An empirical study on measurement of efficiency of digital transformation by using data envelopment analysis

Abstract

Nowadays digitalization is an important topic for businesses and government agencies. There are important reports publishing about digitalization or digital transformation. This study aims to measure the relative efficiency of digital transformation among EU Countries based on data envelopment analysis (DEA). The necessary data are extracted from Digital Transformation Scoreboard 2018 published by European Commission. DEA is one of popular methods for measuring the relative efficiency of similar units. This study empirically proposes an alternative ranking for countries with respect to digital transformation efficiency by using “enablers and output” approach of Digital Transformation Scoreboard. Digital Infrastructure, Investment and Access to Finance, Supply and Demand of Digital Skills, E-Leadership and Entrepreneurial Culture are considered as input while ICT start-ups and Digital Transformation are considered as the output of DEA model. The results indicate that while some countries like Denmark, Italy and United Kingdom are considered relatively efficient, Netherland and Germany are not very efficient according to our results.