Current societal systems are characterized by the rapid development of technologies and digitalization. Closely related to communication methods and processes, networking processes, and information flows [1
], digital transformation has become a factor of the societal transitions affecting different innovation systems. This fosters the innovative integration of entrepreneurial and business models in different industries [3
], determining the development of digital entrepreneurship. We suggest that digital entrepreneurship relates not only to specific outcomes of business activities. It is rather a multidimensional phenomenon that interrelates various elements in industrial supply chains within various innovation systems. The development and impact of digital entrepreneurship differ in regard to the different socioeconomic conditions, determining different patterns of digital transformation. This may also include challenges (e.g., [8
]) and supporting conditions for doing digital business (e.g., [9
]). The variety of existing indicators and indices provides measurements for specific digital categories (e.g., ICT, value in a digital economy, digital risk), as well as for the impact of digitalization on socioeconomic processes (e.g., employment, innovation development, financial flows). However, the interrelation of existing indicators, including those that measure digital business and its different dimensions, with the overall digital transformation process is highly dynamic and non-deterministic.
According to Tilson et al., digitalization is “a sociotechnical process of applying digitizing techniques to broader social and institutional contexts that render digital technologies infrastructural” [10
]. As a source of digital transformation, digitalization is interpreted as “the changes that the digital technology causes or influences in all aspects of human life” [11
]. In its turn, digital entrepreneurship as a part of such transformation processes may be considered, on the one hand, a driving force for innovation development [5
]. On the other hand, it becomes a challenge (i.e., vulnerabilities and opportunities) for the resilience and, ultimately, the sustainability of the innovation system in general [14
]. Therefore, it is particularly important to understand how digital entrepreneurship as a driver of digital transformation may affect the sustainable transition capacity of the innovation system and, consequently, the socioeconomic system. In our research, we consider the innovation system as a subsystem and important driver within the dynamics of the total socioeconomic system, particularly with respect to its development, transition, and sustainability processes.
The research aims to provide a theory-based systematization of core performance indicators of digital entrepreneurship in order to understand its role within multidimensional digital transformation processes. We aim to understand the interrelation between different aspects of digital entrepreneurship as part of the innovation and, consequently, socioeconomic system. To achieve this aim, we provide a critical reflection on core indicators of digitalization and digital entrepreneurship and analyze their interrelations. As a basis for our reflections, we apply the results of theory systematization acquired in previous research [16
]. The research provides the determinants of digital entrepreneurship within the three dimensions of the innovation system (i.e., entrepreneur, entrepreneurial process, and ecosystem), which cover a broad scope of elements from mentality patterns, personal characteristics, and outcomes to the organizational management process and the influence of external infrastructure and institutions. The analysis of the correlations between the determinants of digital entrepreneurship in the framework of the innovation system provides a useful basis for further determination of the correlates between such entrepreneurship and its sustainable implications for the socioeconomic system in general.
In addition to the main objective, the research aims to provide a supporting consolidation of the relevant digital entrepreneurship indicators for its target group (e.g., policy makers, business agents, and entrepreneurs as well as researchers).
The article is organized as follows. In Section 2
, we describe a working process and research design that was applied for systematization of core performance indicators. Section 3
provides an overview of the existing data sources and relevant indicators that characterize digitalization and digital entrepreneurship. In Section 4
, we provide an overview of the core indices and indicators based on a country comparison. In Section 5
, we analyze how the indicators and subindices are correlated within the determinants of digital entrepreneurship and, therefore, different dimensions of the innovation system.
