The phenomena of spatial spillovers of digitalization and competitiveness inside European regions

This study examines the spatial spillovers of digitalization and competitiveness across 240 NUTS2 regions in the EU-27, addressing concerns about the widening digital divide and competitiveness challenges in the European Digital Single Market. Using Eurostat regional digitalization indicators and the EU Regional Competitiveness Index, we employ global and local spatial autocorrelation analysis to identify variables with significant spatial spillover effects. We then apply K-means clustering to determine regional susceptibility to digital and competitiveness spillovers. Our novel approach combines digitalization and competitiveness analyses at a granular NUTS2 level, revealing heterogeneous digitalization patterns across European regions. The research identifies regions where digital spatial spillovers are most effective and those at risk of being left behind. Additionally, both competitiveness and digitalization show a relevant nationalization effect, where the spatial spillover between regions appears inside each country with limited effect on neighbouring Member States. This comprehensive spatial analysis offers valuable insights for policymakers aiming to enhance open strategic autonomy, regional digital competitiveness and reduce disparities within the EU, aligning with the objectives of the Digital Decade programme and the Competitiveness Compass initiative.