An approach to the measurement of the digital economy

Abstract

The digital economy is a relatively new phenomenon associated with the so-called fifth stage of the industrial revolution. Digitalisation is associated with the further automation of processes based on connected devices, data analytics and artificial intelligence technologies. Consequently, it is vital to measure the current level of a country’s economy to identify the level of its digitalisation. As digitalisation covers a wide range of activities, various indicators are considered for the measurement of the digital economy. The methodology developed should be based on the weight given to each indicator and the group of indicators disclosed. Hence, this article aims to proposea methodology for assessing the digital economy that is based on the methodology developed by the OECD. The primary goal of the paper is to revise the groups and their indicators and assign weights to them. TheAnalytic Hierarchy Process (AHP) was applied to give weights to the so-called groups and the underlying indicators for the evaluation of the digital economy. AHP is based on pairwise comparison, which is considered one of the most reliable techniques of expert evaluation. The main result of the current study is updated OECD methodology, which is devoted to measuring the level of a country’s digital economy. One group of indicators– finance – was added, and the weights for each group and the underlying indicatorswere assigned. In other words, the present research contributes to knowledge of measuring thedigital economy by providing a new group of indicators for assessing its level.The research results could be helpful for a country’s policy-makers in terms of developing a strategy for the transition to the digital economy. The methodology provided would enablethem to evaluate the present situation and to set a benchmark that should be achieved.