IDEAS home Printed from https://ideas.repec.org/a/eee/teinso/v72y2023ics0160791x23000118.html
   My bibliography  Save this article

Analysis of European competitiveness based on its innovative capacity and digitalization level

Author

Listed:
  • Marti, Luisa
  • Puertas, Rosa

Abstract

The competitiveness of countries can be measured through their innovative capacity and the level of digitalization they have achieved. Technological advances have proven to be an engine of economic growth, promoting employment and sustainable development. In Europe, policies are being focused on investments to make this the “Digital Decade”. Against this backdrop, the aim of the study is to analyse the competitiveness of the 27 countries of the European Union by producing a synthetic indicator that includes factors relating to innovation (measured by the Global Innovation Index) and to digitalization (based on the Digital Economy and Society Index), which in turn yields an annual ranking of the analysed economies between 2017 and 2021. Furthermore, in a second stage of the analysis, three panel data models are estimated to determine how factors relating to economic, social and environmental development foster advances in technology and innovation. The multicriteria decision-making method Technique for Order Preference by Similarity to an Ideal Solution (TOPSIS) is applied to establish a ranking of EU members according to their level of digitalization and innovation, while the Prais-Winsten regression with Panel Corrected Standard Errors is used to obtain robust estimators. The results of the ranking indicate that the countries hold similar positions in the five years analysed, with Sweden leading the way throughout, which reflects its stable development in terms of digitalization and innovation. A digital and innovation gap can be seen between the top and bottom positions of the ranking, that is, between north-central and south-eastern Europe. Finally, the estimated models suggest that governments should promote wealth, employment, research and infrastructure investments in order to improve innovative and technological development in their countries.

