9 2591-2259/© 2022 University of Ljubljana, Faculty of Public Administration. This is an open access article under the CC-BY-NC-ND license https://creativecommons.org/licenses/by-nc-nd/4.0/ DOI: 10.17573/cepar.2022.2.01 1.01 Original scientific article The Impact of Digitalization on Public Administration, Economic Development, and Well-Being in the EU Countries Armenia Androniceanu Bucharest University of Economic Studies, Faculty of Administration and Public Management, Romania University of Social Sciences, Lodz, Poland armenia.androniceanu@man.ase.ro https://orcid.org/0000-0001-7307-5597 Irina Georgescu Bucharest University of Economic Studies, Faculty of Cybernetics and Economic Informatics, Romania irina.georgescu@csie.ase.ro https://orcid.org/0000-0002-8536-5636 Oana-Matilda Sabie Bucharest University of Economic Studies, Faculty of Administration and Public Management, Romania oana.sabie@amp.ase.ro https://orcid.org/0000-0003-1725-3541 Received: 12. 7. 2022 Revised: 12. 9. 2022 Accepted: 7. 10. 2022 Published: 28. 11. 2022 ABSTRACT Purpose: Digitalization has been the driving change in creating jobs and increasing economic growth in recent years. However, the digitalization of countries and sectors is uneven. The paper focuses on various factors that have an impact on the economic development and well-being in EU countries. Its purpose is to show the evolution of EU countries in terms of digital transformation and how other indicators, such as e-government, human development index, labour productivity, and economic growth in- fluenced the well-being in EU countries in 2019–2021. Design/methodology/approach: The dataset consists of 15 numerical indicators extracted from Eurostat and World Bank databases. We apply principal component analysis and cluster analysis. Androniceanu, A., Georgescu, I., Sabie, O.-M. (2022). The Impact of Digitalization on Public Administration, Economic Development, and Well-Being in the EU Countries. Central European Public Administration Review, 20(2), pp. 9–31 Central European Public Administration Review, Vol. 20, No. 2/202210 Armenia Androniceanu, Irina Georgescu, Oana-Matilda Sabie Findings and Practical Implications: The main research results show that the first dimension – named the impact of innovation on well-being – is dominated by e-government, the percentage of ICT specialists in total, internet use by individuals, the Human Development Index, the Digitali- zation Index, the Happiness Indicator, human capital, and the integration of digital technology. The second dimension is characterized by govern- ment expenses and productivity. Finally, the third dimension is dominat- ed by the GDP growth rate. 77.67% of the total variance is explained by the first three principal components. Originality: Four clusters have been identified by means of the K-Means clustering algorithm. All four clusters are well determined, with cluster 1 including the three Nordic countries ranking first, followed by cluster 3 of well-developed countries and cluster 4 containing mainly emerging economies. Keywords: public administration, digitalization, economic growth, well-being JEL: I12, I18 1 Introduction On 9 March 2021, the Commission set out its vision and prospects for Europe’s digital transformation by 2030. This EU’s “compass for the digital dimension” revolves around four key points: skills, infrastructure, government, and busi- ness. From this perspective, in our paper, we approach the transformations that took place in the three components in the period 2019-2021 in the EU states based on a set of fifteen representative variables (Androniceanu and Georgescu, 2021). The aim of the EU’s digital strategy is for this transforma- tion to benefit citizens and businesses and simultaneously contribute to cre- ating a climate-neutral Europe by 2050. The crisis generated by COVID-19 has created some major problems, which have significantly accelerated the use of digital tools, which have highlight- ed on the one hand the opportunities and facilities that are offered through them, but on the other hand, digital inequalities have also been highlighted (Androniceanu et al., 2022; Ivanová et al.,2021; Androniceanu and Marton, 2021). In our research, they are identified and analyzed on each component. Although interest in digital transformation and implicitly in digital skills in- creased during the COVID-19 pandemic, it is important to be aware that the pandemic did not generate a real transformation, but rather forced a series of emergency solutions, unsustainable and should not be replicated in a post- pandemic society (Kinnunen et al., 2021). However, in our paper, we can iden- tify the impact of the measures taken by the EU states in the analyzed period (European Commission, 2019, 2020, 2021). The digitization of public services involves rethinking the way in which public institutions design and deliver ser- vices to citizens and the business environment, more precisely, the transition from the traditional way of organization and operation towards a customer- centric institutional ecosystem (Mali, 2020). Thus, digital transformation in- Central European Public Administration Review, Vol. 20, No. 2/2022 11 The Impact of Digitalization on Public Administration, Economic Development, and Well-Being in the EU Countries volves the integration of digital technology in all aspects of a field of activity, which fundamentally changes the way it operates and provides distinct added value for stakeholders. Unlike digitalization, which involves adapting to new technologies, digital transformation involves profound changes. Next, the paper is structured into three main sections. The first section con- tains the results of an extensive analysis of the basic concepts in the spe- cialized literature. The following section includes the presentation and ex- planation of the research variables’ content and the research components’ determination and analysis. This is followed by a large section of analysis and discussions about the mutual influences of the factors and variables studied, as they manifested themselves in the analyzed period. The last part of the pa- per contains the main conclusions and future directions for further research. 2 Literature review There is a diversity of works in the literature that address digitization, digitali- zation, and digital transformation, in general, and in different areas of social and economic life. Digitization is the transformation of physical, analog in- formation (such as documents, photos, reports, invoices, contracts, etc.) into a format that can be stored and accessed from a computer, phone, tablet, USB stick, smart watch and other similar devices. Digitalization is the conver- sion of processes from manual to automatic. In practice, digitalization has different forms, but, in essence, it consists of the creation of databases that include several files with various documents, depending on the typology, to which access can be differentiated. Digital transformation is the process by which the content, form, and mode of processing and transmission of data and documents are changing in order to save time and material resources and thus increase efficiency. In the field of administration, these three concepts are practically three stages of an extensive and complex process (Balcerzak et al., 2022). These can generate major and necessary transformations that significantly improve the content and quality of activities and services, as also the governance process, transparency, and accessibility of government insti- tutions (Kafel et al., 2021). The research carried out by us shows the progress registered by the EU states during the pandemic, their degree of digitization, and the impact of digitization on economic and social