Cost-Effectiveness of Digitalisation in Europe

The article aims to assess the aggregate impact of digitalisation on economic growth in the EU-27 countries and to identify potential threats that can be avoided to maximise economic welfare in the future. The article substantiates the inclusion of an additional factor (DESI index) in the classical Cobb-Douglas production function, which was used to assess the economic payback of digitalisation in Europe. A correlation analysis of the selected factor attributes is carried out to determine the relationship between them. An economic and mathematical model of the impact of these factors on the dynamics of change is built, and the cumulative value of GDP is calculated. It is proved that GDP will grow due to an increase in the employed labour force and digitalisation of the economy. It was found that among all the sub-indices used to calculate the DESI, the introduction of digital technologies has the lowest indicator but has the most significant impact on GDP changes in the EU countries. It is underscored that the main threats to digitalisation are the size of the labour force in general and, in particular, the labour force with digital skills, as well as the low intensity of digitalisation, highlighting the urgency of addressing these issues.