The Impact of Digital Transformation on the Western Balkans: Tackling the Challenges Towards Political Stability and Economic Prosperity (WB-DIGI)

Commissioned by: Deutsche Telekom, Telenor Norway, Telenor Serbia, Telenor Montenegro, Telekom Austria, SAP, Ernst&Young
Project duration: October 2, 2017 – February 9, 2018
Project manager: Maruška Vizek
Collaborators: Tajana Barbić, Tanja Broz, Goran Buturac, Branka Domić, Ivana Kovačević, Davor Mikulić, Vedran Recher, Nebojša Stojčić, Marina Tkalec, Iva Tomić, Maruška Vizek
 
 
Summary:
The main objectives of the study were to raise attention for digital transformation in the Western Balkans and to create leverage for discussions on a political level with all relevant stakeholders in the region. In general, the study addressed the steps that were required to reach an improved and desired future state of digitalization in the Western Balkans. Thereby, the focus was not only on economic and commercial aspects, but also on social, political, and cultural aspects.
 
In the first step of the analysis performed in the study, the economic impacts of digital transformation on the Western Balkans were analyzed, focusing thereby on economic aggregates (GDP, employment, and productivity). Additionally, analysis was done with regard to the extent by which the investments of ICT players contributed to economic value creation in the region (via input-output tables).
 
In the second step, enhanced and improved possibilities for cross-border trade and cross-border interaction based on a harmonized and standardized digital transformation process were examined in order to determine whether there were “synergies” from a harmonized and collaborative digital transformation that exceed the mere sum of benefits that would accrue at an individual country-level.
 
In the third step, an analysis and survey of the (existing) micro-level data and corresponding research were conducted to complement the macro-analysis and to show the benefits and potentials digital transformation could have for certain markets and industries.
 
Finally, the challenges and benefits from an economic perspective for the so-called analog complements (labor markets and old-economy industries) were addressed. In particular, focus on a theoretical basis was placed on the implications of digital transformation for labor markets by potentially allowing a more (transaction cost) efficient matching and allocation process.