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This paper examines the relationship between digitalization and sustainable development and presents the composite index used for measuring the digital competitiveness of nations – the Digital Economy and Society Index (DESI). Today’s environment is highly dependent on technological capabilities. Tracking contemporary technological development is becoming crucial at both micro and macro level. One of the major revolutions in modern business is switching from traditional to digital business models for achieving higher competitiveness level. Digitalization is one of the primary impetus of today’s development. To accept and implement these changes, it is important to highlight the macromarketing role in this process. It is necessary to have concrete measures for identifying the shortcomings, good practices, and track the development. For this purpose, European Commission developed DESI to measure digital performance of European Union countries. This paper examines the DESI methodology and observes how the digital performance of EU affects main sustainable development components: economic, social, and environmental. Thus, the paper explores the correlations of DESI and other composite indices that measure sustainability components. Besides, the research examined the relationships between Hofstede’s cultural dimensions and digital performance. The paper highlights the importance of digitalization as another crucial component of society’s sustainable development.
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Milica Jovanović et al. • Digitalization and society’s sustainable development...
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Preliminary communication
UDC: 502.131.1:004
https://doi.org/10.18045/zbefri.2018.2.905
Digitalization and society’s sustainable
development – Measures and implications*1
Milica Jovanović2, Jasmina Dlačić3, Milan Okanović4
Abstract
This paper examines the relationship between digitalization and sustainable
development and presents the composite index used for measuring the digital
competitiveness of nations – the Digital Economy and Society Index (DESI). Todays
environment is highly dependent on technological capabilities. Tracking
contemporary technological development is becoming crucial at both micro and
macro level. One of the major revolutions in modern business is switching from
traditional to digital business models for achieving higher competitiveness level.
Digitalization is one of the primary impetus of today’s development. To accept and
implement these changes, it is important to highlight the macromarketing role in this
process. It is necessary to have concrete measures for identifying the shortcomings,
good practices, and track the development. For this purpose, European Commission
developed DESI to measure digital performance of European Union countries. This
paper examines the DESI methodology and observes how the digital performance of
EU aects main sustainable development components: economic, social, and
environmental. Thus, the paper explores the correlations of DESI and other
composite indices that measure sustainability components. Besides, the research
examined the relationships between Hofstede’s cultural dimensions and digital
* Received: 02-05-2018; accepted: 13-12-2018
1 This paper has been supported by the University of Rijeka for project ZP UNIRI 9/17 and
the Ministry of Education, Science, and Technological Development of the Republic of Serbia
project number TR-32013.
2 Teaching assistant, MSc, University of Belgrade, Faculty of organizational sciences, Jove Ilica
154, 11000 Belgrade, Serbia. Scientic aliation: management of technology, innovation and
development, operations research. Phone: +381113950879. E-mail: milica.jovanovic@fon.
bg.ac.rs.
3 Assistant professor, PhD, University of Rijeka, Faculty of economics and business, Ivana
Filipovica 4, 51000 Rijeka, Croatia. Scientic aliation: marketing. Phone: +38551355111.
E-mail: jasmina.dlacic@efri.hr.
4 Assistant professor, PhD, University of Belgrade, Faculty of organizational sciences, Jove Ilica
154, 11000 Belgrade, Serbia. Scientic aliation: marketing. Phone: +381113950848. E-mail:
milan.okanovic@fon.bg.ac.rs.
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performance. The paper highlights the importance of digitalization as another
crucial component of society’s sustainable development.
Key words: digitalization, sustainable development, performance indicators, society,
macromarketing
JEL classication: Q01, E71, M38
1. Introduction
Throughout history, the main radical changes that occurred through industrial
revolutions shaped today’s society. Four eras of technology deeply changed
everything that surrounds us and aects everyday life (Schwab, 2016). Medicine,
education, transport, manufacturing, banking, business, sports, food industry, etc.,
everything changed under the inuence of these signicant changes. In this world
of fast changes, man forgot about his natural habitat, his environment. Technology
is continually developing, but sometimes the costs are great. Thus, it is signicant
to measure the impact that technological changes have on sustainable development,
the synergistic development of economy, society, and environment. Recently, there
is an emergence of various measures of national performance. Numerous indices are
used with the aim to measure dierent aspects of a nation’s economic development:
competitiveness, innovativeness, entrepreneurial activity, etc. (Jovanović et al.,
2017). However, there are indices oriented towards measuring dierent national
phenomena, such as goodness of a country, which inspects contribution of a nation
to the humanity; or overall sustainability that evaluates contribution to sustainable
development goals. In these recent trends, another index emerged because of rapid
digital development: The Digital Economy and Society Index (DESI).
In this paper, we examined the digitalization impact on the main sustainability
components: economy, society, and environment. The test hypothesis of the
research is that digitalization aects sustainable development. To conrm the
hypothesis, we proposed two research questions listed in the second section. We
analysed the correlation of DESI with selected methodologies that measure dierent
aspects of sustainability dimensions. We also observed the relationship between
cultural characteristics of a nation and country’s digitalization level by exploring
correlations of Hofstede’s cultural dimensions and DESI.