2. Materials and Methods
The research includes two stages: (1) theory systematization and (2) core performance indicators systematization (Figure 1
As illustrated in Figure 1
, theory systematization is represented by the results of the systematic literature review on digital entrepreneurship that was conducted in previous research and provides the basis for analysis [16
]. Applying the Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA) approach, the core determinants of digital entrepreneurship were defined and clustered within three core dimensions: Entrepreneur, Entrepreneurial Process, and Ecosystem. According to the PRISMA method, the selection process was performed in four steps: (1) the identification of relevant research by briefly searching through the databases (Harvard Hollis and Web of Knowledge); (2) a screening of abstracts; (3) a full-text assessment; and (4) decision-making concerning eligibility. After all screening stages 52 peer-reviewed articles published in journals from 2014 to 2018 in the English language were included in the review. For the detailed description of the method as well as the review process (including the exclusion and inclusion criteria, coding, and consolidation) see [16
In this article, we apply the findings of the abovementioned research as a conceptual basis. We further extend the theoretical achievements with the systematization of core performance indicators. As a first step, we screened the existing pool of indicators and indices and identified the most relevant concerning the focus of our research (see Section 3
). Based on the chosen indices, we provide an overview of the main tendencies of digitalization and digital entrepreneurship on a country basis (see Section 4
). Further, we build a matrix that shows how the existing metrics (i.e., indicators and indices) and their subindices are interconnected with the determinants of the digital entrepreneurship (see the Matrix of indicators and indices in relation to determinants of digital entrepreneurship in Section 5
). In order to analyze digital entrepreneurship within the framework of digital transformation, we apply correlation analysis, which allows for defining the interrelatedness of the core indicators and indices within the different dimensions of the innovation system. A detailed description of the correlation dataset and coefficients is provided in Section 5.2.1
In general, the indicator sets discussed are related to digital business and digital entrepreneurship as part of digital transformation at a country level. Particularly, applying the Digital Evolution Index, Digital Trust (The Fletcher School of Tufts University), the International Digital Economy and Society Index (European Commission), and the Network Readiness Index (World Economic Forum), we analyze the overall tendency of digitalization and the factors that show its interconnectedness with the core elements of the socioeconomic system. The European Index of Digital Entrepreneurship Systems (European Commission) and the Ease of Doing Digital Business (The Fletcher School of Tufts University) are the indicators that we apply for the analysis of digital business, its core elements, and their interrelatedness with the other factors of digitalization.
4.1. Digital Evolution Index
The Digital Evolution Index (DEI) was developed by researchers at The Fletcher School of Tufts University (US) and provides an analysis of the current state of countries’ digitalization levels as well as digital potential and prospects (“momentum”) [17
]. According to the original report (Digital Planet 2017. How Competitiveness and Trust in Digital Economies Vary Across the World) the structure of the index comprises the following elements [17
(1) Supply Conditions: Access Infrastructure (communication, sophistication, and coverage security); Transaction Infrastructure (access to financial institutions and electronic payment options); Fulfillment Infrastructure (the quality of transportation infrastructure, logistics performance);
(2) Demand Conditions: Consumer Capacity to Engage (consumer ability and willingness to spend and the gender digital divide); Digital Payment Uptake (the degree of financial inclusion and use of digital money); Digital Uptake (device prevalence and density, technology, Internet and mobile connection uptake, and digital consumption);
(3) Institutional Environment: Institutions and the Business Environment (the legal environment and efficiency in settling disputes, IP and investment protections and bureaucracy); Institutions and the Digital Ecosystem (government uptake and the use of ICT and digital technology, and telecom competition); Institutional Effectiveness and Trust (transparency, rule of law, and regulatory quality);
(4) Innovation and Change: Inputs (financing options and opportunities, start-up capacity, ability to attract and retain talent); Process (sophistication of business practice, and R&D); Output (the depth of mobile engagement, reach of innovation, and use of social networks and digital entertainment).
The country rates for the Digital Evolution Index in 2017, with the rates of digital momentum are shown in Figure 2
4.2. Digital Trust
In addition to the Digital Evolution Index, the mentioned research includes the Digital Trust (DT) framework, which includes four main drivers [17
(1) Behavior that shows the correlation between the engagement behavior of users and their attitude toward digitalization;
(2) Attitudes that relate to users’ feelings about the digital environment and their trust in transactions and data security;
(3) Experience – based on the quality of users’ digital experiences as a proxy measurement that demonstrates “the extent of frictions” in a country’s digital environment, i.e., the speed and ease of digital interactions and transactions with respect to different sources of frictions (e.g., regulatory, infrastructural);
(4) Environment – an evaluation of the “maturity” of trust indicators, such as privacy, security, and accountability measures.
