Digitalisation and Productivity Improvement

Abstract

Purpose: The primary purpose is to discuss the productivity and digitalisation interaction at the theoretical level, analyse the productivity and digitalisation differences between the European Union (EU)-14 and EU-13 countries, and evaluate the digitalisation impact on the manufacturing sector labour productivity of the EU countries.

Need for study: The average added value created per capita in new EU countries (EU-13) is one-third lower than in old EU countries (EU-14). To increase productivity, manufacturing companies must adapt to modern trends and take advantage of industrial digitisation opportunities. Digitisation can improve production efficiency, reduce costs, and improve product quality, allowing continuous monitoring and analysis of production data, enabling informed decisions and faster problem-solving.

Methodology: Analysis of scientific literature, comparing viewpoints, insights, and conclusions. The empirical study includes calculating rates of change of indicators, differences between EU-14 and EU-13, and structural analysis. The impact of digitisation on the productivity of EU countries is studied by creating a correlation matrix and using regression analysis: ordinary least square models.

Findings: EU-13 countries are behind EU-14 in labour productivity and manufacturing digitalisation. Digitalisation positively impacts productivity per employee. A faster increase in digitisation, industrial robot use, and e-commerce sales could significantly increase productivity in EU-13, reducing productivity differences between countries.

Practical implications: This study highlights the need for policy promoting digitisation innovation, particularly in EU-13 countries, to be implemented by both national and EU-based economic development and regional and cohesion institutions.

Citation

Davidaviciene, V. and Maciulyte-Sniukiene, A. (2024), "Digitalisation and Productivity Improvement", Grima, S., Romānova, I., Noja, G.G. and Dorożyński, T. (Ed.) Economic Development and Resilience by EU Member States (Contemporary Studies in Economic and Financial Analysis, Vol. 115), Emerald Publishing Limited, Leeds, pp. 201-230. https://doi.org/10.1108/S1569-375920240000115012