Digital Economy and Society: Baltic States in the EU Context

Abstract

Research purpose. The high penetration of the Internet and increased level of use of digital devices create conditions for the development of the digital economy and society. Understanding and management of this model are essential whilst seeking to compete in the global market and to ensure a high standard of living for citizens. However, despite the opportunities presented by the digital economy, the Baltic States have not yet fully exploited the potential of digital technologies for sustainable development. The purpose of this research is to assess the progress of the Baltic States towards developing a digital economy and society and to identify areas requiring priority investments and action. Design/Methodology/Approach . The Digital Economy and Society Index (DESI) published by the European Commission is used to explore the potential of the digital economy. It is an index measuring progress in digital performance through five components: connectivity, human capital, use of internet, integration of digital technology and digital public services. DESI is a crucial tool to reflect the performance of the Baltic States in the context of other European countries. Findings . The survey shows the individual performance of each Baltic country and compares them amongst themselves as well as with other EU countries. Estonia has the highest DESI when compared with other Baltic countries; however, lower scores in connectivity and integration of digital technology components are observed. Lithuania scores high in the integration of digital technology, whereas the human capital component remains lower. Latvia is a leader amongst connectivity but descents to other Baltic countries in human capital and integration of digital technology components. Originality/Value/Practical implications . The digital economy remains a widely discussed topic; however, a lack of unanimous scientific definition and detailed research on this economic model complicates understanding of digital technologies. It is essential for each government to analyse the model and focus on the improvement of the digital economy in order to ensure that the country remains digitally competitive in the world.