SMEs' digitalization impact on economic development

Abstract

The accelerated development of information and communication technologies has caused notable changes in all spheres of life and business. In order to contribute to their own economic goals and the economy in general, companies are forced to embrace technological innovations. This study aims to test a hypothesis that the digitalization of business operations in small and medium-sized enterprises (SMEs) positively influences economic development. Since the degree of digitization is a complex phenomenon, it is approached through several quantitative indicators. The data from the Eurostat database were used for the research. The analysis results obtained using the structural equations modeling confirm the positive relationship between the level of digitization of SMEs and gross domestic product (GDP).