Determinants of Digital Economy Development in the EU Member States: The Role of Technological Infrastructure, Human Capital, and Innovation (2017-2022)
DOI:
https://doi.org/10.12775/EiP.2024.31Keywords
digital economy, innovation, human capital, digital infrastructure, European Innovation Scoreboard (EIS), Digital Economy and Society Index (DESI)Abstract
Motivation: The rapid digital transformation in the European Union has highlighted the increasing importance of the digital economy in shaping national competitiveness. Recent studies underline the relevance of innovation, human capital, and digital infrastructure as critical factors driving digitalisation. Despite extensive literature on digital economy development, there is a gap in understanding the specific determinants that influence the digitalisation levels across EU member states. This study addresses this gap by examining the relationship between digital infrastructure, human capital, and innovation in fostering digital growth, using the Digital Economy and Society Index (DESI) and European Innovation Scoreboard (EIS) as key indicators.
Aim: The aim of this research is to identify and quantify the key determinants influencing the development of the digital economy in the EU member states between 2017 and 2022. Specifically, the study investigates the impact of technological infrastructure, human capital, and intellectual assets on the digital economy. By employing multiple linear regression models, the research aims to clarify how these factors contribute to digital economy growth.
Results: The analysis revealed that technological infrastructure and use of IT are consistently the most significant determinants of digital economy development. Human capital, particularly in terms of education and digital skills, gained importance in the later years of the study. Intellectual assets, such as patents and research outputs, also played a critical role, particularly from 2021 onwards. The findings suggest that countries with robust digital infrastructure, well-educated workforces, and strong innovation ecosystems tend to perform better in terms of digitalisation as measured by DESI. These insights provide valuable guidance for policymakers aiming to enhance digital competitiveness through targeted investments in technology, education and innovation.
References
Bach, M. P., Zoroja J., & Strugar, I. (2020). Investment of European Enterprises in ICT Education of Their Employees: Relationship with Country Competitive-ness and Digital Economy Development. 43rd International Convention on In-formation, Communication and Electronic Technology (MIPRO), Opatija, Croa-tia, 2020, pp. 658-663, doi: 10.23919/MIPRO48935.2020.9245227.
Bánhidi, Z., Dobos, I., & Nemeslaki, A. (2020). What the overall Digital Economy and Society Index reveals: A statistical analysis of the DESI EU28 dimensions. RegionalStatistics, 10(2), 42–62. https://doi.org/10.15196/RS100209/
Borowiecki, R., Siuta-Takorska, B., Maroń, J., Suder, M., Thier, A., & Źmija, K. (2021). Developing Digital Economy and Society in the Ligth of the Issue of Digital Convergence of the Markets in the European Union Countries. Ener-gies. 14(9), 1-26. https://doi.org/10.3390/en14092717.
Brynjolfsson, E., & McAfee, A. (2014). The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies. W. W. Norton & Company.
Bukht, R. & Heeks, R. (2017). Defining, Conceptualising and Measuring the Digital Economy (Working Paper No. 68). Manchester: Center for Development In-formatics, Global Development Institute, SEED. https://doi.org/10.2139/ssrn.3431732.
Castells, M. (2010). The Rise of the Network Society. John Wiley & Sons. http://doi.org/10.1002/9781444319514
Cesnauske, J. (2019). Digital Economy and Society: Baltic States in the EU Con-text. Economics and Culture, 16(1), 80–90.
Cseh-Zelina, G. (2023). Digital Economy and Society Index - from the Perspective of Hungary. JuridicalCurrent, 26(1), 21–34.
Decision (EU) 2022/2481 of the European Parliament and of the Council of 14 December 2022 establishing the Digital Decade Policy Programme 2030 (Text with EEA relevance), OJ L 323, 19.12.2022
Donosa, D. (2021). Digital Economy and Digital Education. Agronomy Series of Scientific Research / LucrăriŞtiinţifice Seria Agronomie, 64(2), 151–154.
Espinel V. A. (2016), The digital economy: what is it and how will it transform our lives?, https://www.weforum.org/agenda/2016/11/the-digital-economy-what-is-it-and-how-will-it-transform-our-lives/ (20.05.2024).
European Commission: Directorate-General for Research and Innovation, Hol-landers, H., Es-Sadki, N., & Khalilova, A. (2022). European Innovation Score-board 2022, Publications Office of the European Union. https://data.europa.eu/doi/10.2777/309907
Fuior, E., & Zavatki, T. (2022). Digital Economy and Economic Growth. Econo-myTransdisciplinarityCognition, 25(2), 57–71.
