Impact of digitalisation and R and D on the economies of EU member states

Digitalisation is becoming increasingly important in today’s world, as digital technologies are rapidly changing the way we live and work. The COVID-19 outbreak has heavily influenced the way many businesses operate across all sectors linked to both changes in consumer behaviour, social-distancing restrictions and also the availability of resources and services (inc. public services). In many cases the processes digitalised during the pandemic are retained in a digital form also in the post-pandemic recovery thus increasing the overall level of digitalisation and contributing to the transition to Industry 4.0. That refers to additive manufacturing, artificial intelligence, big data and analytics, blockchain, cloud computing, industrial internet of things, and simulation to achieve increased efficiency, improved accuracy, reduced costs, enhanced communication and collaboration, and greater access to information and resources. These have become priorities for enhancing Europe’s long-term competitiveness and will most probably be intensified in the coming years. Meanwhile, it is necessary to take into account the disparities across European Union (EU) member states in the current level of digitalisation and in the prospects of their development. This study aims to assess the digitalisation process of EU member states, its link with the research and development and innovation via factor analysis and regression. The results of the factor analysis determined the component factors and their relations; and the obtained regression model revealed the digitalization factors that can affect economic growth and contribute to GDP per capita thus being the determinants of economic growth in EU member states.