AI as the New Test of Central European Convergence - Poland and Hungary Face the Same Challenge

Two Central and Eastern European countries with different growth structures and economic performances are both looking to artificial intelligence as a driver of faster development.

Artificial intelligence is not simply a new technological wave; it could become a test of the Central European growth model itself. According to the World Bank’s latest analysis on Poland, the country’s next stage of development can no longer rely on the same foundations that made it successful over the past decades: relatively low-cost labour, attracting the production capacities of foreign companies, and export-oriented industrial expansion.

One of the key drivers of the Polish economic success story – nearly three decades of almost uninterrupted GDP growth – has been the country’s transformation into one of the most important Central European hubs within Western European value chains. However, this model is gradually reaching its limits. Wages are rising, labour shortages are intensifying, while demographic ageing is placing increasing pressure on the economy. The question is therefore no longer whether Poland can create more jobs, but whether it can generate more value with the same or even a smaller workforce.

This is where artificial intelligence could play a decisive role. According to the World Bank’s assessment, Poland is unlikely to become a global pioneer in AI development; rather, it could become a country that adopts and applies existing technologies quickly and effectively. This carries an important message for the entire region: the next competitive advantage will not necessarily belong to those who develop the most powerful algorithms, but to those who integrate AI most effectively into business operations, public services and education.

The Polish example is also a warning from a Hungarian perspective. The two economies differ in size and structure, but they face a similar challenge: the previous convergence model is reaching its limits. In Hungary’s case, economic growth for a long period was based on expanding employment, industrial investment and attracting foreign direct investment. In the next phase, however, improving productivity will become the decisive factor.

According to McKinsey’s latest analysis, AI represents a significant economic opportunity for Hungary: automation could generate several billion euros in additional value by 2030, particularly if companies manage to integrate the technology not only into experimental projects but into their everyday operations.

The biggest challenge lies precisely here: large companies generally adapt faster, while a significant share of small and medium-sized enterprises still struggle with digitalisation gaps.

For the region, however, the AI race is not only a technological issue but also an infrastructural one. In Poland’s case, the World Bank specifically highlights the challenges created by coal-based energy production: higher electricity prices could become a competitive disadvantage in an era when data centres, computing capacity and digital infrastructure are becoming increasingly important economic assets. The lesson for Hungary and neighbouring countries is the same: AI does not create growth on its own; it requires reliable energy supply, strong networks, skilled labour and a supportive investment environment.

The key Central European question of the next decade will therefore not be who has access to artificial intelligence. The technology is becoming increasingly available. The regional competition in the coming years will be determined by which countries are able to transform AI capabilities into measurable economic performance.

Poland is now entering a new phase of convergence: it must move from a growth model based on lower costs towards a higher value-added economy. Hungary faces the same challenge: AI is not merely a technological opportunity, but a test of whether the economy is capable of transitioning into the next stage of development.