Next section explains main concepts examined in this paper: digitalization,
sustainable development, macromarketing, relationship between sustainable
development and digitalization, with focus on DESI. Section three presents the
methods used for the research. The fourth and fth sections give empirical data and
results of the research, as well as the discussion. Finally, we complete the paper
with the conclusions of the research as well as point out limitations and propose
further research ideas.
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2. Literature review
Today’s environment is highly dependent on technological capabilities and keeping
track with contemporary development is becoming crucial at both micro and
macro level. Today’s societal characteristics are highly inuenced by the industrial
revolutions occurred in the last three centuries. Revolutions have occurred throughout
history when new technologies and novel ways of perceiving the world caused a
profound change in economic systems and social structures (Schwab, 2016). From the
rst industrial revolution and steam machine in the 1760s, technology has developed
exponentially by constantly upgrading itself and behaving as a sort of recursion
where new technologies were created by the old ones. The second revolution in the
late 19th and early 20th century was induced by the development of electricity and it
enabled mass production. Afterwards, the 60s of the 20th century brought computers
that shaped the third industrial revolution or, so-called, digital revolution. This era
introduced personal computers and the internet. Finally, based on the previous digital
revolution, the current, fourth industrial revolution is led by articial intelligence,
machine learning and Internet of things (Schwab, 2016). Schumpeter explained this
phenomenon through his waves of innovation (Figure 1). He claims that each wave
of innovation does not last equally, and that their length is shortened due to the rapid
development of new technologies (The Economist, 1999; Levi Jakšić et al., 2018a).
Currently, we are living in the 5th wave of innovation, where digital solutions are
becoming the leading impetus of change.
Figure 1: Schumpeter’s long waves of innovation
Water energy
Textile
Iron
Steam
Steel
Railway
Electric energy
Chemicals
IC engines
Petrochemical
Electronics
Aviation
Digital networks
Software
New media
1785 1845 1900 1950 1990
Economic
activity
1st w ave
60 years
2nd wave
55 years
3rd wave
50 years
4th w ave
40 years
5th w ave
30 years
2020
Source: Levi Jakšić et al. (2018a)
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One of the major revolutions in modern business is switching from traditional to
digital business models for achieving higher competitiveness level. In this, fth
wave of innovation, we can distinguish three eras of digital transformation (I-scoop,
2016):
1. Digitization: where the analog items are converted into digital versions (i.e.
electronic version of paper documents);
2. Digitalization: where digital technologies are used to change business models,
create revenue, improve business and value-producing opportunities; and
3. Digital transformation: where digital technologies are used to change all
business aspects.
Currently, we live in the third era of digital transformation, and new challenges are
put in front of governments, companies, entrepreneurs, and customers/consumers
(Schwab, 2016). Schmarzo (2017) stresses out that this era of digital transformation
represents “application of digital capabilities to processes, products, and assets”
with the aim to “improve eciency, enhance customer value, manage risk, and
uncover new monetization opportunities.” Similarly, Bertini (2016) points out that
digital transformation aects not just lives, but also individual’s experiences.
Dang and Pheng (2015: 13) explored new theories of economic development and
well noted, “on the way to achieve rapid economic growth, countries around the
world have been exploiting their natural resource reserves at alarming rates”. Both
science and society have noticed this occurrence, and consequently, sustainable
development has been increasingly highlighted as a priority for nations and
enterprises (Levi Jakšić et al., 2018b). Brundtland Commission (1987: 41) states
that: Sustainable development (SD) is development that meets the needs of the
present without compromising the ability of future generations to meet their own
needs.”. This concept suggests that the well-being of humanity can be achieved
only by the synergistic eect of three basic pillars: economic growth, social
equity, and environmental protection. Additionally, due to the complexity of
today’s society, culture has been identied as the fourth dimension of sustainable
development (Commonwealth Secretariat, 2007; Hawkes, 2001). Organization
Culture 21 states that “culture ultimately shapes what we mean by development and
determines how people act in the world“ (Culture 21, 2014). This component of SD
is important because it determines how the changes will be accepted in the society.
Thus, it could be a crucial factor in the adoption of the digital transformation.
Some authors criticize the SD denition given by the Brundtland Commission and
even consider ve determinants of sustainable development (Seghezzo, 2009):
Place: with three dimensions of space; Permanence: the dimension of time; and
Persons: human dimension. However, this concept is too abstract to be applied,
and not suciently explored and scientically conrmed. Recent researches
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also examine the inuence of culture on accepting digitalization. Benner (2017)
analysed the impact of the cultural acceptance of digitalization on the GDP in East
and West Germany. The research was based on measuring the data from Google
Trend, where the term “Facebook” occurred as a search term. The results showed
that positive cultural acceptance of digitalization increases GDP. However, this
research did not include the remaining SD dimensions. On the other hand, Hegyes
et al. (2017) examined the problem of digitalization and sustainable development
by comparing Hungary with other EU countries. The research was based on the
European Commission reports and empirical research in secondary education.
Again, the results did not give the whole picture of the digitalization impact
on sustainable development components, but they put the focus on Hungarian
performance in comparison to EU.
