DIGITAL TECHNOLOGIES AS A TOOL FOR INCREASING THE BUSINESS COMPETITIVENESS

Digital technologies provide businesses with numerous benefits, but their positive effect of enhancing competitiveness is most strongly manifested in interaction with other influencing factors, in particular, innovations. The aim of the study is to assess the joint impact of digitalization and innovation on the business competitiveness taking into account macroeconomic and corporate factors. The study employed the methods of regression, variance, and correlation analysis. The analysis found that digitalization has a statistically significant impact on the competitiveness of countries through the indicators Digital Skills Among Active Population and Individuals Using the Internet. The relative impact of these indicators on the competitiveness of countries is 0.6833 and 0.3024, respectively. Innovation plays a mediating role in the impact of digitalization on competitiveness through the Institutions indicator. This gives grounds to conclude that enhancing the competitiveness of the country and the business sector requires not only technological development. It also requires improving the quality of the institutional environment to fully realize the potential of digital technologies. Analysis of the impact of companies’ research and development (R&D) spending on revenue revealed a positive correlation between these indicators. With an increase in R&D spending by 1 unit, expected revenue increases by 0.5571 units. Accordingly, an increase in R&D spending has the potential to increase the efficiency of business activities, which ultimately leads to increased revenue through innovation and process optimization. The findings can be useful for entrepreneurs for improving business strategies by focusing on the identified determinants of the impact of digitalization on competitiveness. Determining the role of innovation in this process is also important for innovation policymakers to optimize the environment for enhancing competitiveness through the effective use of digitalization and innovation.