Wires, Patents and Growth: An Explainable Machine Learning Approach for What Drives Digital Competitiveness in the European Union

This study investigates the predictive contribution of digital infrastructure to GDP per capita growth across 27 European Union Member States over the period 1995–2024, using a balanced panel of 810 country–year observations and an explainable machine learning framework. An XGBoost model trained on six World Bank indicators—fixed broadband subscriptions, internet users, mobile subscriptions, patent applications, R&D expenditure, and secure internet servers—achieves a training R2 of 0.804 and a test R2 of 0.430 under temporal out-of-sample validation spanning the COVID-19 structural break. TreeSHAP decomposition identifies fixed broadband as the strongest predictor of model-estimated GDP per capita growth (mean |SHAP| = 0.948; bootstrap rank 1 in 78% of 50 resamples; Friedman Chi-square (5) = 168.16, p < 0.001), providing predictive support for Hypothesis H1. Innovation indicators, represented by patent applications and R&D expenditure, exceed the pre-specified materiality threshold, providing predictive support for H2, while SHAP dependence plots reveal pronounced non-linear threshold patterns consistent with S-curve diffusion theory, supporting H3. Temporal SHAP decomposition identifies three structural phases: broadband dominance (1995–2007), crisis-induced reconfiguration (2008–2013), and quality convergence (2014–2024). The framework reconciles contradictory findings from prior literature by visualizing the complete functional form of the broadband–growth relationship without imposing a parametric specification.