Relationship of the national cultural dimensions and technology innovativeness has
already drawn the attention of the researches. Zhao (2011) has empirically examined
whether national culture has an impact on e-government development in 84 countries
around the world. He has found that only individualism, power distance and long-
term orientation are signicantly correlated with e-government development. Khalil
(2011) also explored the relationship between values of national culture and practice
to e-Government readiness. He has found that, except for the performance orientation
and assertiveness, values of national culture and practices correlated negatively and
positively with e-Government readiness. Al-Hujran et al. (2011) have developed
an integrated model by extending the technology acceptance model (TAM) with
Hofstede’s national culture dimensions, which is used to evaluate the impact of
national culture on eGovernment adoption. Favourable cultural factors across nations
like religion, ethnicity, political freedom do help nation to support technological
progress (Coccia, 2014). Some researchers provided synthesis of previous research
related to information technology and national culture (Gallivan and Srite, 2005)
but not pointing out national cultural dimensions. Srite and Karahanna (2006) in
their research compared technology acceptance and cultural values. Their research
indicated that espoused cultural values have dierent inuence on behavioural
intention to use technology depending on cultural values like Masculinity, Power
distance and Uncertainty avoidance. Rinne et al. (2012) explored the link between
Hofstede’s measures of cultural values and innovation measured by the Global
Innovation Index (GII). Their analyses show a strong negative relationship between
Hofstede’s dimensions of Power distance and GII innovation scores as well as
a strong positive relationship between Individualism and GII innovation scores.
Considering other studies that investigate a relationship between culture and
environmental sustainability, Cox et al. (2011) found that economic development is
also related to cultural values. They found that Power distance was negatively related
to weighted gross domestic product per capita (GDPC), whereas Individualism
was positively related to weighted GDPC. GDPC in their study was balanced with
environmental sustainability.
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In these kinds of societal changes, managers should take care of companies’ impact
on society. Taking a systems perspective of marketing it is evident that everything is
networked: people, companies, society, and as such they must respond to customer
demand (Layton and Grossbart 2006). If we observe macromarketing from a
perspective of activities within society than marketing is helping to optimize overall
social benets form entire marketing process (Bartels and Jenkins, 1977), and
marketing processes are functioning as a result and determinant of economic and
social environment. Consequently, marketing from a macromarketing perspective is a
facilitating agent that helps to organize activities in society to improve conditions for
individuals in a specic society (Layton, 2009). Macromarketing is more oriented on
social aspects of marketing and institutions (Bartels and Jenkins, 1977). This concept
tries to explain the functioning of complex marketing mechanisms of economic
and social environments. As such, it is an important determinant of sustainable
development. Kilbourne et al. (1997) claim that only macromarketing can eectively
examine the relationship between sustainable consumption and quality of life. They
recognize four dimensions: technology, economics, ethics, and politics as crucial for
determining sustainable consumption. By fostering macromarketing activities and
mechanisms (information, individual actions, participation of business, measuring
indicators, political support of government) it is possible to transform society from the
state of hyperconsumption to the desired state of sustainable consumption (Kilbourne
et al., 1997). Macromarketing activities encourage a behavioral change of society by
raising awarenes and they are also responsible for accepting the radical technological
changes (i.e. digital transformation) (Shultz, 2007; Nills and Shultz, 1997). Also,
Mittelstaedt et al. (2014) argue that macromarketing approach is researching, among
others, globalization, the environment and quality of life, and due to that is the most
suitable for analysing and advancing sustainability.
Shultz and Peterson (2017) noticed the socioeconomic transition in Vietnam to
a market-oriented economy, and thus examined the macromarketing aspect of
their performance. They examined the Sustainable Society Index values with
macromarketing activities and concluded that it is crucial to foster macromarketing
activities in order to achieve a sustainable society. Further, one of the possibilities
for exploring this impact of macromarketing on society is to analyse global indices
(Simkins and Peterson, 2015). For example, the Sustainable Society Index can
oer important issues related to marketing and sustainable business practices.
Moreover, secondary data that also include various indexes are a lucrative pool
for approaching and researching sustainability issues through macromarketing. In
the process of adopting changes, macromarketing can be used as an approach that
takes into consideration dierent cultural aspects of the society where the change
is being implemented. Layton (2007) points out that culture and its elements are
an integral part of macromarketing approach to marketing systems. Therefore,
cultural context is important in dening and exploring marketing environment. It
interacts with other elements in the environment like economic development, level
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of technology and the physical environment to ensure sustainable development of
a society. In the era of digital transformation of society, the technological change
and the growth of knowledge are a driver of economic growth and wealth (Layton,
2009). Consequently, in this process of the digital transformation of the society, it is
important to consider dierent cultural dimensions. Dierent dimensions of culture
and cultural change operate together through marketing systems to change society
(Layton, 2009) and to inuence sustainable development of the society. Therefore,
there is interconnectedness between society, culture and macromarketing approach.
Having in mind the emergence of the digital transformation process, importance
of sustainable development issue, and the intermediary role of macromarekting, to
answer the main hypothesis of the research we proposed two research questions:
Whether and to what extent digital transformation aects sustainable
development and its components?
Whether digital transformation level is aected by the cultural characteristics of
a society?
