it may slow down the innovation and in the end development of the digital world. So we it's always very important and very good to keep the balance between those two areas.
Now, I would like to ask Mr. Viktors Makarovs, Special Envoy on digital issues at the mission of foreign affairs Latvia to provide us your perspective, sir.
>> VIKTORS MAKAROVS: Thank you Mr. Chair.
I would like to go back to your introduction where you shared with us how difficult the pandemic has been for the Polish enterprises and businesses. And I think the Latviaen experience has been very much the same. I think there are interesting upsides to that as well. I'm quite sure that the economic damage from the pandemic would have been even more devastating had society and businesses not relied on the elements of digital infrastructure, such as widespread access to Internet, strongly digitalized public services.
So this is prompted and this is the upside, this is prompted not just the businesses but also the societies to say it's actually possible to digitalize much more. They have been nudged and they have discovered that it is now not in five or ten years.
So you asked what the challenges are. I will not tell you all of the digital transformation strategy we have. It's a long document. I will give you five. My main point is going to be that for the businesses to digitalize, it's not happening in a vacuum. It's not going to be just about businesses, it's about the societies as a whole.
So challenge number one for our businesses is actually to adopt digital technologies. The traditional ones, for some reason it's not happening as fast as we would like, but there are also new technologies coming up art mentioned, Artificial Intelligence, Cloud Computing, big data. We have to learn to use these technologies, otherwise we will not be competitive.
The second challenge is about the workforce. Sometimes we have general problems with lack of workforce numbers, but we also have the specific issue of upskilling people to work in enterprises that need to digitalize. This brings me to challenge number 3, human capital. It's about skills such as basic skills. We need to upgrade. In Latvia, this is one of the priorities for us. Mid level skills, but also we need more ICT experts.
But it's not just about skills. It's also about values and trust in digital. Without that, skills are not going to be relevant. Without that people are not going to buy into the drive to digitalize. Latvia is one of the countries with some of the best Internet.
One in four Latviaen households only have mobile broadband, but 5G is coming. It should be coming much faster. The ambition is for us in six years to have at least four Latviaen cities with full 5G coverage. This is number four.
And number five is regulation that was already mentioned here. Now, for Latvia, a small country in the European Union, our regulatory environment is basically what the EU provides through the single digital market. Digital market has already been mentioned here. It has to provide fair access and fair competition, otherwise the small and medium enterprises will lose out to the big companies.
We hope that this regulation will be adopted next year, and we do place all of our hopes into the French presidency of the EU Council, but also the Artificial Intelligence, it's going to establish rules for what you can and cannot do in terms of applications of Artificial Intelligence. This is what the businesses absolutely need for them to innovate and for them to dare to implement AI in their homes.
There are also a number of other regulatory acts coming up in Europe that have this very important impact on the businesses, that they have to create more crust in digital without which businesses will not survive. I will stop here. Thank you very much.
>> MODERATOR: Thank you very much. I like very much the challenge number one, the slow or low implementation of the latest digital technologies by small and medium‑sized businesses because we see that continues on the European Union level. We have this Digital Society and Economic Index and we have measures in the advance of the digital projects and services implementation on the side of the Member States, and if we go deeper into the index, we see that small and medium‑sized enterprises are quite slow. In many countries they are much slower than administration, which is sometimes surprising.
Having said that it's a great moment because we are in the middle of our discussion. I would like now our technical team to provide us with a video message from the Deputy Prime Minister from Russia, Russian Federation.
>> Very good day participants of the IGF. We all realize that despite negative consequences, the pandemic has become the engine of digital transformation around the world changed the attitude toward technology and influenced the development of the digital economy. People around the world have become more likely to use digital services more likely to resort in LAN services and in Russia the digital technology industry is developing. Digital transformation is our national development goal. And position in STEM education is among the strongest in the world.
Our IT industry is represented by tens of thousands of companies and hundreds of thousands of specialists. Our exports of software is constantly growing. This year, export of software and services has grown by 20%, and the powerful incentive system for the IT sector has been built in Russia. Stage by stage, measures to support the development of IT industry have been implemented.
As an example, competitive grant awards are organized for IT projects and companies implementing digital solutions. The total amount of grant support is about 4 billion rubles per year. I believe that the goals and IT solutions and the digital economy are impossible without cooperation on a global scale, without the synergy of solutions, and most importantly, the development of the international legal framework.
As you are all aware, the goals of the investment is always directly related to clear and understandable rules of the game. And I would like to stress the need to speedy development of command to the protection of the personal data on the global scale in order to balance the rights and responsibilities of all partners in the digital environment.
