A systemic perspective on socioeconomic transformation in the digital age

Abstract

Digitalization has set the stage for a stream of radical innovations that have the potential to trigger a new technological revolution and cause deep structural changes throughout the economy, affecting not only the technology base, but also the facilitating structure (including production, infrastructure and markets), public policy, and the environment. Focusing on these building blocks, we combine network analysis and composite indicators into a novel framework to investigate a country’s socioeconomic system both across its components and over time. Its empirical application to a set of Western and Asian countries over 10 years gives insights into their socioeconomic performance and development, as well as their capability to absorb technological change. A structural decomposition analysis further allows investigating the evolution of countries’ structural transformation over time and shows the impact of digitalization and Industry 4.0 in this regard.