THE ROLE OF DIGITAL SKILLS AND DIGITALISATION IN ENHANCING LABOUR PRODUCTIVITY IN THE EU

Digitalisation and digital skills are often considered key factors shaping labour productivity and international competitiveness. The paper aims to examine the potential relationship between the level of digital skills and labour productivity. It explores the interdependence between the level of digital skills and labour productivity while considering the possible effects of business digitalisation. Using the Granger causality tests and panel data regression, we get several novel results. The results indicate a bidirectional causal relationship between productivity and digital skills, albeit with a two-year lag for e-commerce. Panel fixed-effects regressions and Generalised methods of moments (GMM) have been further used to get more detailed and robust results. Panel regression analysis confirms the positive effect of general digital skills on labour productivity, while this effect was not found in the case of advanced digital skills and R&D expenditure. This research brought new knowledge regarding the economic impact of using digital technology. Our findings highlight the importance of general digital skills in the population. The relationship between digital transformation and labour productivity depends on the type of skills and ability of employees to adapt to new technologies. From the perspective of increasing the country’s international competitiveness, programs to improve digital skills across the population and different socio-economic groups are the key issue.