Search Results (39)

The main objective of the paper is to assess the importance of selected components of digital human capital in shaping the digital transformation capacity of European countries, measured through the Network Readiness Index. The focus is on basic digital skills, ICT specialists and ICT graduates in relation to the Network Readiness Index and its four pillars. The empirical analysis is based on panel data for 27 European countries in 2018–2024. Digital human capital is measured through selected DESI Human Capital indicators, while digital transformation capacity is assessed using the Network Readiness Index. Kendall’s tau correlation analysis and fixed-effects panel regression were applied. The results show that the analyzed components of digital human capital differ in importance. The strongest positive relationship was identified for basic digital skills. In the panel regression model, basic digital skills were positively and statistically significantly associated with the overall NRI, whereas ICT specialists and ICT graduates were not statistically significant. The study provides a differentiated assessment of digital human capital components and their relevance for the digital transformation capacity of European economies. Improving basic digital skills can support digital inclusion, reduce disparities between countries and enhance participation in digital society. Full article

Digital transformation is increasingly recognized as an important enabler of sustainable development and competitiveness in small- and medium-sized enterprises (SMEs). However, evidence on how different dimensions of digital transformation relate to the achievement of Sustainable Development Goals (SDGs) remains limited. This study explores the relationship between digital transformation and selected Sustainable Development Goals (SDGs) using an explanatory sequential mixed-methods design, in which quantitative findings informed the subsequent qualitative exploration and interpretation of managerial perspectives. The quantitative phase combined data from Eurostat’s ICT Usage Survey (2020–2024), including 60 sustainability-related indicators, with an analysis of the relationship between the Digital Economy and Society Index (DESI) and selected SDG indicators across 27 EU member states using Spearman’s rank correlation. The quantitative analysis suggests that Slovenia performs close to the EU average in overall digitalization, while significant associations were identified between digitalization and SDG 9. The qualitative phase consisted of semi-structured interviews with managers from ten Slovenian SMEs from different sectors. The findings indicate that managers perceive digital technologies, process digitalization, data-driven decision-making, and employee digital competencies as important contributors to sustainability-related outcomes, particularly in relation to SDG 8, SDG 9, SDG 12, and SDG 13. The study contributes to the literature on sustainability-oriented digital transformation in SMEs by integrating quantitative benchmarking with managerial perspectives. The findings highlight the importance of organizational capabilities, digital competencies, and strategic alignment in translating digital transformation initiatives into sustainability-related outcomes. The results provide practical implications for SMEs and policymakers seeking to support sustainable and digitally enabled business development. Full article

The contemporary global landscape is undergoing a profound reconfiguration driven by the structural synergy between digital transformation and long-term sustainability goals. Central to this evolution is the “twin transition”, where the digital economy serves as a critical catalyst for environmental responsibility and economic resilience. This research investigates the nexus between innovative entrepreneurship and sustainable growth across Central and Eastern Europe (CEE), with a specific emphasis on Romania’s development trajectory during the 2020–2024 period. By utilising a multi-dimensional statistical analysis of the Global Entrepreneurship Monitor (GEM), Digital Economy and Society Index (DESI), Global Innovation Index (GII), and European Innovation Scoreboard (EIS), the study evaluates how digital maturity influences innovation performance. The findings underscore that fostering sustainable entrepreneurship requires the cultivation of dynamic capabilities and a robust digital infrastructure to support an inclusive, knowledge-driven economy. While Romania exhibits a steady upward trend in its digital indicators, a significant performance gap persists compared to regional leaders such as Poland and Hungary. This discrepancy is largely attributed to structural bottlenecks in digital human capital and a deficit in local research and development investment. Ultimately, the study proposes a strategic roadmap focused on green-tech incentives and interdisciplinary educational ecosystems to bridge existing gaps and unlock Romania’s innovation potential within the framework of the European digital decade. Full article

This study examines the impacts of digital transformation on employment and labor productivity in the Gulf Cooperation Council (GCC) countries from 2000 to 2022 using a composite Digital Economy and Society Index (DESI) and a panel ARDL model. The results reveal a productivity paradox: digitalization is negatively related to labor productivity, despite significant investments in ICT and widespread digital adoption. In contrast, overall employment increases, driven by growth in the industrial sector, while employment in the agriculture and service sectors is found to decline. These findings highlight the mixed effects of digitalization—creating jobs without corresponding productivity gains—and emphasize the need for policies that improve skills, encourage organizational innovation, and support sectoral adaptation to fully harness digital technologies for sustainable economic growth. Full article