Gomes, S., Lopes, J. M., & Ferreira, L. (2022). The impact of the digital economy on economic growth: The case of OECD countries. RAM. Mackenzie Manage-ment Review / RAM. Revista de Administração Mackenzie, 23(6), 1–31. https://doi.org/10.1590/1678-6971/eRAMD220029.en
Grynia, A. (2022). Cyfryzacja jako determinanta międzynarodowej konkuren-cyjności gospodarki. Przypadek krajów europy środkowo-wschodniej.Optimum. EconomicStudies, 110 (4), p. 17-31. DOI: 10.15290/oes.2022.04.110.02
Jakubelskas, U., (2021), Evaluation Of Key Factor Of Digital Economy In European Union, “Economics and Culture”, 18(2), 41-50. https://doi.org/10.2478/jec-2021-0013.
Jaldemark, J., Håkansson Lindqvist, M., Mozelius, P., & Ryberg, T. (2021). Editori-al introduction: Lifelong learning in the digital era. British Journal of Educa-tional Technology, 52(4), 1576–1579. https://doi.org/10.1111/bjet.13128.
Janevski, Z., Petkovski, V., & Popovski, V. (2017). Prospects for Digital Economy in Six Countires in Southeast Europe. Economic Development / EkonomiskiRazvoj, 19(1/2), 79–98.
Jenčová, S., Vašaničová, P., & Miškufová, M. (2023). Multidimensional Evaluation of Eu and Slovakia in the Context of Digital Transformation Using Digital Economy and Society Index. Central European Business Review, 12(1), 65–95. https://doi.org/10.18267/j.cebr.313
Jurcevic, M., Lulic, L., & Mostarac, V. (2020). The Digital Transformation of Croa-tian Economy Compared with Eu Member Countries. Ekonomski Vjesnik, 33(1), 151–164.
Kiseľáková, D., Šofranková B., Širá E., & Redorčíková, R. (2022). “Assessment of the Digital Economy’s Level among the EU Countries - an Empirical Study.” PolishJournal of Management Studies 26 (1): 107–24. doi:10.17512/pjms.2022.26.1.07.
Laal, M. (2013), Lifelong Learning and technology, Procedia - Social and Behav-ioral Sciences, 83, 980 – 984.
Lazăr, C. (2021). The Evolution of the Digital Economy in Romania in the Context of the Eu Digital Single Market. Journal of Law &AdministrativeSciences, 16, 120–134.
Magoutas, A. I., Chaideftou, M., Skandali, D., & Chountalas, P. T. (2024). Digital Progression and Economic Growth: Analyzing the Impact of ICT Advance-ments on the GDP of European Union Countries. Economies, 12(3), 63. https://doi.org/10.3390/economies12030063.
Majovski, I., & Davitkovska, E. (2017). Human Resource Prerequisite for Digital Economy Development. Economic Development / EkonomiskiRazvoj, 19(1/2), 181–198.
McKnight, L.W., & Bailey J.P. (1998), Internet Economics. Cambridge, MA and London, England: MIT Press.
Moroz, M. (2017) The level of development of digital economy in Poland and se-lected European Countries: a comparative analysis. Foundations of Manage-ment, Vol. 9, 175-190.
Morrar, R., Arman, H., & Mousa, S. (2017). The Fourth Industrial Revolution (In-dustry 4.0): A Social Innovation Perspective. Technology Innovation Manage-ment Review, 7(11), 12-20. http://doi.org/10.22215/timreview/1117
OECD (2020), "Digital technology, the changing practice of science and implica-tions for policy", in The Digitalisation of Science, Technology and Innovation: Key Developments and Policies, OECD Publishing, Paris, https://doi.org/10.1787/29ae760f-en.
OECD, (2020), A Roadmap Toward A Common Framework For Measuring The Digital Economy, Report for the G20 Digital Economy Task Force SAUDI ARA-BIA, 2020.
Olczyk, M., & Kuc-Czarnecka, M. (2022). Digital Transformation and Economic Growth -- Desi Improvement and Implementation. Technological&Economic Development of Economy, 28(3), 775–803. https://doi.org/10.3846/tede.2022.16766.
Parker, G. G., Van Alstyne, M. W., & Choudary, S. P. (2016). Platform Revolution: How Networked Markets Are Transforming the Economy and How to Make Them Work for You. W. W. Norton & Company.
Parra, J., Pérez-Pons, ME., & González, J. (2021). Study Based on the Incidence of the Index of Economy and Digital Society (DESI) in the GDP of the Eurozone Economies. In: Rodríguez González, S., et al. Distributed Computing and Arti-ficial Intelligence, Special Sessions, 17th International Conference. DCAI 2020. Advances in Intelligent Systems and Computing, vol 1242. Springer, Cham. https://doi.org/10.1007/978-3-030-53829-3_16.
Petrić, M., Praničević, D. G., & Šimundić, B. (2020). Impact of Ict Sector Deploy-ment on the Economic Development of the European Union. FEB Zagreb In-ternational Odyssey Conference on Economics& Business, 11, 491–503.
Porter, M. E., & Heppelmann, J. E. (2015). How Smart, Connected Products Are Transforming Companies. Harvard Business Review, 93(10), 96-114.
