Distinguished guests,
Ladies and gentlemen,
Allow me to extend a warm welcome at the National Bank of Romania for the 11th edition of Strategica International Conference titled “Managing Business Transformations during Uncertain Times”.
As we gather here today, let us start by acknowledging the remarkable economic transformation that Romania and, in a broader sense, the CEE region has undergone in the last three decades. Overall, I believe that it is a successful story of adaptability and resilience that deserves our recognition.
In just over three decades, Romania’s GDP has soared from around 40 billion USD to over 300 billion USD. GDP per capita climbed tenfold from a mere 1,600 USD to a substantial 16,000 USD. Yet, these figures only tell part of the story: the true impact of these developments can be felt in the quality of life and access to a much wider range of goods and services for most Romanian citizens.
Drawing from my personal experience, growing up in a village - 15 minutes away from the city of Oradea -, I've witnessed the outstanding leap in productivity brought by the emergence of new technologies. I've seen rural surroundings with hard-working people still using horse-drawn power in farming to modern agricultural equipment that seems pulled from science fiction. The opening of markets and the incorporation of new technologies have allowed us to speed up the convergence process with developed countries.
Moreover, a recent study conducted by my colleagues pointed to a close link between prosperity in Romanian counties and infrastructure accessibility. Counties with at least one stretch of highway exhibit, on average, 25% higher wealth compared to those without. It is evident that infrastructure, education and internet access are critical factors in revitalizing regions that may otherwise feel isolated from major urban centres.
Looking back in history, it seems we are experiencing a period of exponential growth. From the advent of agriculture some 12,000 years ago to the emergence of writing around 5,000 years ago, today, we can engage in conversations with digital assistants. This exponential growth has redefined the way we live, work and conduct business.
However, the challenges we face in our contemporary world are both extensive and intricate. The economic landscape is further complicated by geopolitical tensions, weakening global trade, populism and a shift in demographics, while new inventions also come with certain risks.
But we must remember that every generation lives through extraordinary times. We have experienced unprecedented transformations, from a global pandemic that incurred huge economic costs to embracing the imperatives of green and digital transformation. The disruptive potential of AI, even in its nascent stages, provides the prospect of heightened productivity and revolutionary changes in business operations. Recent studies, such as the one conducted by the IMF on 24,000 firms across 75 countries (Digitalization during the COVID-19 Crisis, 2023), underline the resilience of digitally advanced companies during economic downturns. Companies, private and public alike, must adapt to these shifts, even reimagining their supply chains to navigate the evolving global landscape.
At the local level, we still deal with high inflation, macroeconomic imbalances and an ever-present aura of unpredictability. We cannot emphasize enough the essential role of EU funds in managing vulnerabilities and preventing the middle-income trap. The National Bank of Romania made significant progress in lowering the inflation rate, but our work is far from complete. And, as other successful businesses do, we must perpetually strive for improvement. Flexibility [but implemented with calm and prudence] is of paramount importance for central banks in this uncertain landscape. In the words of Morgan Housel: "Things that have never happened before happen all the time." [So, don’t be too scared.]
Now, let us reflect upon the European project and the fundamental principles of democracy. It is important to remember that these achievements are not guaranteed but require the continuous dedication of each generation.
Our journey, while rife with challenges, showcases the potential for progress and prosperity. Our generation bears the responsibility of finding solutions to these radical transformations and changes. As we gather at this conference, we must remember that managing business transformations during uncertain times requires wisdom and collective effort. Despite the difficult environment, I believe the future is bright [it is also up to you].
Thank you, and I look forward to the insightful discussions that will unfold throughout this conference.
București, 26 octombrie 2023