Another of the most important areas of activity for us today is to remove the existing regulatory barriers and impede the introduction of Artificial Intelligence technologies into the economy. The issue of ethical regulation in the field of AI is relevant all over the world. Russia's top priority is human centric AI that must work for the benefit of society.
Russia recently developed and adopted the code of ethics of AI signed by leading companies, universities and foundations. The code formulates the basic principle of AI use, transparency, trust, responsibility and reliability, inclusiveness, security and confidentiality. I would like also to note the importance of the harmonizing the international legislation in regulation of the global Internet and the activities of technology companies.
In this regard, we note with interest the recent initiative of the United Nations Secretary‑General to develop a Global Digital Compact. Russia is open to dialogue with all interested states, companies and experts communities. We are very honoured to have received the UN confirmation that Russia will host the 20th UN IGF in 2025. It will be a great honour for Russia to host the forum, and it is part of recognition of the firm positions of our country and development of the information society and digital technologies.
We intend to ensure the broadest participation in all stakeholders of the forum. At the same time, we are sure that the practical outcomes of the forum will guarantee the openness and security of the Internet. I wish all participants a constructive dialogue and fruitful discussion at the forum. Thank you.
>> MODERATOR: Thank you, Deputy Prime Minister, for a very interesting perspective, and Russia will be hosting in 2025 IGF, so there is quite a nice queue in front of us. It will be Ethiopia, then Japan, then Russia. It's very interesting IGF scenario in front of us.
Back to our discussions to our on stage discussion, lits move a little bit and focus on the business side of the perspective from, of the digital perspective such as startups as well as small and medium sized companies. They play important and extremely important role in digital transformation, and the crucial in this perspective is funding. We do have different funding packets, I would say, and to fully capture the growing demand for their products and services or to invest more in research and development, especially important in the lits say newest economy.
So it's really important area. So because the time is running very fast, much faster than we expected, so I would like now to limit your intervention to two, three minutes per person in the same order. Actually, there will be questions, open question to all of our guests on stage again. So back to the business side, so how can we encourage startups or small and medium‑sized enterprises to innovate and use more digital technologies? That's the question number one.
And what funding models could you recommend based on your experience from the public money, from the public venture capital money, private equity, European programmes, your individual perspective from our territories or area you are covering. I would like to start again and give the floor again to Huria Ali Mahdi.
>> HURIA ALI MAHDI: Thank you again Mr. Chairman.
Thank you audiences again for your patience. First of all, I would like to say we have to recognize today's innovation is often emerge from the startup community. If we dare to exploit this potential for good, we support startup or start from the basics, both who have when you come to Africa, there are plenty of young people, users, so they are very innovative. They can have plenty of innovative ideas so you can start from the basic.
We can benefit, that's what I believe. The other thing is in developing nations like Ethiopia, a few years before access to finance, access to available infrastructure, access to working space were very luxury. Even now infrastructure is a must being constrained at this time, especially for to grow in business locally as well as globally.
This is the challenge that we are facing, so, therefore what the Government and the private sector like local, regional, and global should invest in infrastructure. This is what we propose and the investment should include an investment in power infrastructure. Hence, I believe Governments should address critical such as the bottleneck, for example in registrations of startup, and innovative business, the establishment of the Innovation Fund and it's disbursement.
So we need to forecast from the beginning how it's registered, how it certifies and how we attract our innovative businesses from the establishment of their innovation in funding and disbursement. So this issue should be addressed some kind of legislations or limb sar legal frameworks.
So we need to have a good legal frameworks. Also Governments should consider tax and custom‑related incentives, financial incentives, administrative support incentives for investors, even though they have good ideas, they may not have enough resources or enough finance. So we have to think on their making them free of tax, custom related incentives and financial incentives.
This would help to financial impediment that SRAs and startup will be realized. Government and development partners and private sectors also expected to establish a system which positively responds to the financial, legal, technical challenge entrepreneurs face in process of realizing their dreams.
So another critical factor I would like to mention here is the data innovation. Data and innovation. As you all know, data is at this time a new oil. So it's a new oil that needs the use of new tools approach to approach, collect, aggregate, analyze and use to benefit the nation.
So this process demands the collaboration of all SMs. So we have to take it in a very serious way. So one of the major strategic approach should be Government should be transparent towards data. So if it's an expensive data, so we have to be transparent towards the data. As you know, different Government institutions collect and capture traditional data to carry out their mandates.