Digital transformation reshapes firms into more digital, data-driven, and customer-centric organizations. Because it often supports innovation, firms are widely expected to benefit from higher performance and productivity. However, it remains unclear whether higher national levels of digital integration translate into higher aggregate enterprise productivity. This study adopts a socio-technical and ecosystem perspective to examine the relationship between digital technology integration and enterprise labor productivity across the 27 EU member states, while also considering the role of key ecosystem enablers. A balanced country-year panel of data (N = 162) was constructed from Eurostat Structural Business Statistics on the apparent labor productivity of total enterprises, together with Digital Economy and Society Index (DESI) indicators on the integration of digital technology, human capital, connectivity, and Gross Domestic Product (GDP) per capita, covering the period from 2017 to 2022. To this end, fixed-effects regression models were estimated using robust standard errors clustered by country and combined with correlated random effects (CRE/Mundlak) decomposition. This methodological approach was adopted to distinguish short-run within-country dynamics from persistent between-country differences. The study contributes to ecosystem-level DESI research by using this distinction to assess how country-level digital integration is associated with enterprise productivity. The fixed-effects results provide no evidence that year-to-year changes in digital technology integration, on their own, are associated with higher enterprise productivity. Additionally, no statistically significant interaction effect was observed with either human capital or digital connectivity. By contrast, GDP per capita was found to be a robust positive predictor of enterprise productivity. The CRE/Mundlak results indicate that the majority of between-country productivity differences are attributable to differences in economic development. Furthermore, there is evidence of a positive association between the average level of digital technology integration and human capital. Taken together, these findings suggest that national digital technology integration reflects business environment conditions at the ecosystem level. While it may create opportunities for enterprise business model innovation, its productivity implications are more likely to emerge gradually through stronger absorptive capacity and complementary capabilities. Consequently, the study suggests that enterprise digital transformation policies should be aligned with investments in digital skills and broadband infrastructure. These policies should also support process redesign, greater interoperability, and the implementation of AI-enabled technologies. Full article

The accelerated growth of the digitalization process is making digital skills increasingly important in the global economy. The purpose of this research is to empirically assess the impact of digital skills on economic growth in the 27 European Union (EU) member states over the period 2017–2023. In this respect, to measure the concept of digital skills, we employed the following four indicators of the Digital Economy and Society Index (DESI): internet usage, enterprises offering information and communication technologies (ICT) training to their employees, ICT specialists, and ICT graduates, while economic growth was proxied by gross domestic product (GDP) per capita. In addition, to obtain a more nuanced analysis, we included a set of control variables likely to influence growth. In the first stage of the research, we apprised the effect and importance of each explanatory variable on the GDP per capita using the Bayesian model averaging (BMA), while in the second stage, we ran a two-step system generalized method of moments (GMM). Based on the results obtained from applying the BMA, ICT graduates, trade, the new EU countries, and the employed population are the main determinants of economic growth. In addition, the new EU countries and inflation have a negative impact on GDP per capita, and the post-COVID dummy exerts a predominantly negative effect and all remaining regressors boost the GDP per capita. Furthermore, the GMM estimations confirmed the outcomes obtained through BMA, which denotes that the research findings are robust to changes in the methodological framework and, hence, are reliable and valid. The results of this research indicate that ICT graduates and digital skills play a decisive role in driving economic growth in the EU member states, with ICT skills having a significant positive impact on GDP. Full article

Digital transformation is a key driver of economic and social progress, and assessing its evolution is essential for guiding public policies. In the European Union (EU), until 2022 the European Commission published the quantitative values of the Digital Economy and Society Index (DESI); however, it is no longer being published, which makes it difficult to compare the digitalisation process between Member States. This study proposes a new composite index, the DESI-DP2, constructed using the distance P2 methodology (DP2), which provides a synthetic and up to date measurement of the digitalisation levels in the twenty-seven EU countries in 2025, both at an aggregate term and by dimensions. The results reveal notable stability in the ranking of countries, with Denmark, Finland, the Netherlands, and Sweden as persistent leaders, and Bulgaria and Romania among the most lagging countries. Moreover, although digitalisation is positively associated with human development, a high level of development alone is not sufficient to ensure strong digital performance. Finally, the study identifies a shift in the explanatory factors behind cross-country differences, from digital skills toward the digital transformation of the business sector, offering relevant insights for the design of public policies within the framework of the European Digital Decade. Full article