Thus, in this paper, we compare the measures of digitalization performance with
measures of sustainable development (as a concept, as well as its components). In
the research, we observed cultural dimensions as an important component of both
sustainable development and macromarketing. We based our conclusions on a set
of 28 EU countries. For the measure of digitalization, we observed the Digital
Economy and Society Index and compared the results with other measures related
to the sustainable development components.
To measure the level of achieved digitalization in a country, European Commission
developed The Digital Economy and Society Index (DESI), a composite
measure that summarises indicators related to the digital performance and digital
competitiveness of the EU member states. The index is compounded of a set of
indicators related to the digital policy mix and has a three-layer structure (European
Commission, 2017). At the rst level, there are ve principal dimensions:
Connectivity, Digital skills, Use of Internet, Integration of Digital Technology,
and Digital Public Services. Second level has 12 sub-dimensions, and the third
level has 31 individual indicators. Complete structure of DESI with the weighting
system is presented in Figure 2. The ve principal dimensions are dened by the
ve principal policies for digital economy and society. European Commission
(2017) claims that the digital development of the economy and society can only
be achieved by interconnected development of these areas (European Commission,
2017). As technological changes occur, this index is also changing the methodology,
so in 2016, they included some new indicators in the calculation (i.e. 4G coverage).
Regarding weighting system used for the computation of nal DESI score, not all
the dimensions have the same share: Connectivity and Human Capital are having
the largest impact with 25% each, then Integration of Digital Technology with 20%,
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while Use of Internet and Digital Public Services have the lowest impact of 15%.
Within dimensions, the sub-dimensions also have dierent weighting system shown
in Figure 2 (European Commission, 2017).
Figure 2: Digital Economy and Society Index structure
Source: Authors, based on European Commission (2017)
Analysing the structure and methodology used for computation of the DESI, we
can conclude that the indicators are carefully examined, selected and appropriate
for the phenomenon they measure. Also, as one of the biggest shortcomings of
numerous global index methodologies is equal weighting system (Jovanović et al.,
2017; Šegota et al., 2017), we can say that this is not the case with DESI, since the
dierent signicance of certain digitalization aspects has been considered. Finally,
all indicators at the lowest level of the hierarchy are quantitative, so they provide
objective measures of performance regarding the achieved level of digitalization.
To objectively examine the relationship between the digitalization process
and sustainable development, we measured the correlation between the DESI
and selected set of indicators that measure certain (or all) aspects of sustainable
development. We compared the DESI results with the following global indices:
Global Competitiveness Index
Global Innovation Index
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Gross Domestic Products
Global Entrepreneurship Index
The Good Country Index
Sustainable Development Goal Index
Sustainable Society Index
There is still no widely accepted index that measures overall sustainability, but some
of them deal with one or more SD dimensions (Savić et al., 2016). In this research,
we use indices explicitly dened for this purpose, but since their methodologies are
still developing (Sustainable Development Goal Index started being measured in
2015), or not measured each year (as Sustainable Society Index), we used measures
that relate to some SD dimensions and are widely accepted.
To examine macromarketing role in the process of digitalization, we included
measures of Hofstede’s cultural dimensions in the research. Also, culture is identied
as the fourth dimension of SD, but not included in any ocial methodology for
measuring sustainability level. Thus, this was another reason to include a cultural
aspect in the research.
Having in mind that not all examined indices measure each SD aspect, we classied
them based on the set of indicators they are compounded of (Table 1). After the
explanation of each methodology, we noted the dimension they are related to.
3. Methodology
Further, we will briey explain the subject matter of each index. Global
Competitiveness Index (GCI) is measured by the World Economic Forum and
assesses the global competitiveness of 137 countries. It also gives an insight
into the catalysts of the economy that are crucial for the further development
and prosperity (WEF, 2017). The indicators of this methodology are oriented on
economy (i.e. quality of roads, pay and productivity, company spending on R&D,
etc.) and society development (i.e. Secondary education enrolment rate, Internet
users, quality of education, etc.).
Global Innovation Index (GII) measures innovation performance of 127 world
economies. Cornell University, INSEAD Business School, and World Intellectual
Property Oce annually publish The Global Innovation Report and provide data
related to the innovative activity of countries through the set of 81 indicators
(Cornell University et al., 2017). As in GCI, the components of this index are
related to economy and society. The only single indicator used in the research for
the comparison with the digitalization level is Gross Domestic Product (GDP),
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as one of the main indicators of a country’s economic performance (Syrquin,
2011). We also examined the scores of the Global Entrepreneurship Index
(GEI) published by the Global Entrepreneurship and Development Institute.
This index measures the health of 137 entrepreneurial ecosystems by measuring
entrepreneurial attitudes, abilities, and aspirations (GEDI, 2017). Although
entrepreneurial activities are not an explicit part of the sustainable development,
they relate to the social activities within the economic system, so it is also
connected to the economy and society dimensions of SD (Levi Jakšić et al.,
2015).