So we have to believe out of the traditions. We have to make it serious. So the data should be anyone can access, youth and use it for any purpose. So we need to be very transparent. Also policy on access and use of non‑traditional data also requires effort from the Government side. With this, we can help startups to drive innovation using open data and contribute national development agendas.
In general, we have to make our data open to those who have an idea, creative ideas and who can access it in a very easy way. So for the funding, the second question, should I continue?
>> MODERATOR: Yes, just for 30 seconds, if you could just comment on the funding.
>> HURIA ALI MAHDI: For funding as far as I'm coming from the developing country, this is very interesting question. So my response is would prefer all, all because we need to have different options for our innovators and creativities of their ideas.
So I don't know how it works in other nations, but for developing nations like Ethiopia, my response would be all so it can help weak startups struggling to realize their dream due to the shortage of finance. So we have to use all of the options to come on on board with the other countries.
>> MODERATOR: Thank you very much, Minister, we will go back to that question. There will be also time in the last round. So if you could comment more on the investment side would be also great. Thank you, Minister.
Now, I would like to turn to the next speaker, President Teresa Czerwinska with very big experience in finance and in financing activities so I'm really wondering your perspective on the subject.
>> TERESA CZERWINSKA: Thank you very much, Minister, and actually I would like to pick up where the Minister has left because Ministers spoke about financing.
So let me start with saying that different types of financing at different stage of development of enterprise is needed at early stage different type of financing and later on we need different type of financing. So also different sectors require different type of financing, and I absolutely agree with the Minister who said that we need as a public institutions and policy makers to have broad palet of financial instruments to support digitalization for SMEs and startups to choose from.
And, however looking at the broader market perspective, we observe the biggest financial bottlenecks in the areas of the risk‑sharing mechanisms, namely instruments like equity and venture debt finance, so precisely among the instruments which are best fit for supporting innovation and driving technology change.
So to address these gaps, the further exacerbated by the pandemic, by the way, the DAB group has developed a dedicate approach and our motto is lending, blending and advising. So it means that we are offering wide pallet of intermediate products including loans, guarantees and securitization along with equity and quasi equity financing.
But what is very important, we are blending our financing with other sources of financing. For example capital market instruments and EU grants as well. So to be sure that the financial structure is fit for purpose, for particular project. And finally, on advising, we are offering technical assistance to support our clients to prepare projects, and we are with our clients from the beginning to the end, from the preparation stage to the end of the project to the finalization stage.
So and our experience is advising and technical assistance is very much needed. And on SME, very shortly I would like to underline that SMEs and mid caps are our absolute priority, and let me give an example. In 2020 around the IB group, supported over 420,000 SMEs and mid caps with new financing, employing four million people, and support for SMEs counted for 40% of our lending volume.
In absolute terms, it represented almost 31 billion Euros annually from around 77 billion Euros of our financing as EIB group. So we are proud that we support SMEs, mid caps, startups and we are acting exactly where our financing is very much needed at very early stage of projects from well known companies and also we are supporting high technical unicorns.
>> MODERATOR: Thank you for this perspective. No you, I would like to ask Maria Francesca Spatolisano for answering the same question. So are startups supported enough, and SMEs advanced enough in digital technologies or maybe there is a time for improvement?
>> MARIA FRANCESCA SPATOLISANO: Thank you very much, Minister. I think that something that was already said on this stage is very important. We must make startups and small and medium‑sized enterprises and micro enterprises more aware of the benefits they can acquire from the connectivity, the Internet, et cetera.
But first of all, of course, we have to provide that connectivity. You know that in theory at least, 95% of the world population is within reach of a mobile cellular network, but in practice, we still have according to the latest report of ITU, 2.9 billion, almost 3 billion people will remain offline that have not used that opportunity.
So awareness and more training and more skilled people who are maybe potential entrepreneur would reduce that gap, but I have to add I was told in this first, in day zero and in this first day, that there isn't only skilled or access. There is also a question of affordability.
And so SMEs might find that the cost of using the digital technologies is too steep. So we need to provide access, but it has to be affordable, and it has to be accessible. Now, another thing which is important, of course, is the funding model, and I'm going very fast in all of this, because time is what it is.
Of course, in some countries, access to risk capital is easier than in others as the Minister was saying in particular, and where that access is possible private equities, venture capitals step in and help startups and I have here a figure which is telling. The venture capital is estimated the venture capital investment has grown by a factor of 20 since 2002, and could reach 580 billion in 2021, so there is enormous potential.
But, of course, where these markets are underdeveloped and there isn't that easiness, the development finance institution has to step in, regional development banks, and similar institutions. And I would just say that this is what the EAB is doing with guarantees in lending, but I would say there is also maybe a little bit too Orthodoxy in this kind of operations, and I can tell it because I was with European Commission for a long time, so you will forgive me if I voice this.