development. Digitiza- tion, in general, and in the public sector (Lindgren et al., 2019; Špaček, Csótó and Urs, 2020; Nikolina et al., 2020), in particular, as well as digital transfor- mation, are the subject of an impressive number of definitions in the litera- ture (Viana, 2021; Nathan et al., 2019). Public governance in the digital age involves the adoption of three main approaches: reintegration, holism, and digitalization (Bodemann, 2018). Reintegration involves the correlation and unitary integration of public services for citizens and the business environ- ment, the integration of outsourced technologies and services, the use of common services, and the simplification of the process of delivering public services to government clients. The holistic approach involves reorganizing services based on focusing on the needs of citizens and businesses and de- Central European Public Administration Review, Vol. 20, No. 2/202212 Armenia Androniceanu, Irina Georgescu, Oana-Matilda Sabie livering unique “one-stop-shop” services that allow for the simplified integra- tion of services in one place. In public administration practice, the goal of digitalization is to give every citi- zen the same access to services, information, and knowledge (Larsson, 2021; Tangi, 2021; Sidak et al., 2021; Löfving et al., 2022). This access will be pro- vided through digital technologies. The proliferation of digital technology has had a beneficial effect on the efficacy and efficiency, as well as the quality and cost, of operations that are carried out by governments, communities, and individuals. New doors have been opened for sociopolitical participation on the part of citizens thanks to digital technologies (Vasiliades et al., 2021; Certomà, 2022; Sharma et al., 2022). The management of the interactions that take place between the state, regions, and localities, as well as the com- munication that takes place between public administration authorities and citizens, increasingly makes use of these technological advancements. The foundation of good governance is openness, transparency, accountability on the side of the government, and community participation in the process of policy development and execution. Digital technologies guarantee that these procedures are accessible and simple to carry out (Kim et al., 2022). Digitization involves the definition, development, and implementation of digital media and tools with strategic impact, combined with process automa- tion, intelligent use of data and information, as well as new social experiences in the online environment for citizens and public institutions (Strafford and Schindlinger, 2018). Digitization is not a goal and has never been, not even as a sector of activity, geographical sector, or segment of the population. It is a means of achieving certain goals, and certain needs of a segment of the population because digitalization comes as an answer to solving these needs. Digitizing the administration means efficiency and transparency. It means electronic archiving of documents that, once digitized, can be searched and accessed anytime, anywhere. Digitizing the administration also means simpli- fying procedures and efficiency - which shortens the path from a state need to acquisition and leaves much less room for politically appointed people to intervene in the process while making the whole process much easier to verify (Rosenbloom, 2014). Digitizing the administration means efficiency in procurement and ways to set cost standards, evaluate bids, and report theft almost automatically where they occur (Neamtu and Dragos, 2014; Munoz and Bolivar, 2018). Digi- tizing the administration also means holding the political factor accountable to the citizens: once every acquisition and decision is easily accessible and in- telligible to the citizen, the politician can be sanctioned almost instantly by the press, civil society, and especially citizens and the business community (Moller, 2020). Digitization and digital transformation are complex, trans- formative processes with implications in all branches of society from jobs, education, health, and social security to the transformation of public services, the economy, and relations between states. The digital economy is expected to contribute to social and economic equality. At the same time, technology Central European Public Administration Review, Vol. 20, No. 2/2022 13 The Impact of Digitalization on Public Administration, Economic Development, and Well-Being in the EU Countries will help increase access to education, jobs, and finance, even if, in the short term, it could lead to a reduction in repetitive work. The growth of the digital economy has both obvious advantages and disad- vantages, at least in terms of developments so far: on the one hand, it pro- motes economic growth (Arsić, 2020), information transmission, improving efficiency, creating of new public service platforms, facilitating daily life and so on, and on the other hand, it causes information insecurity, information shortages caused by the wealth gap, difficulties in regulating information, in- ternet fraud, infringement of intellectual property rights, intrusion into priva- cy and other new challenges. Digitization has considerable consequences for the labor market and work organization, such as greater income disparities and reduced access to social security systems, which can be negative if not managed properly (Mura et al., 2021). As our research shows, there is a ten- dency to lose jobs in developed EU countries because employees, especially in the industrial sectors, are being replaced by cars. Mainly due to robotization, large groups of workers, including managerial levels, are currently fired. The middle class of society, especially those categories that were dependent in their prosperity on employment, are severely affected, as are the generations older of people whose contact with information technology was made later in active life. At the same time, there is the possibility for emerging countries to create new jobs in the field of communications, in order to promote the necessary investments for a territorial network in the field of optical fibers. Digitization is an opportunity to stimulate the economy, especially in emerg- ing countries. There are already positive experiences, for example in the use of mobile telephony as a commercial trading tool. There are still opportunities for new jobs, such as those related to caring for people, where technological change is not so decisive, at least for the mo- ment. The new trends for the future of work are technology, digitization, robotics, and artificial intelligence. Digitization provides opportunities for surveillance and monitoring of people at work, endangering their autonomy and privacy. However, it is no less true that these systems lead to better use of working time. Therefore, digitalization has a major impact both on pub- lic administration, the economy, and the well-being of citizens in general. Through sets of specific variables for the four dimensions of our research, namely: digitization, administration, economy, and the well-being of Europe- an citizens are identified, analyzed, and compared (Androniceanu A.