The scores for the four drivers of Digital Trust in 2017 are shown in Figure 3
As shown in Figure 3
, the country rankings also differ within each of the four drivers. Country leaders according to the scores for the Attitudes driver are Australia, China, and Sweden. The highest rankings for the Behavior driver were for China, Ireland, and Spain. Estonia, the Netherlands, and Switzerland are the leaders in the Environment driver. Finally, Experience is the strongest driver of digital trust in Norway, South Korea, and Switzerland.
4.3. The International Digital Economy and Society Index
The International Digital Economy and Society Index (I-DESI) was prepared for the European Commission and provides analyses and comparisons of the digital performance of 45 countries (the EU’s 28 member states and 17 non-EU countries). According to the European Commission, the I-DESI is an extended version of the Digital Economy and Society Index (DESI) since it measures similar variables for EU and non-EU countries. The I-DESI combines 24 indicators in five different dimensions [18
(1) Connectivity (fixed broadband, mobile broadband, speed, and affordability);
(2) Human capital (basic skills and usage, advanced skills and development);
(3) Citizen Internet use (content, communications, transactions, and ubiquitous use);
(4) Business technology integration (business digitization, e-Commerce);
(5) Digital public services (e-Government development index).
For further analysis, we chose the I-DESI because, on the one hand, there is no difference in structure compared to the DESI, and, on the other hand, it allows the comparison of the trends of digital transformation within different country groups (i.e., EU and non-EU countries). Figure 4
illustrates a comparison of the overall I-DESI rates for EU and non-EU countries as well as the rates of its different dimensions.
The analysis of the I-DESI demonstrates that the digital performance of EU and non-EU countries in 2016 increased to 0.59, compared to 0.51 and 0.50, respectively, in 2013. During the analyzed period, the largest change for both country groups was within the Connectivity dimension. Although there were no significant differences in the overall rates of the I-DESI for both country groups, the largest variations of the index within the dimensions were Digital public services and Citizen Internet use. Figure 5
shows the EU and non-EU countries with I-DESI rates in 2016 higher than the average.
4.4. The Network Readiness Index
The Network Readiness Index (NRI) was initially developed in 2001 and extended in 2012 by the World Economic Forum. The core implication of the index relates to the assessment of a country’s ability to benefit from digital transformation. In other words, NRI measures at what rate digital technologies may be implemented within a certain socioeconomic system and how they impact it [19
]. The index consists of 53 indicators structured within four subindices [19
(1) Environment subindex: Political and regulatory environment, business and innovation environment;
(2) Readiness subindex: Infrastructure, affordability, skills;
(3) Usage subindex: Individual usage, business usage, government usage;
(4) Impact subindex: Economic impacts, social impacts.
The overall scores of the NRI and rates of its subindices in 2016 are shown in Figure 6
Among the analyzed countries, the highest NRI score relates to Finland, which is also among the leaders in terms of all subindices, except for the Usage subindex. The lowest NRI score relates to China.
4.5. Ease of Doing Digital Business
As previously noted, in addition to the DEI and DT, researchers at The Fletcher School developed the Ease of Doing Digital Business scale (EDDB) in 2019, which combines the basic measures that are important for doing digital business on different stages. Particularly, the index combines [20
(1) Platform levers: e-commerce, for online trading and delivery platforms (e.g., Amazon, eBay); digital media, referring to platforms for distributing media and entertainment (e.g., YouTube); sharing economy, meaning platforms for sharing items between individuals and groups (e.g., Uber, Airbnb); online freelance, for platforms connecting individual freelancers with potential employees (e.g., Upwork);
(2) Foundational factors: data accessibility, meaning the intensity of data flows, the extent of free flow of data, policies for public data sharing; digital and analog foundations referring to conditions of demand, supply, institutions, and innovation; World Bank Doing Business, including the Doing Business Distance to Frontier score by the World Bank, which shows how far an economy’s performance is from the best performance observed for each Doing Business topic across all economies and years (“frontier”).
