Assessment of key parameters for clustering EU countries by socio-economic development components

Type of the article: Research Article Abstract Socio-economic development in the EU countries is a complex process encompassing both social and economic progress. It involves enhancements in living standards, quality of life, and overall well-being, alongside economic growth and structural changes. Thus, the paper aims to identify and assess the key parameters for clustering EU countries by the components of their socio-economic development. The study utilized fifteen indicators from the Social Progress Index and the Human Development Index, reflecting different components of countries’ social development. Using the k-means method, the EU population is divided into three clusters (13, 5, and 9 countries, respectively) based on their similarity in social development. Then, using the decision tree method, the above indicators were assessed, including the following: “Nutrition and Medical Care,” “Health,” “Environmental Quality,” “Rights and Voice,” “Freedom and Choice,” and “Advanced Education.” These indicators are used as the key parameters for clustering countries by components of socio-economic development; therefore, their change largely determines the positions of countries as a whole and, accordingly, their convergence at the EU level. The study found significant differences between EU countries in their socio-economic aspects, particularly between the “old” and “new” members. The results obtained can be used to justify the priorities of EU socio-economic policy to ensure overall progress. Acknowledgment This article was published as an output of the project VEGA 1/0392/23: Changes in the approach to the development of distribution management concepts of companies influenced by the impact of social and economic crisis caused by the global pandemic and increased security risks. Funded by the EU NextGenerationEU through the Recovery and Resilience Plan for Slovakia under the project No. 09103-03-V01-00042.