Digital skills represent a key dimension of digital transformation, shaping the innovation potential, competitiveness, and long-term sustainability of the European economy. The aim of this paper is to compare the development of digital skills in EU-27 countries from 2018 to 2024 and identify the strengths and weaknesses within the European context. The analysis is based on secondary data from the Digital Economy and Society Index (DESI). From the total of 36 indicators included in DESI, 12 variables were selected, with an emphasis on 3 core digital-skills metrics: Internet use, ICT specialists, and ICT graduates. To assess their interrelationships and linkages with overall digital transformation performance, non-parametric correlation analyses (Kendall’s Tau and Spearman’s rank correlation) were applied. Furthermore, across-year nonparametric tests (Friedman ANOVA with Kendall’s coefficient of concordance, W) were used to evaluate year-to-year differences and the stability of country rankings over 2018–2024. The empirical results confirmed that higher levels of digital skills are associated with stronger digital transformation performance among EU member states, while significant cross-country disparities persist. Germany and the Nordic economies (Finland, Sweden, and Denmark) achieved the best results, while Southern and Eastern European countries such as Bulgaria, Portugal, and Greece lagged behind. These findings highlight the strategic role of digital education, ICT specialization, and lifelong learning initiatives in promoting sustainable digital transformation and competitiveness across Europe. In addition, panel regression analysis confirmed that digital infrastructure, particularly FTTP coverage and Very High Capacity Networks, is a key driver of digital skills development, whereas the effects of business digitalization appear indirect or delayed. The outcomes provide relevant implications for broadband deployment and user-centric digital public services to support the objectives of the EU Digital Decade 2030. The study contributes to a deeper understanding of the determinants of digital skills and digital transformation performance, providing evidence-based guidance for targeted digital policies aimed at reducing the digital divide and strengthening digital transformation performance within the European Union. Full article

The digital transition is a major contemporary challenge that unevenly impacts the life chances of occupational classes and the well-being of individuals. The decline of the working class, driven by skill-based technological change, further provides additional arguments for examining the impact of digitalization on individuals’ chances from a class perspective. The intersections between social class and gender deserve attention in relation to adult education participation. This paper aims to account for both individual-level characteristics—occupational class and gender—and macro-level characteristics including digitalization, measured by the Digital Economy and Society Index (DESI), and inequality, measured by the Gini coefficient. Analyzing data from the European Social Survey, Round 10 (2021/2022), our results show that digital performance in a given country is positively associated with the probability of participation in adult education. Women in countries with higher levels of digital performance are more likely to participate in adult education. We found evidence for a positive interaction between DESI and lower-grade service class for women, whereas in the case of men, we found positive interaction terms between DESI and small business owners, skilled workers, and unskilled workers. Full article

Small and medium-sized enterprises (SMEs) constitute the backbone of the EU economy, yet their uneven digital transformation raises challenges for competitiveness and territorial cohesion. This article examines the organizational and spatial aspects of SME digitalization across the European Union using Flash Eurobarometer 486 data and latent class analysis (LCA) combined with Bayesian multilevel multinomial regression. The results reveal four SME digitalization profiles—Digitally Conservative Backbone; Partially Digital and Upgrading; Digitally Advanced and Diversified; and Focused Digital Integrators—reflecting diverse adoption patterns of key technologies such as AI, big data and cloud computing. Digitalization is shaped by organizational factors (firm size, value chain integration, digital barriers) and territorial factors (urbanity, border proximity, national digital infrastructure as measured by the Digital Economy and Society Index, DESI). Contrary to linear modernization assumptions, digital adoption follows geographically embedded trajectories, with sectoral uptake occurring even in low-DESI or non-urban regions. These results challenge core–periphery models and highlight the significance of place-based innovation networks. The study contributes to modernization theory and regional innovation systems by showing that digital inequalities exist not only between countries but also within regions and among adoption profiles, emphasizing the need for nuanced, multi-level digital policy approaches across Europe. Full article

The COVID-19 pandemic forced European Union member states to accelerate the digitalization of public services, turning a gradual policy priority into an urgent necessity. This study examines the pandemic’s impact on the digital transformation of public administrations, assessing the effectiveness of digital-oriented interventions implemented during this period. Using a Difference-in-Differences (DiDs) methodology, the analysis compares treatment and control groups based on 2019 Digital Economy and Society Index (DESI) scores, with digital public services as the dependent variable. Independent variables include pre-filled forms, service transparency, design and data protection, e-government usage, internet penetration, total population, and governance quality, covering all 27 EU member states from 2016 to 2023. Data sources include DESI, Eurostat, and the World Bank. The analysis shows that countries with lower digitalization achieved the largest post-pandemic gains, with transparency, service design, and data protection significantly enhancing digital service quality. Pre-existing governance and infrastructure shaped the magnitude of these improvements, highlighting the combined role of preparedness and reactive policy measures. The findings underscore the critical role of citizens as end-users and accountability drivers in digital governance. By providing empirical evidence on pandemic-driven digitalization trends, this study contributes to policy discussions on resilience, strategic planning, and the future of inclusive, transparent e-government services in the EU. Full article