-M. et al., 2020). Then some of their most important and significant elements of impact in 2019-2021 are presented. Many states have made the process of digitalizing their economies one of their top strategic development priorities in light of the current economic climate. The emergence of technologies that encourage the digitalization of the economy makes it possible for the state, corporations, and society to en- gage productively in order to facilitate the development of a process that is increasingly expansive and fluid (Bessonova and Battalov, 2020; Pucheanu et al., 2022). Innovation, economic development, and competitiveness are in- Central European Public Administration Review, Vol. 20, No. 2/202214 Armenia Androniceanu, Irina Georgescu, Oana-Matilda Sabie creasingly being driven by the digital economy. Businesses expect their com- petitive advantage to increase as their services are provided through virtual channels and integrated into their operations management (Reis et al., 2019). Digitalization also contributes to economic development since the process and the product can both be automated, which leads to an increase in both production and quality in different economic segments (Maiti and Kayal, 2017). Vyshnevskyi (2020) in his study regarding the main problems in EU countries associated with industry’s level of digitalization, showed that the industrial production growth rates of EU member states, which are among the world’s most advanced in terms of digitalization, are significantly lower than those of other countries with a lower level of digital transformation. The following is an example of a theory that could explain why countries with high degrees of digitalization are seeing a comparatively slower rate of expansion in their industrial production (Vyshnevskyi, 2020). A high level of economic development results in a high level of digitalization, but it also sets the stage for a high level of output that falls into the trap of being harder to achieve with each passing percentage due to a substantial base of comparison. The comparison of Romania and the Netherlands is a good example of this. Roma- nia is the 27th (last) (European Commission, 2022) among all EU countries in terms of the average rate of digitization and the 19th (Eurostat, July 2022) in terms of the average growth of industry volume. The Netherlands is the third in terms of digitization (European Commission, 2022) and ranks 21 in terms of the average increase of the industrial volume index (Eurostat, July 2022). Thus, it may be stated that digitalization (digital capital) does not necessarily have a significant impact on the relative (when comparing industrial produc- tion growth rates between countries) at this time (Barabashev et al., 2022). The improvement of people’s overall quality of life is another objective of the digitalization effort. Digitalization changes people’s interactions with the world outside of them as well as their internal environment, including how they view themselves, the world, and what it is like to be human (Kryzhanovs- kij et al., 2021). This is why the evolution of society faces new obstacles as a result of digitalization. In Clark’s opinion (Clark et al., 2018), the pattern of interconnections and conduct are the two primary factors that determine the direction of the influence that social networks have on an individual’s subjec- tive well-being (Gajdoš and Hudec, 2020). The concept of digital transformation has been around since the 1990s, al- though frequently under different names, such as “e-government” (Bellamy and Taylor, 1998); nonetheless, there has been a recent resurgence in the emphasis placed on digital. Many researchers around the world whose pri- mary focus is on the field of public administration are turning their attention to the question of how to implement a digital transformation of public man- agement and administration (Dunleavy and Margetts, 2015; Corydon, Gane- san and Lundqvist, 2016; Urs, 2018). When all systems are fully integrated, digital transformation creates a significant link between the public and the government (Agostino et al., 2021). Since their systems are fully integrated, this implies that information is shared across the many public administration Central European Public Administration Review, Vol. 20, No. 2/2022 15 The Impact of Digitalization on Public Administration, Economic Development, and Well-Being in the EU Countries authorities (Androniceanu et al., 2021). Digital transformation also presents some difficulties (Viana, 2021). Concerns arise over the construction, bounda- ries, and applications of information technology, as well as disparities in users’ levels of access to the digital space. In addition to this, there is a lack of struc- ture, which leads to inefficiencies in the delivery of online services as well as the disconnect between these services. According to Mergel et al. (2019), there are two main factors categories that could influence digital transformation: internal and external factors. Among internal factors, we can find management type and bureaucracy (as in terms of a large number of physical files). The principal categories of external fac- tors that influence digital transformation are legislative, administrative, polit- ical, economic, social, technological, and environmental (Scupola and Mergel, 2022; Szeiner et al., 2022). Merge et al. (2019) study results showed that from the external factors, the ones with the highest percentages that influence digital transformation are: technological change – 34% (technology); busi- nesses sector evolution – 17% (economic); dynamic of citizens needs – 14.9% (social); external pressure from the environment – 12.7% (all the changes in politics, legal, economic, social, technologic and environment). In the last decades, a new narrative has emerged in tandem with the digital transition in technology, such as in artificial intelligence and machine learning (Curtis, 2019) with beneficiaries’ experience, engagement, and co-creation play- ing a vital role in service development and implementation (Casula et al., 2020). The digital transition in technology is associated with the application of digital technology in all areas, such as business, public administration, education, and society. Digital platforms stimulated different organizations and tasks. Digital technology under various aspects such as artificial intelligence and robotiza- tion leads to the improvement of productivity. Both organizations and individ- uals should adapt to this digital transition by developing digital abilities. The paper is addressed to businesses, public administrations, government bodies, and other communities that face the challenges of digital transformation. The main variables used and the way in which the data were analyzed but also the main results of the research can be found in Section 3. We apply Principal Component Analysis for 15 chosen variables and 27 EU member states and we obtain that the first 3 Principal Components (PCs) retain 77.67% of the to- tal variance. PC1 is called the impact of innovation on well-being and adminis- tration. PC2 represents government expenses and productivity. PC3 is called the dimension of GDP growth rate. The next step of the research was to apply the K-Means clustering algorithm to detect 4 well-separated clusters. Cluster 1 with three Nordic countries places first in this ranking, followed by cluster 3 of well-developed countries and cluster 4 of mainly emerging economies. The most digitalized countries are the Nordic countries, having the highest economic growth and relatively low productivity, while the least digitalized countries in cluster 4 such as Romania and Bulgaria had the lowest economic growth, but the highest productivity. Central European Public Administration Review, Vol. 20, No. 2/202216 Armenia Androniceanu, Irina Georgescu, Oana-Matilda Sabie 3 Research variables, results and discussions The research focuses on a number of variables that affect economic growth and well-being in EU member states. The major goal of this study was to demon- strate how the EU states have changed in terms of digital transformation and how other ICT-related variables have affected the growth and prosperity of the chosen nations from 2019 to 2021. The Principal Component Analysis