Another global index examined in the research oers a slightly dierent
perspective the Good Country Index (GoCI). Unlike other measures that are
oriented mostly towards economic and social performance, this index measures
the contribution of a country to “the common good of humanity” (Good Country,
2016). The Good Country organization collects the data from the ocial
institutions and evaluates the “goodness” of a country through its contribution
to seven dimensions: Science and Technology, Culture, International Peace and
Security, World Order, Planet and Climate, Prosperity and Equality, and Health
and Wellbeing. Unlike previous indices, this relates to all three sustainability
aspects: economy, environment and society. The listed indices are not primarily
oriented towards measuring sustainability but are focused on one or more
dimensions. Thus, we included methodologies developed solely to measure the
sustainable development: Sustainable Development Goals Index and Sustainable
Society Index. Sustainable Development Goals Index (SDGI) is the result of a
worldwide study that evaluates how much each country contributes to achieving
the Sustainable Development Goals. The Sustainable Development Solutions
Network and the Bertelsmann Stiftung annually publish these reports with
guidelines to leaders how can identify priorities and track progress in achieving
the goals (Bertelsmann Stiftung and SDSN, 2017). Sustainable Society Index
(SSI) is another measure of sustainability level that the Sustainable Society
Foundation publishes every two years. The SSI calculates the performance at
three levels: 21 indicators, 7 categories, and 3 basic SD dimensions (Economic,
Environmental, and Human Wellbeing) (SSF, 2016a). However, this index does
not provide the aggregate measure of sustainability, but three dierent scores for
each dimension. Thus, we compared the DESI result with each of the three SSI
components.
None of the listed indices includes the cultural perspective of a nation, although
it is identied as an important component of adopting technological changes
or component that moderates technology adoption, usage, and infusion (Srite,
1999). Kovačić (2005) in his work asserts that cultural values relate to technology
readiness. Others explored relationship between dierent national cultural
dimensions on technology acceptance or technology readiness (Sun, Lee and
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Law, 2018; Khalil, 2011; Yoon, 2009; Parasuraman, Edvardsson and Gustafsson,
2004). Thus, we included Hofstede’s cultural dimensions scores for the selected
set of countries. Hofstede’s cultural dimensions approach is one of the most
widely used tools that measure cultural characteristics of a nation (Hofstede,
1984; Masleand and Hoorn, 2009). We explored correlations with each of the six
dened dimensions. Each country achieves a certain score on a scale from 0 to
100.
Power Distance dimension describes the level of orientation towards hierarchy.
Countries that have high scores on this dimension accept unequal distribution of
power since low scores mean that power is equally distributed among society.
Individualism vs. Collectivism describes the strength of the community in the
society. A high score on this dimension means that people are not willing to take
other people’s responsibility, unlike those with low scores that are loyal to the
group they belong to and stand for their interest.
Masculinity vs. Femininity describes the roles of men and women in society.
Highly masculine societies defer the roles depending on the gender, and money
and achievement are important determinants of success, while the feminine
societies more orients towards the quality of life, and it is considered that men
and women roles are overlapping. Uncertainty Avoidance measures the level to
which people are willing to deal with the anxiety and are capable of accepting the
risk. A high score on this dimension denes that society prefers the situation that
they can control and situations that can predict, while the lower score signies the
relaxed and open communities.
Long-term orientation describes the degree to which people are oriented on past
and tradition. Nations with low scores are more religious, nationalists, and are not
easy to accept societal changes and thus are marked as short-term oriented, while
high scores describe the nations that are more persistent, pragmatic, thrifty and
respect education. Indulgence vs. Restraint measures a society’s characteristics
regarding enjoying life. Nations with low scores are restraint, pessimistic and
are regulated by strict social norms, while high score describes societies that are
more optimistic and focused on personal happiness (Hofstede, 2011).
4. Empirical data and analysis
To compare the results and derive conclusions, we collected data from 2014 to 2017
(since the European Commission started measuring DESI in 2014) for EU countries
(the scope of DESI). The SDGI values are available only for 2016 and 2017, while
the SSI is measured every two years and thus the results are provided only for 2014
and 2016.
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Table 1: SD dimensions and data source for the selected indices
Measure SD component Data source
GCI Economy, Society WEF (2014) WEF (2015) WEF (2016) WEF (2017)
GII Economy, Society
Cornell University et al.(2014)
Cornell University et al. (2015)
Cornell University et al. (2016)
Cornell University et al. (2017)
GDP Economy Eurostat (2018)
GEI Economy, Society GEDI (2014) GEDI (2015) GEDI (2016) GEDI (2017)
GoCI Economy, Society, Environment Good Country (2017)
SciTech Economy
Culture Society
Intern.Peace & Security Society
World Order Society
Planet & Climate Environment
Prosperity and Equality Economy, Society
Health and Wellbeing Economy, Society
SDGI Economy, Society, Environment Kroll (2015) Sachs et al. (2016) Sachs et al. (2017)
SSI Economy, Society, Environment SSF (2016b)
HCD Culture Hofstede Insights (2018)
Source: Authors
All data were collected from the ocial reports, websites, and databases, and
the sources are given in Table 1. Also, the table lists the dimensions of sustainable
development that is addressed by the selected indices. To calculate the correlation,
we used StatSoft’s software Statistica (StatSoft, 2018). We measured the Spearman’s
correlation coecient for comparing the Good Country Index and DESI since the
data from the GoCI methodology is ordinal (ranks). For the rest of the data, we
calculated Pearson’s correlation coecient. Although correlation coecients do not
imply causal relationship, they show the linkage between the observed variables and
the strength of the link. The results are discussed in the next section.
