PROFILES OF EUROPEAN UNION COUNTRIES IN THE FIELD OF DIGITAL AND KNOWLEDGE-BASED ECONOMIES

Abstract

This article aims to create country profiles for European Union Member States, based on indicators that capture digital access and usage, business digitalisation and e-commerce, as well as human capital and innovation capacity. The empirical results reveal significant differences between countries in the adoption of e-commerce. Northern and Western European countries have a high proportion of enterprise turnover generated through e-commerce and a high proportion of firms that receive online orders. In contrast, several Southern and Eastern European economies have markedly lower levels. The distribution of human resources in science and technology is marked by significant disparities, with pronounced concentrations observed in knowledge-intensive economies such as Luxembourg, Sweden, Ireland, and the Netherlands, and persistently lower shares evident in several Eastern and Southern European countries. These disparities are closely aligned with differences in innovation capacity, as reflected by research and development expenditure. The analysis confirms a pronounced North–West versus South–East divide in R&D intensity, with only a limited group of countries consistently exceeding the 3% of GDP benchmark. Despite the fact that domestic internet access is almost universal throughout the EU, the intensity of digital usage by individuals varies considerably, thereby highlighting a persistent digital usage gap. This finding indicates that access alone is inadequate to ensure effective participation in the digital economy. The conducted cluster analysis identifies three distinct digital and knowledge economy profiles, ranging from highly digitalised and innovation-driven economies to countries with weaker digital engagement and limited innovation capacity. The findings emphasise that digital transformation in the EU is influenced not only by infrastructure availability but also by human capital, innovation systems, and the effective use of digital technologies. The findings of this study carry significant ramifications for the digital and cohesion policies of the European Union, underscoring the necessity for targeted strategies that address inherent disparities and foster inclusive digital and knowledge-based growth.