Roszko-Wójtowicz, E., Dańska-Borsiak, B., Grzelak, M. M., & Pleśniarska, A. (2022). In search of key determinants of innovativeness in the regions of the Visegrad group countries. OeconomiaCopernicana, 13(4), 1015–1045. https://doi.org/10.24136/oc.2022.029
Schwab, K. (2017). The Fourth Industrial Revolution. New York: Crown Business.
Smith C., OECD (2020), The Digitalisation of Science, Technology and Innovation: Key Developments and Policies, OECD Publishing, Paris, https://doi.org/10.1787/b9e4a2c0-en.
Sorescu, A., & Schreier, M. (2021). Innovation in the digital economy: a broader view of its scope, antecedents, and consequences. Journal of the Academy of Marketing Science, 49(4), 627–631. https://doi.org/10.1007/s11747-021-00793-z
Švarc, J., Lažnjak, J., & Dabić, M. (2021). The role of national intellectual capital in the digital transformation of EU countries. Another digital divide? Journal of Intellectual Capital, 22(4), 768–791. https://doi.org/10.1108/JIC-02-2020-0024.
Szeles, M. R., & Simionescu, M. (2020). Regional Patterns and Drivers of the EU Digital Economy. SocialIndicatorsResearch, 150(1), 95–119. https://doi.org/10.1007/s11205-020-02287-x.
Śledziewska, K, Włoch, R., Słok-Wódkowska, M., Mazur, J., Paliński, M., & Syli-woniuk, M., (2017), Przewodnik po Jednolitym Rynku Cyfrowym dla MŚP, Warszawa: DELab UW.
Tapscott, D. (1996). The Digital Economy: Promise and Peril in the Age of Net-worked Intelligence. McGraw-Hill.
Tran, T. L. Q., Herdon, M., Phan, T. D., & Nguyen, T. M. (2023). Digital skill types and economic performance in the EU27 region, 2020-2021. RegionalStatistics, 13(3), 536–558. https://doi.org/10.15196/RS130307.
UNCTAD (2019), Digital Economy Report 2019, https://unctad.org/system/files/offi- cial-document/der2019_en.pdf (20.09.2024)
van Laar, E., van Deursen, A. J. A. M., van Dijk, J. A. G. M., & de Haan, J. (2017). The relation between 21st-century skills and digital skills: A systematic liter-ature review. Computers in Human Behavior, 72, 577–588. https://doi.org/10.1016/j.chb.2017.03.010.
Vasile, R. (2023). Digital Divide and Employment: From Job Disruption to Re-skilling Workers for the Future World of Work. In: Chivu, L., De Los Ríos Carmenado, I., Andrei, J.V. (eds) Crisis after the Crisis: Economic Develop-ment in the New Normal . ESPERA 2021. Springer Proceedings in Business and Economics. Springer, Cham. https://doi.org/10.1007/978-3-031-30996-0_22.
Vasilescu, M. D., Serban, A. C., Dimian, G. C., Aceleanu, M. I., & Picatoste, X. (2020). Digital divide, skills and perceptions on digitalisation in the European Union—Towards a smart labour market. PLoS ONE, 15(4), 1–39. https://doi.org/10.1371/journal.pone.0232032.
Webster Gleason, N. (2019), „The Digital Economy and Learning.”, In Work in the Age of Data. Madrid: BBVA.
Westerman, G., Bonnet, D., & McAfee, A. (2014). Leading Digital: Turning Tech-nology into Business Transformation. Harvard Business Review Press.
World Trade Organization, Organization for Economic Co-operation and Devel-opment, International Monetary Fund, & United Nations. (2023). Handbook on Measuring Digital Trade. USA: International Monetary Fund. Retrieved Jul 11, 2024, from https://doi.org/10.5089/9789287073600.071
Xia, L., Baghaie, S., & Mohammad Sajadi, S. (2024), The digital economy: Chal-lenges and opportunities in the new era of technology and electronic commu-nications, Ain Shams Engineering Journal, 15 (2), art. no. 102411. doi: 10.1016/j.asej.2023.102411
Yang, J., & Tan, F. (2023). Exploring the progress of global digital economy re-search: a bibliometric study via R-tool. Environment, Development &Sustainability, 1–31. https://doi.org/10.1007/s10668-023-04111-1
Zaharia, M., & Bălăcescu, A. (2020). Digital Economy and Society. Comparative Cluster Analysis of EU States. Journal of Applied Computer Science & Mathe-matics, 14(29), 30–36. https://doi.org/10.4316/JACSM.202001005
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2024 Elżbieta Roszko-Wójtowicz, Aleksandra PLEŚNIARSKA, Maria M. Grzelak
This work is licensed under a Creative Commons Attribution-NoDerivatives 4.0 International License.
Stats
Number of views and downloads: 261
Number of citations: 0