was uti- lized as a method, and the data set for this study was composed of 15 numerical indicators gathered from the World Bank and Eurostat databases. The main re- search variables used are centralized in Table 1. The selection of variables was made according to the three parameters involved in the research, namely dig- itization, economic development, and the standard of living of the population of the EU states. The main components identified facilitate both the discovery of the factors that influence digitalization and the impact that digitalization has on the economic development and well-being of the population. Table 1. The main research variables Variable Label Research Variable Source EXPG Expenses % of GDP World Bank EG E-Government (Individuals using the internet for interaction with public authorities) World Bank ECOM Enterprises with e-commerce Eurostat ICT Employed ICT specialists -% of total Eurostat GDPG GDP growth rate World Bank INTUSE Internet use by individuals Eurostat PROD Real labour productivity per person employed Eurostat HDI Human Development Index World Bank WHI Life Ladder Index https://worldhappiness. report RDE Research and development expenditure, by sector of performance Eurostat HC Human Capital https://digital-strategy. ec.europa.eu CON Connectivity https://digital-strategy. ec.europa.e INT Integration of digital technology https://digital-strategy. ec.europa.eu DIG Digital public services https://digital-strategy. ec.europa.eu DESI The Digital Economy and Society Index https://digital-strategy. ec.europa.eu Source: Authors’s selection based on Eurostat and World Bank databases Central European Public Administration Review, Vol. 20, No. 2/2022 17 The Impact of Digitalization on Public Administration, Economic Development, and Well-Being in the EU Countries The data set composed of 15 numerical indicators/variables collected from Eurostat and World Bank databases for 2019 and 2021 are relevant for our research and are briefly presented below. Expenses % of GDP - The public’s daily life and the media both demonstrate how in time, the GDP, progress, and even well-being eventually become syn- onymous. Indicators of living standards and comparative assessments of wel- fare typically employ the GDP (Frajman Ivković, 2016). Progress has become crucial in today’s society in all areas. Progress can be broadly characterized as a desirable future condition when some beneficial developments are made. Progress has been defined differently over time. In other words, in addition to the objective, hard economic statistics, we also need subjective, soft indica- tors, or so-called alternative metrics, to assess success (e.g., various indicators of human progress, well-being, quality of life, happiness, etc., which consider how the public perceives things). Abdallah et al. (2009) argue that for more than 50 years, the illusion of economic development as a sign of progress pre- dominated. The GDP has been used for many years in economics as a broad indication of development, and it is already widely regarded as a gauge of development, wealth, and even well-being. According to Michaelson et al. (2009), contemporary society is built on a development model in which great- er economic output immediately raises people’s standards of living and en- hances their quality of life. Authors like Frajman Ivković (2016) claim that the previous major financial crisis serves as evidence that tracking and expanding economic output (measured by GDP) over time has shown to be an ineffective way of progress evaluation. E-Government (Individuals using the internet for interaction with public au- thorities). E-government, according to Norris (2010), refers to the external IT applications for a range of tasks and activities, including government to citi- zen, government to business, and government to government interactions. The provision of government information and services is a common definition of e-government. 365 days a year, seven days a week, and around the clock via the Internet, transcending distance and time (Msosa et al., 2022; Moon and Norris, 2005; Moon, 2002). Enterprises with e-commerce refer to businesses that sell to overseas mar- kets online (EU or rest of the world), businesses that conduct online sales through their own websites or applications, and even businesses that sell on- line through e-commerce platforms. On Eurostat (n.d.) e-commerce is broad- ly described as the exchange of products or services electronically using the internet or other computer-mediated (online communication) networks be- tween businesses, households, people, or private organizations. Although the payment and the actual delivery of the ordered goods or services may take place online or offline, the phrase refers to placing orders for them via com- puter networks (Altounjyet al., 2020). Employed ICT specialists -% of the total. The study focuses on the human capital component of DESI, particularly on employed ICT professionals and the labor force’s digital capabilities (percent of total employment). Herman Central European Public Administration Review, Vol. 20, No. 2/202218 Armenia Androniceanu, Irina Georgescu, Oana-Matilda Sabie (2020) points out in her study that in Romania as well as the rest of the EU, demand for ICT specialists in the labor market increased between 2008 and 2018. Both in terms of the employment of ICT professionals as a percentage of the entire labor force and the rate at which this percentage is increasing, Romania lags behind the EU significantly. Despite recent good trends, the employment potential of specialized ICT skills is still underutilized given that by 2020, the EU was projected to have a growing shortage of ICT specialists (European Commission, 2017; Herman, 2020). GDP growth rate. Di Telia et al. (2003) examined how macroeconomic fac- tors affected happiness. The authors discover evidence that, between 1975 and 1992, national happiness in Europe was influenced by both GDP level and GDP change. The impact of GDP growth on life satisfaction is consistent with theories of adaptation, which contend that the advantages of more income diminish over time (Perovic and Golem 2010). In addition, inflation, the unem- ployment rate and a measure of the welfare state’s generosity are included by Di Telia et al. (2003); all of these variables are found to be significant at normal levels and to exhibit the predicted signals. Internet use by individuals. Those without access to the internet could suf- fer economic disadvantages as it becomes a more vital instrument in our lives. The effect of ICT investment on economic performance appears to vary. Ac- cording to Roller and Waverman (2001), a critical level of telecommunications infrastructure results in rising returns on growth. Their research focuses on the role of telecommunication in economic growth. Their findings suggest that wealthy nations with adequate telecommunications infrastructure may have greater growth effects than emerging nations. Real labour productivity per person employed. Goschin (2014) showed that in both of the researchers’ built models, labor force and capital are substan- tial and positively influencing elements for macroeconomic growth. Real la- bor productivity per employed person is an important variable that reflects the quality and structure of the workforce in the second model Goschin (2014) developed. These variables have the anticipated favorable effect on GDP growth. Other researchers, like Bloom, Canning, and Sevilla (2004), af- firm in their study that a healthier population may produce more through increased labor productivity as well as capital accumulation. In addition to demonstrating how inputs and technologies impact output, a fully developed model of economic