The Link between Digitization and the Sustainable Development in European Union Countries

Abstract

Digitalization and sustainable development represent two highly topical subjects, each of them being primarily debated in the literature. Although it is evident that digitalization brings new opportunities and challenges for the management of organizations and for meeting their sustainable strategies, there are relatively few studies analyzing the relationship between the two. Therefore, the objective of the present study is to analyze the relationship between digitalization and sustainable development in the European Union (EU) countries, between 2019 and 2021, before and during the COVID-19 pandemic. On this matter, the link between Digital Economy and Society Index (DESI), on one side, and Sustainable Development Goal Index (SDG Index) and Spillover Index (SS Index), on the other side, has been analyzed using correlations. While DESI refers to the monitoring of digital advancement of the EU member states, SDG Index and SS Index are based on many indicators and give a multidimensional perspective regarding sustainable development. Results show a positive and significant relationship between DESI and SDG Index, and the effect gradually decreases during the analyzed period. Regarding the relationship between DESI and SS Index, the correlation was negative, but significant in 2020 and 2019 only. At the level of each geographical region, the relationship between DESI and SDG Index was positive, with a larger effect in the Northern and Western region and the Southern region compared to the Central and Eastern region, but this effect was not statistically significant. In addition, the relationship between DESI and SS Index was negative and significant at the level of the Central and Eastern region and the Southern region but positive and not statistically significant at the level of the Northern and Western region. In addition to previous papers on this field, this study adds the analysis between digitalization and the Spillover Index. In addition, while previous studies seek to identify the relationship between digitalization and sustainability at a single country level or region, this study presents the correlation analysis at the EU level and compares the results for each EU region. Following the results, our study gives arguments for reshaping the concept of sustainable development given that digitalization is becoming an essential business component.