THE ROLE OF DIGITAL TRANSFORMATION IN ENHANCING MSME COMPETITIVENESS ACROSS EU

Abstract

This study investigates how digital transformation influences the competitiveness of micro, small, and medium-sized enterprises (MSMEs) in the European Union (EU). Using data from the Flash Eurobarometer 486 survey, the analysis focuses on the adoption of digital technologies and the barriers that hinder their effective integration. Key variables include the type of digital technologies adopted, perceived barriers to digitalization, firm size, and the presence of strategic growth planning. A linear regression model is employed to assess how these factors influence firm growth, measured by changes in employment and turnover. The results show that MSMEs adopting advanced digital tools – such as artificial intelligence, big data analytics, and cloud computing – tend to experience higher levels of growth and competitiveness. In contrast, technologies like robotics and blockchain show no significant effect. Barriers such as lack of financial resources, limited digital skills, and inadequate infrastructure do not significantly predict growth. However, internal resistance to change and uncertainty about future digital standards are negatively associated with firm performance. The study highlights the importance of internal capabilities and strategic planning over external constraints.