Suggested Citation

  • Marti, Luisa & Puertas, Rosa, 2023. "Analysis of European competitiveness based on its innovative capacity and digitalization level," Technology in Society, Elsevier, vol. 72(C).
    • Handle: RePEc:eee:teinso:v:72:y:2023:i:c:s0160791x23000118
    DOI: 10.1016/j.techsoc.2023.102206
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0160791X23000118
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.techsoc.2023.102206?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Magazzino, Cosimo & Mele, Marco & Morelli, Giovanna & Schneider, Nicolas, 2021. "The nexus between information technology and environmental pollution: Application of a new machine learning algorithm to OECD countries," Utilities Policy, Elsevier, vol. 72(C).
    2. Denicolai, Stefano & Zucchella, Antonella & Magnani, Giovanna, 2021. "Internationalization, digitalization, and sustainability: Are SMEs ready? A survey on synergies and substituting effects among growth paths," Technological Forecasting and Social Change, Elsevier, vol. 166(C).
    3. Szabolcs Nagy & Mariann Veresne Somosi, 2022. "The relationship between social innovation and digital economy and society," Papers 2212.13840, arXiv.org.
    4. Mostaghel, Rana & Oghazi, Pejvak & Parida, Vinit & Sohrabpour, Vahid, 2022. "Digitalization driven retail business model innovation: Evaluation of past and avenues for future research trends," Journal of Business Research, Elsevier, vol. 146(C), pages 134-145.
    5. Leogrande, Angelo & Laureti, Lucio & Costantiello, Alberto, 2022. "The Innovation Index in Europe," MPRA Paper 112841, University Library of Munich, Germany.
    6. Teichgraeber, Andreas & Van Reenen, John, 2022. "A policy toolkit to increase research and innovation in the European Union," LSE Research Online Documents on Economics 117801, London School of Economics and Political Science, LSE Library.
    7. Mariacristina Piva & Marco Vivarelli, 2018. "Technological change and employment: is Europe ready for the challenge?," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 8(1), pages 13-32, March.
    8. Beck, Nathaniel & Katz, Jonathan N., 1995. "What To Do (and Not to Do) with Time-Series Cross-Section Data," American Political Science Review, Cambridge University Press, vol. 89(3), pages 634-647, September.
    9. Vladislav Spitsin & Darko Vukovic & Sergey Anokhin & Lubov Spitsina, 2020. "Company performance and optimal capital structure: evidence of transition economy (Russia)," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 48(2), pages 313-332, May.
    10. Paredes-Frigolett, Harold & Pyka, Andreas & Leoneti, Alexandre Bevilacqua, 2021. "On the performance and strategy of innovation systems: A multicriteria group decision analysis approach," Technology in Society, Elsevier, vol. 67(C).
    11. Magazzino, Cosimo & Alola, Andrew Adewale & Schneider, Nicolas, 2021. "The trilemma of innovation, logistics performance, and environmental quality in 25 topmost logistics countries: a quantile regression evidence," LSE Research Online Documents on Economics 117654, London School of Economics and Political Science, LSE Library.
    12. Jonas Soluk, 2022. "Organisations’ Resources and External Shocks: Exploring Digital Innovation in Family Firms," Industry and Innovation, Taylor & Francis Journals, vol. 29(6), pages 792-824, July.
    13. Ghazy, Noha & Ghoneim, Hebatallah & Lang, Guenter, 2022. "Entrepreneurship, productivity and digitalization: Evidence from the EU," Technology in Society, Elsevier, vol. 70(C).
    14. Fakhimi, MohammadAmin & Miremadi, Iman, 2022. "The impact of technological and social capabilities on innovation performance: a technological catch-up perspective," Technology in Society, Elsevier, vol. 68(C).
    15. Huarng, Kun-Huang & Yu, Tiffany Hui-Kuang, 2022. "Analysis of Global Innovation Index by structural qualitative association," Technological Forecasting and Social Change, Elsevier, vol. 182(C).
    16. Chen, Yang & Li, Weiwei & Yi, Pingtao, 2020. "Evaluation of city innovation capability using the TOPSIS-based order relation method: The case of Liaoning province, China," Technology in Society, Elsevier, vol. 63(C).
    17. Milica Jovanoviæ & Jasmina Dlaèiæ & Milan Okanoviæ, 2018. "Digitalization and society’s sustainable development – Measures and implications," Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, University of Rijeka, Faculty of Economics and Business, vol. 36(2), pages 905-928.
    18. Meindl, Benjamin & Ayala, Néstor Fabián & Mendonça, Joana & Frank, Alejandro G., 2021. "The four smarts of Industry 4.0: Evolution of ten years of research and future perspectives," Technological Forecasting and Social Change, Elsevier, vol. 168(C).
    19. Aytekin, Ahmet & Ecer, Fatih & Korucuk, Selçuk & Karamaşa, Çağlar, 2022. "Global innovation efficiency assessment of EU member and candidate countries via DEA-EATWIOS multi-criteria methodology," Technology in Society, Elsevier, vol. 68(C).