growth would also demonstrate how inputs’ growth rates and productivity are established. According to Caran et al. (2016), Romania’s labor productivity per employee reached a very high level, significantly higher than the EU average, during the crucial years between 2002 and 2004, when increases in labor productivity of 17.0 percent and 10.3 percent had a big im- pact on economic growth. Human Development Index. According to Blanchflower and Oswald (2006) one of the most well-known attempts to shift away from an exclusive focus on GDP is the Human Development Index (HDI). Despite the work put into this index, there is a strong correlation between HDI and GDP, which means that, Central European Public Administration Review, Vol. 20, No. 2/2022 19 The Impact of Digitalization on Public Administration, Economic Development, and Well-Being in the EU Countries for purposes of international comparison, the index does not provide any ad- ditional information beyond what we would have learned from GDP rankings (Perovic and Golem 2010]. Additionally, as Blanchflower and Oswald (2006) point out, the HDI does not accurately reflect a person’s psychological con- dition. There must be some indication of subjective well-being, or happiness. Life Ladder Index. In terms of GDP per capita, life ladder elasticity has a pos- itive sign and a statistical meaning; the effect is reliable and significant as a factor having an impact on the economy. So, at a 1 percent growth in GDP, the life ladder would rise (cumulatively) by an average of 0.829 percent (Cior- bagiu and Stoica, 2020). But how might the relationship be explained: a high- er degree of happiness is correlated with a higher level of personal income. With such money, people have greater access to a fulfilling social life, better services for maintaining or restoring their bodily and mental health, and ulti- mately, greater well-being. Research and development expenditure, by sector of performance. Re- searchers and policymakers who view investing in knowledge as a prerequisite for reaching a high growth rate have given specific focus to the function of research and development (R&D). The new growth paradigm emphasizes the significance of knowledge as the primary force behind economic expansion. The evolutionary approach, which views technology as the primary source of economic growth, and the endogenous growth theory, which interprets tech- nological advancement as a byproduct of economic activity, are the two key components of the new growth theory. The world’s living standards are rising as a result of investment in R&D and innovation, especially in industrialized na- tions where innovation is more heavily funded and new technology is adopted more swiftly (Morina, 2019). Pop Silaghi et al. (2014) investigated how R&D spending affected performance by sector. They come to the conclusion that while private R&D spending promotes economic growth, public R&D spending plays minimal influence. In order to promote innovative activity in business- es and through direct spending on education and training, the government should enact policies like tax credits and subsidies. Additionally, the govern- ment would offer incentives to businesses that presented extraordinary inno- vations and fresh concepts. On the other hand, Szarowská (2016) finds that government R&D spending is the primary engine of economic growth after examining the impact of R&D in 20 EU nations over the years 1995–2013. The Digital Economy and Society Index. According to European Commission (2019) the EU countries’ advancement toward a digital economy and society are using the Digital Economy and Society Index (DESI) in order to measure it. This composite index includes the following five key aspects of the digi- tal economy and society: connection (connectivity), human capital, internet use, digital technology integration, and digital government services. The present research analyzed in-depth the five sub-indicators briefly presented above, which are components of DESI. In order to reduce data dimensionality, we apply Principal Component Analy- sis (PCA) (Kassambara, 2017; Jolliffe, 2002) as a dimensionality reduction tech- Central European Public Administration Review, Vol. 20, No. 2/202220 Armenia Androniceanu, Irina Georgescu, Oana-Matilda Sabie nique that transforms the variables of a dataset organized in columns into a set of new features called Principal Components. Organizing the information on PCs, the data dimensionality is reduced without losing much information. PCs are new uncorrelated variables constructed as linear combinations of the initial variables. In summary, PCA consists of the following steps. After data scaling, we compute the eigenvalues and the eigenvectors of the covariance matrix. Applying various criteria for retaining a certain number of PCs, we will identify the PCs in order of significance, such that the first PC accounts for the highest variance in the dataset. The second PC will capture the next highest variance, etc. In the last step, the data are oriented to the axes represented by the PCs. In our case, we compute first the eigenvalues which quantify the amount of variation retained by each principal component (PC), as can be seen in Table 2. Table 2. Eigenvalues and the cumulative variance Source: Authors’s own computation The sum of eigenvalues gives a variance equal to 10. The second column con- tains the variation explained by the eigenvalues. The first eigenvalue explains 58.48% of the total variance. In the third column is shown the cumulative variation. The first 3 PCs explain together 77.67% of the total variance, ap- plying Kaiser’s rule. According to the principle of the proportion of variance explained, we will retain the first 3 PCs. The same conclusion is drawn by the scree plot presented in Figure 1. Central European Public Administration Review, Vol. 20, No. 2/2022 21 The Impact of Digitalization on Public Administration, Economic Development, and Well-Being in the EU Countries Figure 1. Scree plot explained by principal components Source: Authors’s own determination Next, we discuss the variables according to their quality of representation on the factor map and their contributions to PCs. The particularities of variables in the EU countries are reflected in figure 2. The biplot (Greenacre, 2010) is a plot that contains information on the observations and variables simultane- ously. On a biplot one can notice the relations between variables, the distanc- es between observations according to their similarities and the inner products between observations and variables. The correlations of variables can be seen on the factor map below. Positively correlated variables are grouped togeth- er. Negatively correlated variables are positioned in the opposed quadrants. Figure 2. PCA biplot with countries and variables Source: Authors’s own determination All variables are situated far away from the origin; therefore, they have a good representation on the factor map. High cos2 values indicate strong cor- relations between variables and PCs. Variables with high values of cos2 are situated close to the circumference of the correlation circle. Smaller values of cos2 correspond to variables closer to the center of the circle. Central European Public Administration Review, Vol. 20, No. 2/202222 Armenia Androniceanu, Irina Georgescu, Oana-Matilda Sabie In Figure 2, variables with middle values of cos2 are:: PROD, ECOM, DIG, CON, and RDE. Variables with low values of cos2 are represented by GDPG. The remaining variables have high values of cos2. The biplot summarizes the determinants of the first two dimensions. Countries like Estonia, Denmark, Sweden, Finland, France, Belgium, Austria, Germany, Slovenia, Spain, Luxem- bourg, Malta