The Digital Competitiveness of European Countries: A Multiple-Criteria Approach

Abstract

High-quality digital infrastructure is the basis of almost every sector of a modern and innovative economy and society. As a part of the overall competitiveness concept, digital competitiveness is a multidimensional structure that encompasses various factors of the process of digital transformation through the ability of learning and application of new technologies, technology factors that enable digital transformation, and digital readiness factors that assess the preparedness of an economy and citizens to assume digital transformation. The paper aims to propose a methodology for measuring digital competitiveness using a composite index approach including a variety of various indicators. To assess the digital competitiveness of European countries, a multi-criteria analysis was applied in a two-stage procedure integrating CRITIC and TOPSIS as weighting and aggregation methods. The sample includes thirty European countries and the research is based on thirteen indicators provided in the database Eurostat Digital Economy and Society. In addition, a ranking of sample countries according to digital competitiveness is presented. Finally, a cluster analysis was conducted to examine relations between digital competitiveness and several economic performances such as GDP pc, labour productivity and employment rates. The results indicate that Nordic countries have achieved the highest digital competitiveness, while most Eastern European countries still lag behind.