Correlations from Table 2 show that most of the measures signicantly correlate
with the DESI values (numbers agged). GCI, GII, and GEI have a strong positive
correlation with DESI for each year (from 0.7667 to 0.8856) which means that
highly digitalized countries are more likely to be more competitive, innovative, and
entrepreneurially oriented on the global market. The similar situation is with the
GDP level, which shows high positive correlation from 0.6125 to 0.6623 with DESI
index. This can be labelled as expected because higher digitalization level can be
related to the higher standard level of the countries. However, it is not as high as the
previous measures, which proves that the economic standard is not the only aspect
that is related to the more digitalized societies.
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Table 2: The correlation results
Measure SD component DESI
2014 2015 2016 2017
GCI Economy, Society 0.8047*0.8655*0.8546*0.7667*
GII Economy, Society 0.8071*0.8745*0.8682*0.8564*
GDP Economy 0.6687*0.6827*0.6614*0.6883*
GEI Economy, Society 0.8797*0.8712*0.8856*0.8521*
The GoCI Economy, Society,
Environment 0.6125*0.6623*0.6519*0.6377*
SciTech Economy 0.3175 0.3290 0.3372 0.2874
Culture Society 0.7767*0.8095*0.8161*0.8084*
Intern. Peace & Security Society 0.2759 0.3131 0.3098 0.2868
World Order Society 0.5249*0.5397*0.5008*0.5101*
Planet & Climate Environment 0.1527 0.1587 0.1637 0.1544
Prosperity and Equality Economy, Society 0.5435*0.5955*0.6015*0.5709*
Health and Wellbeing Economy, Society 0.7225*0.7564*0.7493*0.7504*
SDGI Economy, Society,
Environment N/A N/A 0.8302*0.6771*
SSI Economy, Society,
Environment N/A N/A N/A N/A
Human Wellbeing Society 0.5488*N/A 0.6132*N/A
Environmental Wellbeing Environment -0.5642*N/A -0.5890*N/A
Economic Wellbeing Economy 0.3156 N/A 0.3199 N/A
Hofstede’s dimensions
Power distance Culture -0.7201*-0.7079*-0.6992*-0.5613*
Individualism Culture 0.5593*0.5607*0.5528*0.5980*
Masculinity Culture -0.3814 -0.3610 -0.3870 -0.3465
Uncertainty Avoidance Culture -0.6427*-0.6598*-0.6470*-0.5791*
Long term orientation Culture -0.0681 -0.0772 -0.0920 0.0295
Indulgence Culture 0.6932*0.7092*0.7246*0.6844*
*signicant at p< 0.05; N/A – the data was not available for the observed years
Source: Authors
The Good Country Index also has a strong positive correlation with DESI (from
0.6125 to 0.6623). These results indicate that countries with higher level of
digitalization tend to contribute more to humanity. This tendency can also be
considered as a certain aspect of sustainability if we assume that these kinds of
contribution and responsible behaviour are leading towards higher sustainability. To
have results on correlations between the observed indices and DESI more visually
comparable we created Figure 3.
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Figure 3: Statistically signicant correlations of the observed indexes and DESI
Source: Authors
If we focus on the sustainability indices, SDGI also strongly correlates with the
DESI with correlations of 0.8302 and 0.6771.
From a cultural perspective (Figure 4), the results show that Power distance
dimension has a high negative correlation with DESI. Also, it has been identied
that more risk-oriented countries (have lower Uncertainty Avoidance scores) have
medium to a strong negative correlation score (-0.5791 to -0.6470).
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Figure 4: Statistically signicant correlations of Hofstede’s components and DESI
Source: Authors
Furthermore, Individualism has a medium positive correlation with digitalization
(0.5528 to 0.5980). Long term orientation does not detect any relationship with the
digitalization level. In the end, Indulgence has strong positive correlation with the
level of digitalization (0.6844 to 0.7246).
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5. Results and discussion
If we examine the components of GoCI and the results given in Table 2, Science
and Technology development have low positive relationship with DESI, which at
rst do not seem logic, but this value in the GoCI methodology is computed based
on the number of international students, journal exports, international publications,
Nobel prizes, and patents, and is not closely linked to the ICT development.
Cultural component, however, has a strong positive relationship with digitalization
level, as well as Health and Wellbeing. World order, and Prosperity and Equality
have a medium positive correlation with the level of digitalization. These results
again emphasize that social components of the countries are inuenced positively
with the process of digitalization. On the other hand, for International Peace and
Security does not identify the statistically signicant relationship, although it is
positive. Also, for Planet & Climate component, the only component related to
environmental dimension, there is a weak positive correlation, which means that
does not have a statistically signicant relationship with digitalization level.