and Netherlands have as strong determinants: GDPG, ECOM, DIG, INTUSE, DESI, INT, EXPG, HDI, WHI, CON, EG and RDE. On the opposite pole are Romania, Bulgaria, Poland, Hungary, Croatia, Greece, Czech Republic, Latvia, Slovakia, Cyprus, Portugal, and Italy. The location of countries in Figure 2 proved that the countries situated in the right quadrant are mainly devel- oped economies that had to accelerate economic growth and fast digitaliza- tion. As a consequence, the Human Development Index and the Life Ladder Index, which are equivalent to the happiness indicator, have higher values. In developed economies, situated in the right quadrant, a quick process of digi- tization leads to economic growth. On the left quadrant in Figure 2 lie mainly emerging economies, which are more export-oriented and whose benefits from digitization come more from employment than from economic development. In Figure 3 Cos2 (square cosine) gives the quality of variable representation on the factor map. The square cosines of variables on the first 5 PCs are rep- resented in Figure 3. Figure 3. The cos2 of variables on the first 5 PCs Source: Authors’s own determination The three dimensions are not correlated. The first dimension is dominated by EG, ICT, INTUSE, HDI, WHI, DESI, HC and INT. It means that the first dime- sion will be called the impact of innovation on well-being and administration. The second dimension is characterized by government expenses EXPG and productivity PROD. On the biplot in Figure 2, government expenses and pro- ductivity point out in opposite directions, meaning that they are negatively correlated: when government expenses are relatively high, productivity is relatively low. Finally, the third dimension is dominated by GDP growth rate. It means that digitalization will have implications for technological progress in other areas. Policymakers should create digitization strategies for the sectors in which the impact of digitization is not seen yet. At the same time, policy- Central European Public Administration Review, Vol. 20, No. 2/2022 23 The Impact of Digitalization on Public Administration, Economic Development, and Well-Being in the EU Countries makers should encourage consumers, industries, and public administration to use digital services on a larger scale. The next step of the research is to apply K-Means clustering algorithm (Mac- Queen, 1967) to detect 4 well separated clusters. K-means algorithm is a clus- tering technique which groups the objects of a dataset into k similar clusters. The steps of the K-means algorithm are the following: k points called means are randomly initialized. Each object in the dataset is assigned to the closest mean and the mean’s co- ordinates are updated as the averages of the objects in that cluster. The process is repeated for a given number of iterations. In our case, the composition of the four clusters is the following: Cluster 1: Croatia, Italy Cluster 2: Austria, Belgium, Czech Republic, Estonia, France, Germany, Ireland, Luxembourg, Malta, Slovenia, Spain Cluster 3: Denmark, Finland, Netherlands, Sweden Cluster 4: Bulgaria, Cyprus, Greece, Hungary, Latvia, Lithuania, Poland, Portu- gal, Romania, Slovak Republic Figure 4 reveals a good separation of the four clusters in a plane whose axes are the first two principal components. Figure 4. Cluster Plot Source: Authors’s own determination Table 3 contains the cluster means after data scaling. The countries in cluster 3, mainly Nordic countries, have the highest governmental expenditure, e- government level, the highest number of enterprises with e-commerce, ICT specialists, and all indicators related to digitalization, but lower productivity, Central European Public Administration Review, Vol. 20, No. 2/202224 Armenia Androniceanu, Irina Georgescu, Oana-Matilda Sabie and are the happiest countries at the same time. The positive impact of digital technologies on happiness is analyzed by Mochón (2018), which believes that by a global and open communication of information, breaking down barriers and creating social networks, digital life improves well-being. Table 3. Cluster Means Cluster EXPG EG ECOM ICT GDPG INTUSE PROD 1 0.702 -1.457 -0.356 -0.616 -2.20 -1.322 -0.837 2 -0.058 0.239 0.325 0.344 -0.286 -0.427 -0.410 3 0.798 1.486 1.082 1.535 0.873 1.157 -0.645 4 -0.395 -0.566 -0.719 -0.869 0.406 -0.668 0.877 Cluster HDI WHI RDE HC CON INT DIG DESI 1 -0.56 -0.803 -0.434 -0.783 -0.827 0.156 -0.666 -0.6 2 -0.543 0.387 0.304 0.32 0.23 0.27 0.432 0.377 3 1.172 1.5 1.278 1.667 1.392 1.58 0.971 1.562 4 -0.955 -0.865 -0.759 -0.862 -0.644 -0.96 -0.731 -0.919 Source: Authors’s own determination As a result, the countries in cluster 3 also have the highest DESI index. Cluster 2 which contains the most developed economies ranks second in terms of the number of enterprises with e-commerce, e-government digitalization, the number of ICT specialists, digital public services, happiness indicators, and the DESI index. Cluster 1 ranks third with respect to the majority of indicators and the DESI index. The last position in this ranking is occupied by the countries in cluster 4, where Romania and Bulgaria are placed. According to Figure 4 and Table 3 and taking into account the above remark that government expenses and productivity are negatively correlated, one can notice the relatively low productivity in clusters 1, 2, and 3, and relatively high productivity in cluster 4; and the relatively low economic growth in clusters 1 and 2, and relatively high economic growth specifically in cluster 3, but also in cluster 4. This im- plies that the most digitalized Nordic countries included in cluster 3 had the highest economic growth, but low productivity, while the least digitalized countries of cluster 4 (including e.g., Romania and Bulgaria) had the lowest economic growth, but the highest productivity. 4 Conclusions In this paper, we applied Principal Component Analysis to study the panel of 27 EU member states and 15 variables as a simplified structure of three princi- pal components, which explain together 77.67% of the original variance. The first dimension is dominated by e-government, the percent of ICT specialists in total, internet use by individuals, Human Development Index, Digitalization Central European Public Administration Review, Vol. 20, No. 2/2022 25 The Impact of Digitalization on Public Administration, Economic Development, and Well-Being in the EU Countries Index, Happiness Indicator, Human Capital and integration of digital technol- ogy (Georgescu et al., 2020). It means that the first direction will be called the impact of innovation on well-being and administration. The second dimension is dominated by government expenses and productivity, which are negatively correlated. Finally, the third dimension is dominated by GDP growth rate. The combination of these indicators influencing the first PC measures the short- term effects of digitalization on public administration. Another part of the research is dedicated to a clustering of the EU countries in 4 clusters by means of K-Means clustering algorithm. All four clusters are well determined, with a ranking in which cluster 1 which contains three Nordic countries places on top, followed by cluster 3 of well-developed countries, and cluster 4 of mainly emerging economies. The most digitalized countries are the Nordic countries, placed in cluster 3, having the highest economic growth and relatively low productivity, while the least digitalized countries in cluster 4 such as Romania and Bulgaria had the lowest economic growth, but the highest productivity. The short research period does not allow identifying long-run effects and it can be viewed as a limitation of the study. While the effectiveness of digitali- zation specifically