And sometimes a little bit more of risk taking would be helpful, I think, to invest in this area and in countries which definitely need the support. So linking, of course, private investors with companies is fundamental, and there are many ways to do that. But more advisable maybe and speedier keeping the pace with dynamic of this sector. Thank you.
>> MODERATOR: Thank you very much. I just would like to mention that, for example in Poland at the moment, 70% of the money invested on the venture capital market is public money. So it's really the support from the Government is really important not only on the maybe very first stage of the startups and small grants, but also on the little bit higher tickets.
Now, I would like to turn to Mr. Ambassador because I have been, yes, we will be having a time to wear our headsets, and I remember a few months ago there was a very interesting Conference in France, Diva technical and two subjects was digital technologies and the financing, financial side and supporting startups. So if you could answer the question or mix your intervention having in mind those two areas.
>> HENRI VERDIER: Thank you very much. As the Minister has head, the country is first and for most responsible for the establishment of the necessary infrastructure, and especially in the Developing Countries. We need to ensure access to Internet, access to free, open and safe infrastructure.
So this is the united Internet that we have in mind. The kind of Internet that is truly open and free because these days we are often confronted with the Internet that is not completely free, that is under the surveillance of operators.
But going back to the banking services and the sources of financing, well, the important economic and financing issues need to be tackled by public institutions in cooperation with private actors, and France as an EU member state also offers venture capital, but the Government has not become a risk taker.
What you need are special experts on venture capital, but still a degree of public/private collaboration is indispensable. So you mentioned high technical unicorns. These type of companies require a completely different financing tools. We would also like to be able to support SMEs in their digital transformation because they offer the greatest number of jobs.
These companies usually do not have sufficient resources to employ experts, advisors, consultants on digital transformation. So there are public policies implemented in France that help SMEs gain access to the necessary expertise so that they can tap into the potential of the digital transformation.
>> MODERATOR: Just to also give you an example from Poland, we are in the middle of having implemented probably the biggest, as we know in Europe at the moment, the project we call is Open Education Network. So we are connecting 30,000 schools to the high speed Internet and providing the access to the network in that perspective also has a bandwidth for more startups, maybe more innovation and creating more value. So now there is a time for Mr. Viktors Makarovs and your comment on that question on the investment side or the business side.
>> VIKTORS MAKAROVS: Thank you very much.
Well, first of all, you asked how we can encourage startups to innovate. We don't need to encourage startups to innovate. We need to encourage people to create startups. That's the absolutely key thing. Do people want to do this? Do they want to risk their time and energy? Do they want to do it in my country. That's what I as a Latvian Digital Envoy imminute interested in and I'm happy that the answer is very often yes. People want to innovate in my country, become part of our economic system so to say.
So you need good conditions for that. As for the startup SMEs it's a different ball game. We have talked about that. You need very much like the Ambassador said certain policies to inform to offer direct and indirect incentives such as subsidies or requirements for qualifying for some of the support programmes. Some of the things that we do in Latvia is, and this is a European basically model, the digital innovation hubs that guide entrepreneurs towards employing technology, promotes digitalization.
For example they will create a digital, they will establish, create a digital audit for a small or medium enterprise or help learn about digital solutions. So this is where the public authorities have an important role to play. As for financing, and I have to be quite honest with you, we asked preparing for this conversation people from the actual ICT sector what they think about funding in Latvia, and their answer was startups all funding models work depends on the situation. Everything goes as long as investment conditions are favorable for the startup such as adequate equity sharing.
The investor should not be toxic. So ranges of options. For the non‑startup SMEs for them to adopt digital, again, it depends on lots of factors. Sometimes the SMEs will have easier access to credit line because they are established companies, unlike, very much unlike the startups. The venture capital that was mentioned here, it's good for businesses with high growth potential, funding needs for development of new product, rapid growth ambitions, again, for startups this is probably the right solution.
Interestingly in Latvia, when I talked to some of the ITUC businesses, they are not very much interested for an investment. They talk about organic growth. So they like what they do. They want to keep doing what they like. But that, of course, is just part of the picture.
And, of course, grants have been mentioned here. Everyone likes them. I don't think we can cover everything with grants. And public investment, again, for what we hear from the sector, it depends. It mostly works in areas where private investment fails or is not sufficient.