Table 2 and Figure 3 point out that sustainability index SDGI strongly correlates
with DESI. This implicates that, according to this measure, more digitalized
societies tend to perform better in achieving sustainability goals. To have
another perspective, we can investigate the SSI correlation results, since this
index diversies three components related to the sustainability dimensions and
do not provide a single (composite) measure of sustainability. Human Wellbeing
component (related to the social dimension) has a positive relationship with the
digitalization, meaning that digitalized societies have more satised basic needs and
better education. In comparison to Environmental Wellbeing, DESI has a negative
relationship. This is an important implication since it signies that societies with
higher digitalization level are scoring low regarding climate, energy use, renewable
energy, consumption etc.
The research also examined cultural component according to Hofstede’s dimensions
of culture (Figure 4 and Table 2) and shows several trends. Namely, Power distance
dimension has a high negative correlation with DESI. Also, it has been identied
that more risk-oriented countries (have lower Uncertainty Avoidance scores) tend
to be more digitalized. In addition, results show that collectivistic societies have
a lower level of digitalization than the individualistic (Individualism component).
Surprisingly, Long term orientation does not detect any relationship with the
digitalization level. This signies that there are no dierences found in accepting
the digitalization between the traditional and future-oriented societies. In the end,
Indulgence has a strong positive correlation with the level of digitalization. This
result indicates that the level of digitalization is higher in the societies that tend
to enjoy life and have fun in comparison to the restraint countries that resist the
fullment of desires. Hofstede’s cultural dimensions are used in this research, but, it
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would be interesting, related to macromarketing eorts, to explore dierent cultural
tools that Fons Trompenaars and Shalom Schwartz developed (Trompenaars and
Hampden Turner, 2000; Schwartz, 2006).
Although we have derived important implications, this research has certain
limitations. Firstly, the set of countries is narrowed to 28 EU countries because
of the scope of DESI. This is important because cultural dierences may be even
stronger, and conclusions may signicantly dier when the rest of the world
countries are included (especially Asian and African). However, this cannot
be changed if some new ocial measures occur or the European Commission
methodology changes the scope of DESI. Regarding methodologies for
measuring sustainable development, SDGI is still young methodology, and SSI
is not measured annually and does not provide a unique score on sustainability.
Furthermore, observing countries based on the current level of development would
help researchers to distinguish between knowledge and information society. This
approach would be interesting to be applied in further research. In this research, we
used Hofstede’s model of cultural dimensions to explore values and relationship
that society has on DESI. However, other methodologies can be applied to explore
relationship with macromarketing eorts, especially related to digitalization and
sustainability. As current research focuses only on exploring wheatear and how
digital transformation aects sustainable development, it would be interesting to
explore to what extent these elements inuence sustainable development. We
suppose that there will be dierences among dierent cultures and especially in
cultural dimensions as current research indicated. Also, there is a possibility to
structure the model of implications for policymakers with specic macromarketing
tools that should be applied for easier implementation of technological changes into
a society based on the cultural dimensions.
6. Conclusions
Technological changes are rapid. They signicantly shape our society. Since
the length of the waves is shortening, it demands quick and agile reaction on
the market. Currently, we are living in the era of digital transformation. Digital
technologies are changing all business aspects, and new challenges are occurring.
In adopting these changes, macromarketing has a special role with its specic
approach. Nonetheless, man must not forget his natural environment in chasing
the economic development. Thus, developing sustainably has been set as a priority
action, and the hypothesis was proposed that that digitalization aects sustainable
development. Consequently, two questions emerge: Whether and to what extent
digital transformation aects sustainable development and its components? and
Whether digital transformation level is aected by the cultural characteristics of
a society? For answering the posted questions, we conducted a research where
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the digitalization measure of EU countries is compared with other established
methodologies that measure one or more sustainability components. The results
show that digitalization signicantly correlates with the sustainable development
components, indicating that we can conrm our posited hypothesis. Higher
digitalization level is in a relationship with economic development through higher
competitiveness, innovativeness, and entrepreneurial activities. Also, GDP is
higher in more digitalized countries. Nevertheless, not just economic development,
but the social aspect is also positively inuenced by the digitalization. However,
environment is neglected with a medium negative impact of the digitalization.
Based on correlations results between dierent Hofstede’s cultural dimensions and
digitalization it is noted that cultural dierences have a large impact on the process
of digitalization. More hierarchy, individualism, risk orientation, and readiness to
enjoy life are leading to higher digitalization. On the other side, traditional societies
have similar digitalization level as the future-oriented ones. This also leads to the
conclusion that macromarketing has an important role in accepting digitalization if
the tools are used and shaped by a nation’s cultural characteristics.
It has been noted during the research that methodologies used for measuring the
level of sustainability are not developed enough and that more focus is put on
the economic and social development. Also, we based our conclusions on DESI,
measured only for the EU countries. We examined the methodology and concluded
that it had been carefully developed, with the appropriate structure and weighting
system. Since the digitalization is an important aspect of today’s development,
DESI should have a wider scope than 28 countries. This would enable future
research with a more representative set of countries for deriving implications,
especially regarding cultural characteristics that are important for shaping the set of
actions for implementation.
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Milica Jovanović et al. • Digitalization and society’s sustainable development...