on economic growth and productivity can be hard to show in such a short research period, 2019-2021, the correlation between digitali- zation and well-being can be easily seen. In future research, we propose to extend the analysis period and increase the number of research variables Central European Public Administration Review, Vol. 20, No. 2/202226 Armenia Androniceanu, Irina Georgescu, Oana-Matilda Sabie References Abdallah, S. et al. (2009), The Happy Planet Index 2.0: Why good lives don’t have to cost the Earth. The New Economics Foundation: London. Agostino, D., Arnaboldi, M. and Lema, M. D. (2021). New development: COVID-19 as an accelerator of digital transformation in public service delivery. Public Money and Management, 41(1), pp. 69–72. Altounjy, R. et al. (2020). Moving from bricks to clicks: Merchants’ acceptance of the mobile payment in Malaysia. International Journal of eBusiness and eGovernment Studies, 12(2), pp. 126–142. doi:10.34111/ijebeg.202012204 Androniceanu, A. and Georgescu, I. (2021). E-Government in European countries, a comparative approach using the Principal Component Analysis. NISPAcee Journal of Public Administration and Policy, 14(2), pp. 65–86, 2021. https:// doi.org/10.2478/nispa-2021-0015 Androniceanu, A. and Marton, D.M. (2021). The psychosocial impact of the Romanian government measures on the population during the COVID-19 pandemic. Central European Public Administration Review, 19(1), pp. 7–32. https://doi.org/10.17573/cepar.2021.1.05 Androniceanu, A-M. et al. (2020). A Multidimensional Approach to Competitiveness, Innovation and Well-Being in the EU Using Canonical Correlation Analysis. Journal of Competitiveness, 12(4), pp. 5–21. https://doi. org/10.7441/joc.2020.04.01 Androniceanu, A., Georgescu, I. and Kinnunen, J. (2022). Public Administration Digitalization and Corruption in the EU Member States. A Comparative and Correlative Research Analysis. Transylvanian Review of Administrative Sciences, 65E, pp. 5–22. Armenia, S. et al. (2021). A systems approach to the Digital Transformation of Public Administration. PROSPETTIVE IN ORGANIZZAZIONE, 14. Arsić, M. (2020). Impact of Digitalization on Economic Growth, Productivity and Employment. Economic Themes, 58(4). pp. 431–457. DOI: 10.2478/ ethemes-2020-0025. Balcerzak, A. P. et al. (2022). Blockchain Technology and Smart Contracts in Decentralized Governance Systems. Administrative Sciences, 12(3), p. 96. Barabashev, A., Makarov, I. and Zarochintcev, S. (2022). How to shape government policies on high-technology development using the indicative evaluation of risks? Administratie si Management Public, 38, pp. 70–89. Doi: 10.24818/amp/2022.38-04 Bellamy, C. and Taylor, J.A. (1998). Governing in the information age. Public Policy and Management. Bessonova, E. and Battalov, R. (2020). Digitalization as a tool for innovative economic development. Economic Annals-XXI, p. 186. Blanchflower, D. and Oswald., A. (2006). »Happiness and the Human Development Index: The Paradox of Australia.« Working Paper no. 11416, National Bureau of Economic Research, Cambridge, MA. Bloom, D. E., Canning, D. and Sevilla, J. (2004). The effect of health on economic growth: a production function approach. World Development, 32(1), pp. 1–13. https://doi.org/10.1016/j.worlddev.2003.07.002 Bodemann, M. (2018). Management in Public Administration, Londra: Springer Gabler. Central European Public Administration Review, Vol. 20, No. 2/2022 27 The Impact of Digitalization on Public Administration, Economic Development, and Well-Being in the EU Countries Caran, M., Peres, C. and Noja, G. G. (2016). Productivity and economic growth. The Macrotheme Review, 5(1). At , accesed 2 July 2022. Casula, M., Leonardi, C. and Zancanaro, M. (2020). How does digital technology impact on the co-production of local services? Evidence from a childcare experience. Public Money and Management, pp. 1–11. https://doi.org/10.108 0/09540962.2020.1728066 Certomà, C. (2022). Future scenarios of Digital Social Innovation in urban governance. A collective discussion on the socio-political implications in Ghent. Cities, 122, pp. 103–142. Ciorbagiu, I. and Stoica, A. (2020). The importance of affective and cognitive dimensions of happiness-analysis in European countries. Annals of Constantin Brancusi, University of Targu Jiu. Economy Series, 6. Clark, J. L., Algoe, S. B. and Green, M. C. (2018). Social network sites and well- being: The role of social connection. Current Directions in Psychological Science, 27(1), pp. 32–37. Corydon, B., Ganesan, V. and Lundqvist, M. (2016). Transforming government through digitization. At , accessed 11 January 2022. European Commission. (2019). Digital Economy and Society Index (DESI). At , accessed 11 January 2022. European Commission. (2020). The Digital Europe Programme. At , accessed on 7 January 2022. European Commission. (2021). The Digital Economy and Society Index (DESI). At , accessed 8 January 2022. European Commission (2022). Digital Scoreboard. DESI composite index. At , accessed 22 September 2022. Central European Public Administration Review, Vol. 20, No. 2/202228 Armenia Androniceanu, Irina Georgescu, Oana-Matilda Sabie Eurostat. (n.d.). Glossary: E-commerce. At , accessed 8 January 2022. Eurostat. (2022). Production in industry –monthly data. European Statistical Office (Eurostat). At , accessed 22 September 2022. Frajman I., A. (2016). Limitations of the GDP as a measure of progress and well-being. Ekonomski vjesnik: Review of Contemporary Entrepreneurship, Business, and Economic Issues, 29(1), pp. 257–272. Gajdoš, J. and Hudec, O. (2020). European Cities: What Matters for Subjective Well-Being? Theoretical and Empirical Researches in Urban Management, 15(4), pp. 5–20. Georgescu, I. et al. (2020). A Computational Approach to Economic Inequality, Happiness and Human Development. Informatica Economica, 24(4), December, pp. 16–27. Goschin, Z. (2014). Remittances as an economic development factor. Empirical evidence from the CEE countries. Procedia Economics and Finance, 10, pp. 54–60. doi: 10.1016/S2212-5671(14)00277-9 Greenacre, M. (2010). Biplots in Practice. BBVA Foundation, Bilbao, Spain. At , accessed 16 September 2022. Herman, E. (2020). The Influence of ICT Sector on the Romanian Labour Market in the European Context. Procedia Manufacturing, 46, pp. 344–351. https:// doi.org/10.1016/j.promfg.2020.03.050 Ivanová, E., Žárská, V. and Masárová, J. (2021). Digitalization and human capital development. Entrepreneurship and Sustainability Issues, 9(2), pp. 402–415. http://doi.org/10.9770/jesi.2021.9.2(26) Jolliffe, I. T. (2002). Principal Component Analysis. Second Edition, Springer. Kafel, T., Wodecka-Hyjek, A. and Kusa, R. (2021). Multidimensional public sector organizations’ digital maturity model. Administratie si Management Public, 37, pp. 27–40. Doi: 10.24818/amp/2021.37-02 Kassambara, A. (2017). Practical Guide to Principal Component Methods in R. CreateSpace Independent Publishing Platform. Kim, S., Andersen, K. N. and Lee, J. (2022). Platform government in the era of smart technology. Public Administration Review, 82(2), pp. 362–368. Kinnunen, J et al. (2021). Dynamic Indexing and Clustering of Government Strategies to Mitigate Covid-19. Entrepreneurial Business and Economics Review, 9(2), pp. 7–20. https://doi.org/10.15678/EBER.2021.090201 Kryzhanovskij, O. A., Baburina, N. A. and Ljovkina, A. O. (2021). How to make digi- talization better serve an increasing quality of life? Sustainability, 13(2), p. 611. Larsson, K. K. (2021). Digitization or equality: When government automation covers some, but not all citizens. Government Information Quarterly, 38(1), p. 101–147. Lindgren, I. et al. (2019). Close encounters of the digital kind: A research agenda for the digitalization of public