    20. Moreno-Llamas, Antonio & García-Mayor, Jesús & De la Cruz-Sánchez, Ernesto, 2020. "The impact of digital technology development on sitting time across Europe," Technology in Society, Elsevier, vol. 63(C).
    21. De Noni, Ivan & Orsi, Luigi & Belussi, Fiorenza, 2018. "The role of collaborative networks in supporting the innovation performances of lagging-behind European regions," Research Policy, Elsevier, vol. 47(1), pages 1-13.
    22. Yadegaridehkordi, Elaheh & Nilashi, Mehrbakhsh & Nizam Bin Md Nasir, Mohd Hairul & Momtazi, Saeedeh & Samad, Sarminah & Supriyanto, Eko & Ghabban, Fahad, 2021. "Customers segmentation in eco-friendly hotels using multi-criteria and machine learning techniques," Technology in Society, Elsevier, vol. 65(C).
    23. Sotirios Zygiaris, 2022. "The Impact of Innovation Systems on E-commerce Capacity," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 13(1), pages 276-289, March.
    24. Ponomareva, E., 2021. "Digitalization as a driver of economic growth: Does only infrastructure matters?," Journal of the New Economic Association, New Economic Association, vol. 51(3), pages 51-68.
    25. Stoica Eduard Alexandru & Bogoslov Ioana Andreea, 2017. "A Comprehensive Analysis Regarding DESI Country Progress for Romania Relative to the European Average Trend," Balkan Region Conference on Engineering and Business Education, Sciendo, vol. 3(1), pages 258-266, December.
    26. Afriyadi Cahyadi & Róbert Magda, 2021. "Digital Leadership in the Economies of the G20 Countries: A Secondary Research," Economies, MDPI, vol. 9(1), pages 1-15, March.
    27. Matthess, Marcel & Kunkel, Stefanie, 2020. "Structural change and digitalization in developing countries: Conceptually linking the two transformations," Technology in Society, Elsevier, vol. 63(C).
    28. Gianluca Elia & Alessandro Margherita & Claudio Petti, 2016. "An Operational Model to Develop Technology Entrepreneurship “EGO-System”," International Journal of Innovation and Technology Management (IJITM), World Scientific Publishing Co. Pte. Ltd., vol. 13(05), pages 1-23, October.
    29. Leogrande, Angelo, 2022. "The Employment Impact of Innovation in Europe," MPRA Paper 112517, University Library of Munich, Germany.
    30. Sharma, Abhijit & Sousa, Cristina & Woodward, Richard, 2022. "Determinants of innovation outcomes: The role of institutional quality," Technovation, Elsevier, vol. 118(C).
    31. Ha, Le Thanh, 2022. "Effects of digitalization on financialization: Empirical evidence from European countries," Technology in Society, Elsevier, vol. 68(C).
    32. Jeffrey M. Wooldridge, 2003. "Cluster-Sample Methods in Applied Econometrics," American Economic Review, American Economic Association, vol. 93(2), pages 133-138, May.
    33. Leogrande, Angelo & Magaletti, Nicola & Cosoli, Gabriele & Massaro, Alessandro, 2022. "Fixed Broadband Take-Up in Europe," MPRA Paper 112246, University Library of Munich, Germany.
    34. Zhu, Chen & Qiu, Zhiyi & Liu, Fengjun, 2021. "Does innovation stimulate employment? Evidence from China," Economic Modelling, Elsevier, vol. 94(C), pages 1007-1017.
    35. Habibi, Fateh & Zabardast, Mohamad Amjad, 2020. "Digitalization, education and economic growth: A comparative analysis of Middle East and OECD countries," Technology in Society, Elsevier, vol. 63(C).
    36. Rahman, Mohammad Mafizur & Alam, Khosrul, 2022. "Effects of corruption, technological innovation, globalisation, and renewable energy on carbon emissions in Asian countries," Utilities Policy, Elsevier, vol. 79(C).
    37. Jarosław Brodny & Magdalena Tutak, 2021. "Assessing the level of digitalization and robotization in the enterprises of the European Union Member States," PLOS ONE, Public Library of Science, vol. 16(7), pages 1-36, July.
    38. İhsan Pençe & Adnan Kalkan & Melike Şişeci Çeşmeli, 2019. "Estimation of the Country Ranking Scores on the Global Innovation Index 2016 Using the Artificial Neural Network Method," International Journal of Innovation and Technology Management (IJITM), World Scientific Publishing Co. Pte. Ltd., vol. 16(04), pages 1-16, June.
    39. Luisa Marti & Rosa Puertas, 2021. "European countries’ vulnerability to COVID-19: multicriteria decision-making techniques," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 34(1), pages 3309-3320, January.
    40. Anca Maria Paraschiv & Narcisa Alexandra Panie & Tamara Maria Nae & Laura Ciobanu, 2022. "EU Countries’ Performance in Digitalization," Springer Proceedings in Business and Economics, in: Mihail Busu (ed.), Digital Economy and New Value Creation, pages 11-24, Springer.
    41. Stavytskyy Andriy & Kharlamova Ganna & Stoica Eduard Alexandru, 2019. "The Analysis of the Digital Economy and Society Index in the EU," TalTech Journal of European Studies, Sciendo, vol. 9(3), pages 245-261, September.