928 Zb. rad. Ekon. fak. Rij. • 2018 • vol. 36 • no. 2 • 905-928
Digitalizacija i održivi razvoj društva – Mjere i implikacije1
Milica Jovanović2, Jasmina Dlačić3, Milan Okanović4
Sažetak
Rad istražuje vezu između digitalizacije i održivog razvoja društva te analizira
kompozitni indeks koji se primjenjuje za mjerenje digitalne konkurentnosti nacije
– Indeks digitalne ekonomije i društva (Digital Economy and Society Index –
DESI). Današnje okruženje je visoko zavisno o tehnološkim sposobnostima.
Praćenje suvremenog tehnološkog razvoja postaje izrazito važno kako na mikro
tako i na makro nivou. Jedna od glavnih promjena u modernom poslovanju je
prelazak od tradicionalnog načina poslovanja prema digitalnom poslovanju kako
bi se dosegnula viša razina konkurentnosti. Digitalizacija je jedan od glavnih
pokretačkih sila suvremenog razvoja. Kako bi se prihvatile i implementirale
promjene koje se dešavaju u društvu potrebno je naglasiti ulogu makro-
marketinškog sagledavanja cijelog procesa promjena. Važno je imati konkretne
mjere za identiciranje nedostataka, dobrih praksi i praćenja razvoja. S tim ciljem,
Europska komisija razvila je DESI indeks kako bi mjerila i pratila digitalne
performanse država članica Europske unije. Rad istražuje DESI metodologiju i
promatra kako su digitalne performanse EU država povezane s glavnim
komponentama održivog razvoja: ekonomskim, društvenim i okolišnim. Dakle, rad
istražuje korelacije između DESI indeksa i ostalih kompozitnih indeksa koji mjere
komponente održivog razvoja društva. Pored navedenoga, istraživanje obuhvaća i
povezanost Hofsteadovih dimenzija kulture i digitalnih performansi. Rad
naglašava važnost digitalizacije kao ključnog elementa održivog razvoja društva.
Ključne riječi: digitalizacija, održivi razvoj, indikatori performansi, društvo, makro-
marketing
JEL klasikacija: Q01, E71, M38
1 Rad je nastao uz potporu Sveučilišta u Rijeci, projekt ZP UNIRI 9/17 i Ministarstva obrazovanja,
znanosti i tehnološkog razvoja Republike Srbije, projekt TR-32013.
2 Asistentica, mr.sc., Sveučilište u Beogradu, Fakultet organizacijskih znanosti, Jove Ilića 154,
11000 Beograd, Srbija. Znanstveno područje: menadžment tehnologije, inovacija i razvoja,
operacijska istraživanja. Tel.: +381113950879. E-mail: milica.jovanovic@fon.bg.ac.rs.
3 Docentica, dr.sc., Sveučilište u Rijeci, Ekonomski fakultet, Ivana Filipovića 4, 51000 Rijeka,
Hrvatska. Znanstveno područje: marketing. Tel.: +38551355111. E-mail: jasmina.dlacic@efri.hr.
4 Docent, dr.sc., Sveučilište u Beogradu, Fakultet organizacijskih znanosti, Jove Ilića 154, 11000
Beograd, Srbija. Znanstveno područje: marketing. Tel.: +381113950848. E-mail: milan.
okanovic@fon.bg.ac.rs.
... By contrast, (Knudsen et al., 2021) conclude that the effect of digitalization on competitive advantage and sustainability depends on the combination of big data and network impacts in a business model. (Novikova et al., 2022) emphasize the potential of digitalization to drive economic growth, whereas (Jovanović et al., 2018) underscore the importance of digitalization in achieving sustainable development, in accordance with the Digital Economy and Society Index. ...
... First, as a gauge for measuring digital advancement, the digital economy and society index (DESI) is utilized. This index comprises four key dimensions, namely, "connectivity", "human capital", "digital technology integration", and "digital public services" (Jovanović et al., 2018). It thoroughly represents a nation's socioeconomic digital evolution, focusing on both preparedness and progress. ...
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... Esses et al. (2021) have also examined the relationship between digitalisation and sustainable development in the V4 countries, concluding that a strong relationship exists between sustainability and digitalisation. Jovanovic et al. (2018) investigated the correlation between the DESI and other indices measuring sustainable development and highlighted that digitalisation plays an important role in society's sustainable development. Esses-Szalmáné Csete (2022) examined the relationship between the digital transformation and sustainable transition in the EU capitals and concluded that digitalisation and sustainable development are significantly and positively correlated. ...
... The two composite indices are positively and significantly correlated to each other (Pearson coefficient: 0.577, p = 0.002) for the EU countries, mostly in line with earlier findings presented in the literature review on the global scale (Jovanovic et al. 2018). ...
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... Digital platforms also support entrepreneurship, particularly in emerging markets where formal financial services might not be easily available. Jovanović et al. (2018) noted that the more digitized nations exhibit more viable, and advanced entrepreneurship actions. Consequently, DI would create sustainable entrepreneurship and business ecosystems. ...
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... Based on the findings of their study, highly digitalized countries also have higher GDP. Nonetheless, the economic development, as well as the social aspect, can have a positive impact on digital transformation (Jovanović et al., 2018). Therefore, digital transformation in creative industries can lead to the attainment of sustainable development. ...
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