Indicators of Socio-Economic Development of European Union Member States

Purpose: The aim of the conducted research is to assess the level of competitiveness of the EU member states. The Human Development Index (HDI) was adopted as a measure of competitiveness, which determines the competitiveness of EU countries based on the average of three indicators covering fundamental areas of life, namely: health (measured by life expectancy), education (literacy rate, reading comprehension rate, and school enrollment rate), and income per capita (GDP per capita). Design/Methodology/Approach: The Human Development Index (HDI) enables more accurate international comparisons of countries’ social development. HDI is a measure used to prepare annual rankings of countries according to their overall level of development—both social and economic. The first step involved conducting a review of the academic literature. Then, secondary data were collected from various data sources. To assess the competitiveness of EU member states in terms of social development, the coefficient of determination—R²—was used. This coefficient measures how well the regression function fits the empirical data. It indicates the proportion of the variance in the dependent variable Y (GDP per capita) that is explained by the explanatory variable X (HDI coefficient). Findings: A comparative analysis of the HDI ranking for the years 2010 and 2020 showed that the top positions in the global classification of countries based on HDI values were occupied by: Norway, Switzerland, Ireland, Germany, Hong Kong, Australia, Iceland, Sweden, Singapore, the Netherlands, Denmark, Finland, Canada, New Zealand, the United Kingdom, and the USA—with Norway, Switzerland, and Iceland consistently at the top. Among EU countries, those with the highest HDI are also those with high economic development measured by GDP per capita. Practical implications: The article confirms the importance of GDP as a key indicator of success in the development of competitiveness among EU countries. The analysis of social and economic effects is a fundamental criterion for determining a country's international competitiveness. In this context, the HDI, which serves to measure the development of individual countries, offers a synthetic approach to this evaluation. Originality: The article presents the benefits of using the HDI indicator, as comparing its value between countries allows us to determine the development gap between the poorest and richest nations (developing and developed) in terms of their level of social development.