For years, Bulgaria, Croatia, Poland and Romania have occupied a flattering place in Europe’s economic imagination: diligent improvers, able manufacturers, reliable beneficiaries of integration. It is not a false story—over the past two decades, these economies have narrowed the income gap with Western Europe through rising productivity, foreign investment, infrastructure spending and deep participation in European value chains. But successful stories often outlive the conditions that made them true.

That is why the World Bank’s latest assessment deserves attention, and a degree of challenge. Its diagnosis is useful. It points to weak managerial capabilities, slow digital diffusion, underinvestment in intangible assets, financing systems that do too little for innovation and patchy policy coordination. All of that is real. 

But the report still frames these shortcomings largely as gaps to be closed, as though a better mix of skills, support and technology uptake might be enough. That feels too gentle. The deeper problem is not that too few firms have adopted the right tools. It is that too many are still organised for an older era.

That distinction matters. There is a large difference between digitising a company and reinventing one. A business can buy software, add dashboards, automate a few workflows and still remain conceptually unchanged. It can become more efficient at doing work that is no longer distinctive, no longer sufficiently profitable and no longer future-relevant. The real test is whether firms are changing how decisions are made, how capital is allocated, how managers are developed and where value is actually created.

The World Bank report gets close to this harder truth, even if it stops short of saying it plainly. Across the four countries, many firms still lack the technological and managerial depth found in Europe’s frontier economies. 

In Croatia, digital tools are often adopted only partially, leaving businesses to straddle old and new systems at once. In Poland,, many entrepreneurs say they do not need further digitalisation or additional skills investment. In Bulgaria and Romania, smaller firms remain well behind EU peers in cloud use, big-data adoption and e-commerce. 

Intangible investment matters

This is not just a lag in uptake. It is evidence of firms that have not yet rebuilt their operating logic for a more intangible, data-rich and AI-driven economy. That is why intangible investment matters so much. Assets such as software, data, intellectual property, design and management systems are no longer peripheral. They are central to competitiveness. Yet the four countries remain weak here. 

Even in Poland, only 26 per cent of total corporate investment goes into intangible assets, against an EU average of 37 per cent. Bulgaria and Romania appear lower still, with investment often concentrated in basic software rather than in the deeper capabilities that help firms absorb technology and reorganise around it.

This is where the assessment could have been blunter. The issue is not only that firms need more support to modernise. It is that many have become too comfortable with a model of incremental improvement built for a phase of catch-up growth that is now fading. Integration into European supply chains was a powerful engine of progress. But it also encouraged a style of success based on efficiency, cost discipline and external demand rather than on originality, stronger management and higher-value creation. The next phase requires more than better adoption. It requires a different kind of firm.

Poland, which has recently edged past Switzerland to become the world’s 20th largest economy with over one trillion US dollars in annual output, is the most instructive case precisely because it is the strongest of the four. It shows what progress looks like, but also what still holds the region back. A country can outperform its neighbours and still carry the assumptions of an earlier model. That is the real warning here. Success can conceal the need for reinvention just as effectively as failure can.

So yes, the World Bank is right to stress digital diffusion, skills and innovation. But its own evidence points to something more demanding. Bulgaria, Croatia, Poland and Romania do not simply need more modern firms. They need firms willing to abandon the habits that made sense in yesterday’s economy. Regions do not become future-relevant by digitising their past. They do it by redesigning the firm.

Photo: Dreamstime.