The Impact of Digitalization on the Economic Performance of SMEs in the European Union: A 2022 Analysis

Abstract

Abstract This study embarks on an empirical examination of the relationship between digitalization intensity and economic performance among Small and Medium-sized Enterprises (SMEs) within the European Union (EU) in 2022. Utilizing data from European Commission, the research specifically compares the “SMEs with at least a basic level of digital intensity” and the “Proportion of total SME value added for all industries”. The aim is to unravel the potential correlation between digital integration in SMEs and their contribution to the economy, measured in terms of value added. The methodology encompasses a quantitative approach, involving the collection of relevant data across EU member states. The study first applies descriptive statistics to summarize the data and then conducts a correlation analysis. In preparing the data for analysis, we adjusted the value-added figures by the number of SMEs to derive a value-added per SME metric, facilitating a more accurate and comparable evaluation across countries with varying numbers of SMEs.Our preliminary analysis reveals significant variations in digital intensity among SMEs across different EU countries. The core of the analysis investigates whether higher levels of digital adoption correlate with an increased economic output per SME. This study is particularly relevant in the context of the EU’s digital single market strategy and the increasing emphasis on digital transformation in the business sector. The findings of this study are expected to contribute to the understanding of the digital economy’s impact on SMEs, providing valuable insights for policymakers and business leaders.