The scores of the EDDB scale for 2019 are shown in Figure 7
The overview provides evidence that the rates of the EDDB correlate relatively to the rates of the Digital Evolution Index (see Figure 2
) among countries. According to the methodology of the index, the scores of digital platforms include such levers as supply, institution, and market sophistication.
4.6. The European Index of Digital Entrepreneurship Systems
The European Index of Digital Entrepreneurship Systems (EIDES), provided by the European Commission, measures physical and digital ecosystem conditions for stand-up, start-up, and scale-up ventures in 28 EU countries [21
]. The EIDES structure includes two condition frameworks [21
(1) General Framework Conditions that are applied broadly to entrepreneurship and include the following “pillars”: Culture and Informal Institutions; Formal Institutions, Regulation, and Taxation; Market Conditions; and Physical Infrastructure;
(2) Systemic Framework Conditions that affect the entrepreneurial dynamic and are related to resources in terms of such “pillars” as Human Capital; Knowledge Creation and Dissemination; Finance; and Networking and Support.
illustrates the country distribution according to the scores of the EIDES rates for the year 2018.
According to the rates for the EIDES, the 28 EU countries are clustered in four groups based on their general and systemic framework conditions for digital entrepreneurship. Denmark, Sweden, Luxembourg, and Finland were country leaders, with an average rate of 75.7 on the EIDES. Comparatively, the average EIDES rate for the countries lagging behind (e.g., Poland, Latvia, Italy) was 24.9.
As noted above, according to the methodology of the index, the Systemic Framework Conditions depend on the entrepreneurial dynamic, which includes three phases, namely the stand-up, start-up, and scale-up stages (see Figure 8
The structure of the EIDES according to the scores of the main pillars for each country group is shown in Figure 9
According to the main dimensions in the framework conditions, the highest rate of EIDES scores among the country leaders had the Culture and Informal Institutions pillar, 91.3. For laggard countries, the highest rate of EIDES had a Networking and Support pillar, 35.1.
The aim of this research was to provide a theory-based systematization of core performance indicators of digital entrepreneurship in order to understand how digital tendencies affect the transformation of business frameworks and how they may further relate to innovation system resilience. As a theoretical basis for such systematization, we applied the results of previous research (i.e., a systematic literature review in the field of digital entrepreneurship). In particular, we based the indicator analysis on 10 determinants of digital entrepreneurship clustered within three dimensions: Entrepreneur, Entrepreneurial process, and Ecosystem. We analyzed the current tendencies of digital entrepreneurship in different countries. In order to understand how the indicators can be applied to evaluate digital entrepreneurship, we analyzed their interrelatedness with the determinants of digital entrepreneurship. Applying the correlation analysis, we examined how the different dimensions of digital entrepreneurship are interconnected. This provided evidence for the role of a systematic approach in the understanding of the digital transformation of socioeconomic systems. Moreover, the overview of the relevant digital entrepreneurship indicators, their strengths, focuses, and possible implications is posited as a supporting consolidation for readers (e.g., policy makers, business agents, and entrepreneurs as well as researchers).
With respect to future research, the results presented in this paper call for the extended study of societal transitions, particularly those brought about by digital transformation. Particularly important is the application of a systems science approach in a field of entrepreneurial transformation and further formation of a competence portfolio. Such an approach would advance the understanding of the interrelatedness of entrepreneurial processes with socioeconomic system dimensions, particularly in terms of global societal transitions [34
]. This includes an understanding of how the resilience and sustainability of a socioeconomic system, on the one hand, may be affected by different disturbances and vulnerability factors within its interrelated dimensions. On the other hand, such understanding may define the role of digital entrepreneurs in contributing to the resilience of the innovation system and, consequently, the sustainability of the socioeconomic system in general.