Evolution of the Digital Economy and Society Index in the European Union: Α Socioeconomic Perspective

Abstract

The rapid development of information and communication technologies (ICT) in recent years has brought about significant changes in many social sectors such as communication, economy, entertainment, and others. To define the key role that ICT plays in its development course, the European Union (EU) has developed a composite indicator, the Digital Economy and Society Index (DESI), to assess the digital policy performance of its Member States. In the current work, an attempt is made to evaluate the performance of the EU countries on the digital economy and society with respect to implemented EU digital policies by studying the five dimensions of the DESI for the years 2014–2019, using the corresponding DESI reports (DESI 2015 – DESI 2020). Moreover, the digital convergence among EU Member States, in terms of similarity of their performance in the five dimensions of the DESI by grouping them according to the optimal number of clusters, is also examined. Since the optimal number of clusters is two, EU Member States are classified in two groups, one of high and one of low performance in the five dimensions of the DESI. The evolution of each member country and the possible transitions from one group to another during the years 2014–2019 is also a point of interest. The grouping of EU Member States into the two clusters showed that socioeconomic factors may affect the overall DESI. Linear mixed effect models confirm the positive effect of Gross Domestic Product per capita, the public expenditure for education and research and development (R&D) on the DESI and the negative effect of the average number of weekly working hours. The results could be used to reform the existing EU digital policies and identify areas where further improvement is needed.

Keywords

• digital economy
• digital society
• digital transformation
• desi
• european union
• k-means clustering
• linear mixed effect models