>> MODERATOR: Thank you very much. Since we are running out of time, but I think is that the discussion is extremely interesting so I will go ahead anyway and we are in the front of the last part of our panel called voluntary commitments or comments. So if there is anything else you would like to leave us with or add or comment, so please do so, just a short statement or message from your perspective 30 to 60 seconds per person. Starting from the Minister.
>> HURIA ALI MAHDI: Thank you so much. I would like to add one thing that I didn't include. The Government of Ethiopia essentially have legally established national Innovation Fund, and recognize, like, investment, venture capital, equitable capital, domestic for this.
As you understand private investors are focusing on the less risky, so the Government wants to through the high risk innovative ideas. So we establish on that, so we are working with the national bank and commercial bank to avail their 5% for the startup using the intellectual property. This is what I would like to add. The other thing is as we are the second host, the next host in Ethiopia, I would like to invite all of you to Ethiopia to have a very good host. This is what I would like to add. Thank you so much.
>> MODERATOR: Thank you, Minister, for the invitation. I hope that we will do our best to visit Ethiopia next year. Ms. President, your perspective.
>> TERESA CZERWINSKA: Thank you. Ladies and gentlemen, the European Investment Bank, we fully recognize the benefits offered by digitalization and as demonstrated by the recent pandemic crisis, digitalization is absolutely instrumental to ensure robust and sustainable growth for decades to come.
And without that the world ahead of us is digital, and I would like to announce that in the course of next year, we will explore ways to better define, measure and report on digitalization across all EIB lending areas, and this exercise ultimately aims at researching investment gaps and redirecting EIB lending to better address gaps guiding future EIB support for digitalization. I'm proud to say that our support matters for EU technology leadership.
In 2020 out of 52 European venture bank high technical unicorns, 28 were supported by the European investment fund. So we strongly believe that our continuous effort to better capitalize on digital technologies and digital skills will bring tangible results, better quality of jobs, but what is most important better quality of life for everyone. Thank you.
>> MODERATOR: Thank you, Ms. President. Ms. Maria Francesca Spatolisano, your comment on that question.
>> MARIA FRANCESCA SPATOLISANO: Thank you. Yes, the UN as you all know is committed to the roadmap of technology cooperation of the Secretary‑General through an Internet that connects, respects and protects, and we do that through a number of multi‑stakeholders, venues, we call them round tables and we engage all of the participants in the IGF, and many others, but I would like in conclusion as I promised in the beginning say a word about the Global Digital Compact the Secretary‑General proposes to conclude in the year 2023.
This should outline shared principles for an open, free and secure digital future for all, and address very complex, no hiding their digital issues. For instance, reaffirming the fundamental commitment to connecting the unconnected, and leaving no one behind, avoiding the fragmentation of the Internet because it is a global public good, providing people with options as to how their data is used, and also very importantly the application of human rights we enjoy offline, also online, and finally, promoting trust for the Internet, introducing accountability criteria for all of the actors, public and private, for discrimination, misleading content, and all of the abuses which unfortunately can happen.
So with this objective in mind, we call on everyone. There will be very broad consultations, of course, to build this kind of consensus and, of course, the IGF can give a very important contribution. Thank you very much.
>> CHAIR: Thank you very much. Mr. Ambassador.
>> HENRI VERDIER: Can you imagine a digital world without Linux, MySQL, Apache, OpenStreetMap, Wiki, so for everyone, even companies and startups, we should protect, promote, encourage and maybe finance digital. That's very helpful.
>> MODERATOR: Open source is also a very important segment, and Mr. Viktors Makarovs.
>> VIKTORS MAKAROVS: I have been talking my country most of the time today. This is the part for international commitment, and we will work through the, or with the UN system through ECOSOC and technology facilitating mechanism to share our experiences and knowledge in how technology could be better helping to achieve SDGs through the ten member group. There is a Latvian expert working there. We will continue supporting that. We will share our expertise and best practices in the UN group of France on digital technologies and group of friends on E‑governance and cybersecurity groups and lastly and more broadly, we go together with like minded countries advocate digital governance that protect human dignity and human rights without which sustainable digital growth is not possible. Thank you.
>> MODERATOR: Thank you very much.
Ladies and Gentlemen, just so very shortly conclude, so one thing is for certain, the progress of digital transformation in all aspects will continue, and we need to become more agile as adopting technologies, legislation or stimulate investment. At the same time, people should be in the centre of our activities. I would like to thank again our speakers for the truly excellent contribution and for sharing with us here in Katowice their thoughts. Sorry for being a little bit late, but it was worth, I hope, to have us a little bit longer on stage. I would like to thank the audience for your attention, and I wish you fruitful Conference. Thank you again. Let's give a big round of applause for our panelists. Thank you.