services. Government Information Quarterly, 36(3), pp. 427–436. Löfving, L. et al. (2022). Can digitalization be a tool to overcome spatial injustice in sparsely populated regions? The cases of Digital Västerbotten (Sweden) and Smart Country Side (Germany). European Planning Studies, 30(5), pp. 917–934. Central European Public Administration Review, Vol. 20, No. 2/2022 29 The Impact of Digitalization on Public Administration, Economic Development, and Well-Being in the EU Countries MacQueen, J. B. (1967). Some Methods for classification and Analysis of Multivariate Observations. Proceedings of 5th Berkeley Symposium on Mathematical Statistics and Probability, no.1. University of California Press, pp. 281–297. Maiti, M. and Kayal, P. (2017). Digitization: Its Impact on Economic Development & Trade. Asian Economic and Financial Review, 7(6), pp. 541–549. https://doi. org/10.18488/journal.aefr.2017.76.541.549 Mali, N.V. (2020). Leveraging Digital Innovation for Governance, Public Administration, and Citizen Services: Emerging Research and Opportunities. IGI Global. Mergel, I., Edelmann, N. and Haug, N. (2019). Defining digital transformation: Results from expert interviews. Government information quarterly, 36(4), pp. 101–385. Michaelson, J. et al. (2009). National Accounts of Well-being: Bringing Real Wealth Onto the Balance Sheet. The New Economics Foundation, London. Mochón, F. (2018). Happiness and Technology: Special Consideration of Digital Technology and Internet. International Journal of Interactive Multimedia and Artificial Intelligence, 5(3), pp. 162–168. Doi: 10.9781/ijimai.2018.12.004 Moller, F.S. (2020). Public Administration: Perspectives, Management and Challenges. New York: Nova Science Publishers. Moon, M. J. (2002). The evolution of e-government among municipalities: Rhetoric or reality? Public Administrative Review, 62, pp. 424–433. Moon, M. J. and Norris, D. (2005). Does managerial orientation matter? The adoption of reinventing government and e-government at the municipal level. Information Systems Journal, 15, pp. 43–60. Morina, F. (2019). How do economic openness and R&D investment affect economic growth? Panel data regression for 28 EU countries. IAI ACADEMIC CONFERENCE PROCEEDINGS, p. 52. Msosa, S. K., Ntshangase, B. A. and Mlambo, C. (2022). Gender parity among researchers in science, technology, engineering and mathematics. Entrepreneurship and Sustainability Issues, 9(4), pp. 243–261. https://doi. org/10.9770/jesi.2022.9.4(13) Munoz, L.A. and Bolivar, M. (2018). International E-Government Development. Policy, Implementation and Best Practice. Londra: Palgrave Macmillan. Mura, L., Zsigmond, T. and Machová, R. (2021). The effects of emotional intelligence and ethics of SME employees on knowledge sharing in Central- European countries. Oeconomia Copernicana, 12(4), pp. 907–934. https://doi. org/10.24136/oc.2021.030 Nathan, R. J. et al. (2019). Electronic commerce for home-based businesses in emerging and developed economy. Eurasian Business Review, 9(4), pp. 463– 483. https://doi:10.1007/s40821-019-00124-x Neamtu, B. and Dragos, D. C. (2014). Fighting corruption in public procurement: The case of Romania. Integrity and Efficiency in Sustainable Public Contracts. Balancing Corruption Concerns in Public Procurement Internationally. Bruxelles: Bruylant. Nikolina, I. I. et al. (2020). Assessment of digitalization of public management and administration at the level of territorial communities. Natsional’nyi Hirnychyi Universytet. Naukovyi Visnyk, (5), pp. 150–156. Central European Public Administration Review, Vol. 20, No. 2/202230 Armenia Androniceanu, Irina Georgescu, Oana-Matilda Sabie Noh, Y. H. and Yoo, K. (2008). Internet, inequality and growth. Journal of Policy Modeling, 30(6), pp. 1005–1016. https://doi.org/10.1016/j. jpolmod.2007.06.016 Norris, D. F. (2010). E-Government 2020: Plus ca change, plus c’est la meme chose. Public Administration Review, 70, 180–181. Perovic, L. M. and Golem, S. (2010). Investigating macroeconomic determinants of happiness in transition countries: How important is government expenditure? Eastern European Economics, 48(4), pp. 59–75. Pop Silaghi, M. I. et al. (2014). Do Business and Public Sector Research and Development Expenditures Contribute to Economic Growth in Central and Eastern European Countries? A Dynamic Panel Estimation. Economic Modelling, 36, pp. 108–119. https://doi.org/10.1016/j.econmod.2013.08.035 Pucheanu, F. et al. (2022). Industry 4.0, Sustainability and Innovation at the Crossroad: A Review Analisys. Management Research and Practice, 14(3), pp. 47–69. Reis, J. et al. (2019). Digitalization: A literature review and research agenda. International Joint conference on industrial engineering and operations management, pp. 443–456. Springer, Cham. Roller, L. H. and Waverman, L. (2001). Telecommunications infrastructure and economic development: A simultaneous approach. American Economic Review, 91(4), pp. 909–923. Rosenbloom, D. (2014). Public Administration: Understanding Management, Politics and Law in the Public Sector. New York: McGraw-Hill Education. Scupola, A. and Mergel, I. (2022). Co-production in digital transformation of public administration and public value creation: The case of Denmark. Government Information Quarterly, 39(1), p. 101–150. Sharma, S. et al. (2022). Digital citizen empowerment: A systematic literature review of theories and development models. Information Technology for Development, pp. 1–28. Sidak, M., Hajnišová, E. and Fabuš, M. (2021). Determination of objectives and responsibilities of public administration bodies in correlation with legal and managerial aspects: case study of the Slovak Republic. Entrepreneurship and Sustainability Issues, 8(3), pp. 592–603. http://doi.org/10.9770/ jesi.2021.8.3(37) Špaček, D., Csótó, M. and Urs, N. (2020). Questioning the real citizen-centricity of e-government development: Digitalization of G2C services in selected CEE countries. Network of Institutes and Schools of Public Administration in Central and Eastern Europe. The NISPAcee Journal of Public Administration and Policy, 13(1), pp. 213–243. Strafford, B. and Schindlinger, D. (2019). Governance in the Digital Age, San Francisco: Wiley. Szarowská, I. (2016). Impact of Public R&D Expenditure on Economic Growth in Selected EU Countries. The 9th International Scientific Conference Business and Management, pp. 1–9. https://doi.org/10.3846/bm.2016.16. Szeiner, Z. et al. (2022). An empirical study of consulting in a transitional economy in the Central European region during COVID-19. Journal of Eastern European and Central Asian Research (JEECAR), 9(3), pp. 471–485. https:// doi.org/10.15549/jeecar.v9i3.854 Central European Public Administration Review, Vol. 20, No. 2/2022 31 The Impact of Digitalization on Public Administration, Economic Development, and Well-Being in the EU Countries Tangi, L. et al. (2021). Mandatory provisioning of digital public services as a feasible service delivery strategy: evidence from Italian local governments. Government Information Quarterly, 38(1), p. 101–143. Urs, N. (2018). E-Government Development in Romanian Local Municipalities: A Complicated Story of Success And Hardships. Transylvanian Review of Administrative Sciences, 55, pp. 118–129. Vasiliades, M. A. et al. (2021). A Systematic Literature Review on the Participation Aspects of Environmental and Nature-Based Citizen Science Initiatives. Sustainability, 13(13), p. 74–57. Viana, A. C. A. (2021). Digital transformation in public administration: from e-Government to digital government. International Journal of Digital Law, 2, pp. 29–46. Doi: 10.47975/IJDL/1viana Vyshnevskyi, O. S. (2020). Impact of digitalization on industry: problems of definition in EU countries. Economy of Industry, 1(89), pp. 31–44.