The Digital Transformation of European Union Countries before and during COVID-19

Abstract Background The transformation of business and the economy is a key business problem, and its importance was further heightened during the COVID-19 pandemic, with the increased pressure on enterprises. Hence, the digital readiness of their business will likely determine its future competitiveness in the field. Objectives: The paper addresses the issue of digital readiness for business, with the aim of examining similarities and differences in the digital readiness of European Union countries. The main focus is on identifying the changes during the first two years of the pandemic. Methods/Approach: We conducted a factor analysis and hierarchical cluster analysis based on selected indicators. The results revealed some significant differences. Results: While the countries that lead in digital readiness remained the same, there were relatively large differences in the classification of other EU countries. Some countries, such as Latvia or Slovenia, significantly improved in many aspects of digital readiness during the pandemic. On the other hand, Bulgaria and Romania are still included in the same cluster, representing an overall low digital readiness. Conclusion: Enterprises in more developed countries also have a higher level of digital readiness. Although COVID-19 had a positive impact on digital readiness in some less developed countries, the impact is only partial, indicating a need for stronger actions to bridge the digital divide at the EU level. These findings provide a hopeful outlook, suggesting that with the right actions, the digital divide in the EU can be effectively bridged.