The shadow economy weakens fiscal sustainability, hampers the financing of public goods, and impedes the achievement of sustainable development goals. The informal sector remains a persistent challenge for policymakers, as it distorts competition, reduces transparency, and undermines the effectiveness of economic and fiscal policies. The aim of this article is to identify the key factors determining the size of the shadow economy in European Union countries and to provide policy-relevant insights. The analysis covers data on the share of the informal economy in GDP and macroeconomic variables such as GDP per capita, consumer price index, average wages, household consumption, government expenditure, and unemployment, as well as indicators of digital development in society and the economy (DESI, IDT), the share of cashless transactions in GDP, and information on the implementation of digital tax administration tools and restrictions on cash payments. Five hypotheses (H1–H5) are formulated concerning the effects of income growth, labour market conditions, digitalisation, cashless payments, and tax administration tools on the shadow economy. The research question addresses which factors—macroeconomic conditions, economic and social digitalisation, payment structures, and fiscal innovations in tax administration—play the most significant role in determining the size of the shadow economy in EU countries and whether these mechanisms have broader implications for fiscal sustainability and sustainable development. The empirical strategy is based on multilevel models with countries as clusters, complemented by correlation and comparative analyses. The results indicate that the most significant factor in limiting the size of the shadow economy is the level of GDP per capita and its growth, whereas the impact of card payments appears to be superficial, reflecting overall increases in wealth. Higher wages, household consumption, and digital development as measured by the DESI also play an important role. The implementation of digital solutions in tax administration, such as SAF-T or e-PIT/pre-filled forms, along with restrictions on cash transactions, can serve as complementary measures. The findings suggest that sustainable strategies to reduce the shadow economy should combine long-term economic growth with digitalisation and improved tax administration, which may additionally foster the harmonisation of economic systems and support sustainable development. Full article

This study investigates the multifaceted impact of digitalization on economic performance across the 27 European Union member states from 2017 to 2023. Using a comprehensive panel dataset, the analysis moves beyond aggregate metrics to dissect how specific digital levers contribute to trade performance and national income. A two-way fixed effects (FEs) regression model is employed to rigorously control for unobserved country-specific heterogeneity and common time-based shocks, with diagnostic tests confirming the suitability of this specification. The results reveal a complex and often counter-intuitive set of relationships. One key finding is a statistically significant negative association between the EU’s headline Digital Economy and Society Index (DESI) and goods exports, a paradox that emerges in the model once specific business-level digital tools are accounted for. This suggests that composite indices can be misleading for granular policy analysis. The marginal benefit of cloud adoption diminishes significantly in countries with higher levels of public investment in Research and Development (R&D), indicating a substitution rather than a complementary relationship between these two innovation channels. Full article

This study examines the development of the digital economy and society in the Republic of Kazakhstan by combining international benchmarking with a context-specific national framework. It highlights the limitations of existing global indices such as DESI, NRI, and EGDI in capturing the structural and institutional dimensions of digital transformation in emerging economies. To address this gap, the study introduces a novel composite metric, the Index of Digital Economy Development (IDED), which integrates five sub-indices: infrastructure, usage, human capital, economic digitization, and transformation effectiveness. The methodology involves comparative index analysis, the construction of the IDED, and statistical validation through a public opinion survey and regression modeling. Key findings indicate that cybersecurity is a critical yet under-represented component of digital development, showing strong empirical correlations with DESI scores in benchmark countries. The results also highlight Kazakhstan’s strengths in digital public services and internet access, contrasted with weaknesses in business digitization and innovation. The proposed IDED offers a more comprehensive and policy-relevant tool for assessing digital progress in transitional economies. This study contributes to the literature by proposing a replicable index structure and providing empirical evidence for the inclusion of cybersecurity in national digital economy assessments. The aim of the study is to assess Kazakhstan’s digital economy development by addressing limitations in global measurement frameworks. Methodologically, it combines comparative index analysis, the construction of a national composite index (IDED), and statistical validation using a regional survey and regression analysis. The findings reveal both strengths and gaps in Kazakhstan’s digital landscape, particularly in cybersecurity and SME digitalization. The IDED introduces an innovative, context-sensitive framework that enhances the measurement of digital transformation in transitional economies. Full article

The accelerating pace of digital transformation has positioned the digital economy as a key driver in advancing the Sustainable Development Goals (SDGs). However, the mechanisms through which digitalization influences sustainability remain underexplored. This study examines the extent to which digital progress, captured through the Digital Economy and Society Index (DESI), impacts sustainable development outcomes across EU member states, measured by the Sustainable Development Goals Index (SDGi). Utilizing data spanning the period 2017–2022, the analysis applies a multi-method approach—combining exploratory factor analysis, multiple regression, artificial neural networks, and predictive modeling—to identify structural relationships and forecast future trends. The findings reveal strong linkages between human capital development, digital technology integration, and SDG performance, while also highlighting significant heterogeneity among EU countries. Forecasts indicate that digitalization is likely to accelerate in the coming years. Still, its contribution to sustainability will depend on the degree to which policy frameworks succeed in fostering inclusive and context-sensitive digital transitions. By integrating empirical precision with predictive insight, this study offers a robust framework for aligning digital transformation with long-term sustainability objectives in a diverse European context. Full article