    42. Edmundas Kazimieras Zavadskas & Abbas Mardani & Zenonas Turskis & Ahmad Jusoh & Khalil MD Nor, 2016. "Development of TOPSIS Method to Solve Complicated Decision-Making Problems — An Overview on Developments from 2000 to 2015," International Journal of Information Technology & Decision Making (IJITDM), World Scientific Publishing Co. Pte. Ltd., vol. 15(03), pages 645-682, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Fernando Almeida, 2024. "Causes of Failure of Open Innovation Practices in Small- and Medium-Sized Enterprises," Administrative Sciences, MDPI, vol. 14(3), pages 1-17, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Soluk, Jonas & Decker-Lange, Carolin & Hack, Andreas, 2023. "Small steps for the big hit: A dynamic capabilities perspective on business networks and non-disruptive digital technologies in SMEs," Technological Forecasting and Social Change, Elsevier, vol. 191(C).
    2. Hung, Ngo Thai, 2023. "Green investment, financial development, digitalization and economic sustainability in Vietnam: Evidence from a quantile-on-quantile regression and wavelet coherence," Technological Forecasting and Social Change, Elsevier, vol. 186(PB).
    3. Diána Esses & Mária Szalmáné Csete & Bálint Németh, 2021. "Sustainability and Digital Transformation in the Visegrad Group of Central European Countries," Sustainability, MDPI, vol. 13(11), pages 1-14, May.
    4. Gao, Kang & Yuan, Yijun, 2022. "Government intervention, spillover effect and urban innovation performance: Empirical evidence from national innovative city pilot policy in China," Technology in Society, Elsevier, vol. 70(C).
    5. V.V. Spitsin & A. Mikhalchuk & Darko B. Vukovic & L.Y. Spitsina, 2023. "Technical Efficiency of High-Technology Industries in the Crisis: Evidence from Russia," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 14(1), pages 200-225, March.
    6. Sabina Silajdzic & Eldin Mehic, 2016. "Absorptive Capabilities, FDI, and Economic Growth in Transition Economies," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 52(4), pages 904-922, April.
    7. Tünde Zita Kovács & Beáta Bittner & László Huzsvai & András Nábrádi, 2022. "Convergence and the Matthew Effect in the European Union Based on the DESI Index," Mathematics, MDPI, vol. 10(4), pages 1-23, February.
    8. Aurelija Burinskienė & Milena Seržantė, 2022. "Digitalisation as the Indicator of the Evidence of Sustainability in the European Union," Sustainability, MDPI, vol. 14(14), pages 1-20, July.
    9. Ha, Le Thanh, 2023. "The role of financial development in enhancing trades in environmental goods: International insights from 119 countries," Journal of Commodity Markets, Elsevier, vol. 29(C).
    10. Andrieș, Alin Marius & Fischer, Andreas M. & Yeșin, Pınar, 2017. "The asymmetric effect of international swap lines on banks in emerging markets," Journal of Banking & Finance, Elsevier, vol. 75(C), pages 215-234.
    11. Awad, Atif & Albaity, Mohamed, 2022. "ICT and economic growth in Sub-Saharan Africa: Transmission channels and effects," Telecommunications Policy, Elsevier, vol. 46(8).
    12. Darko B. Vukovic & Lubov Spitsina & Ekaterina Gribanova & Vladislav Spitsin & Ivan Lyzin, 2023. "Predicting the Performance of Retail Market Firms: Regression and Machine Learning Methods," Mathematics, MDPI, vol. 11(8), pages 1-23, April.
    13. Yu, Tiffany Hui-Kuang & Huarng, Kun-Huang, 2023. "Configural analysis of GII’s internal structure," Journal of Business Research, Elsevier, vol. 154(C).
    14. To Trung Thanh & Le Thanh Ha & Hoang Phuong Dung & Tran Thi Lan Huong, 2023. "Impacts of digitalization on energy security: evidence from European countries," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(10), pages 11599-11644, October.
    15. Andrieș, Alin Marius & Fischer, Andreas M. & Yeșin, Pınar, 2017. "Reprint of: The asymmetric effect of international swap lines on banks in emerging markets," Journal of Banking & Finance, Elsevier, vol. 83(C), pages 153-172.
    16. Senna, Pedro P. & Bonnin Roca, Jaime & Barros, Ana C., 2023. "Overcoming barriers to manufacturing digitalization: Policies across EU countries," Technological Forecasting and Social Change, Elsevier, vol. 196(C).
    17. Hong Nham, Nguyen Thi & Ha, Le Thanh, 2022. "Making the circular economy digital or the digital economy circular? Empirical evidence from the European region," Technology in Society, Elsevier, vol. 70(C).
    18. Ali, Mumtaz & Prasad, Ramendra & Xiang, Yong & Deo, Ravinesh C., 2020. "Near real-time significant wave height forecasting with hybridized multiple linear regression algorithms," Renewable and Sustainable Energy Reviews, Elsevier, vol. 132(C).
    19. Meghamrita Chakraborty, 2023. "Linking Migration, Diversity and Regional Development in India," Journal of Development Policy and Practice, , vol. 8(1), pages 55-72, January.
    20. Sergio Destefanis & Matteo Fragetta & Giuseppe Mastromatteo & Nazzareno Ruggiero, 2020. "The Beveridge curve in the OECD before and after the great recession," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 10(3), pages 411-436, September.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:teinso:v:72:y:2023:i:c:s0160791x23000118. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: https://www.journals.elsevier.com/technology-in-society .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.