Digital transformation and ICT sector performance in EU countries

Abstract

Digital transformation is now one of the most important topics in all EU countries in creating and managing strategies and visions for states, businesses, organizations, and citizens. The ICT sector is currently one of the most important sectors with significant added value. The main purpose of the paper is to identify the efficiency of the digitalization of the economy and society concerning the performance of the ICT sector. This paper uses multi-criteria efficiency evaluation methods – Data Envelopment Analysis (DEA models). Inputs in the basic DEA model are the dimensions’ values of the Digital Economy and Society Index (DESI), which are also used to express the DESI summary indicator, such as human capital, connectivity, digital technology integration, and digital public services. Output in the DEA model indicates the ICT share of GDP. Finally, output-oriented DEA models are used to express the efficiency score. The analysis results show that Bulgaria, Romania, Greece, and Malta have a below-average level of DESI, but they can be classified as efficient. Italy, Lithuania, and Slovenia are the worst performers in the efficiency score. The next step was to express the efficiency scores in the DEA models in terms of different combinations of inputs and outputs. Malta was efficient in all fifteen DEA models. Based on these findings, Malta is considered significantly positive. Its approaches can serve as an example for other countries.