MEASURING ECONOMIC EFFICIENCY OF DIGITAL TRANSFORMATION ACROSS EU COUNTRIES USING DEA TECHNIQUES

Abstract

Digitalization has become a critical focus for both companies and public organizations, with numerous reports highlighting its growing importance. This study evaluates the comparative efficiency of digital transformation across European Union countries using Data Envelopment Analysis (DEA). Data are sourced from the Digital Transformation Account 2018 published by the European Commission. DEA is employed to measure the relative efficiency of countries in leveraging digital transformation enablers to achieve desired outcomes. The analysis uses the “enablers and outputs” framework from the Digital Transformation Scoreboard, considering Digital Infrastructure, Investment and Access to Finance, Digital Skills Demand and Supply, E-Leadership, and Entrepreneurial Culture as inputs, and ICT startups and overall Digital Transformation performance as outputs. The study provides a ranking of EU countries based on their digital transformation efficiency. Findings reveal that Denmark, Italy, and the United Kingdom exhibit relatively high levels of digital transformation efficiency, whereas countries such as the Netherlands and Germany perform below the efficiency frontier. These outcomes offer practical insights for policymakers and organizations seeking to strengthen digital adoption capabilities and enhance competitive advantage across Europe.