The diffusion of digital skills across EU regions: structural drivers and polarisation dynamics

The digital transformation is an important driver of long-run productivity growth and, as such, it has the potential to promote a more inclusive and sustainable growth. However, digital capabilities, crucial to develop and govern new digital technologies, are unevenly distributed across European regions, increasing the risk of divergence and polarisation. By taking advantage of a set of original indicators capturing the level of digital skills in the regional workforce, this work analyses the factors shaping the process of digital skill accumulation in the EU over the period 2011-2018. Relying on transition probability matrices and dynamic random effects probit models, we provide evidence of a strong and persistent regional polarisation in the adoption and deployment of digital skills. Further, we investigate whether structural factors and European funds (European Regional Development Fund, Cohesion Funds and European Social Funds) are capable of shaping the digitalisation process and favouring regional convergence.

Automated summary

The digital transformation is crucial for long-term productivity growth and has the potential to promote inclusive and sustainable growth. However, there is an uneven distribution of digital capabilities across European regions, leading to a risk of divergence and polarization. This study examines the factors influencing the accumulation of digital skills in the EU from 2011 to 2018 and finds evidence of regional polarization in the adoption and deployment of digital skills. Additionally, the study investigates the impact of structural factors and European funds on the digitalization process and regional convergence.