Technological progress in central and eastern Europe: Digitalization and business innovation leaders and outsiders

Abstract

Innovation and the associated digitization of the global economy are becoming the foundation of competitiveness and development. This state of affairs affects all regions and countries of the world, especially enterprises, which need to adapt to stay in the market. The situation is particularly challenging in developing countries, whose economic potential is lower than that of developed economies. Addressing this issue, the article presents the results of a study on the degree of digitization and innovation of enterprises in the countries of Central and Eastern Europe (CEE), which are among the group of developing economies. The research included independent assessments of innovation and digitization in these countries, as well as a combined assessment of both processes. It was based on a set of 17 selected indicators characterizing the processes of digitization (9) and innovation (8). The CRITIC method was used to calculate the weights of these indicators, and the TOPSIS method was used to determine the digitization and innovation indices, as well as the final digitization and innovation index. Using the results of this analysis, relationships were determined between the digitization and innovation indices, as well as between the final index (innovation and digitization) and selected economic parameters of the countries under study (CEE). The results show that companies in the studied countries are highly differentiated in terms of their digitization and innovation. The best results in both dimensions were obtained by the Czech Republic and Slovenia, while the weakest were by Latvia and Romania. In terms of business innovation, the Czech Republic and Slovenia are the best performers, while Latvia and Romania are the weakest. On the other hand, Slovenia and the Czech Republic are the leaders in business digitization, while Romania and Bulgaria are the worst performers. The remaining countries fell within the area of average development in these dimensions. The obtained results should be a valuable source of knowledge for assessing the measures taken to date in CEE countries in the field of innovation and digitization. It would also be advisable to use them in the development and implementation of economic policy and the targeting of investment activities in the EU. A major opportunity, especially for improving the innovativeness of CEE countries, could be the Open Innovation concept. Its wider implementation in these countries should improve their performance in this regard.