The ICT Sector in Economic Development of the Countries of Eastern

Europe: a Comparative Analysis

MAKSYM DUBYNA

Department of Finance, Banking and Insurance,

Chernihiv Polytechnic National University,

Chernihiv, 14039, UKRAINE

NATALIIA KHOLIAVKO

Department of Finance, Banking and Insurance,

Chernihiv Polytechnic National University,

Chernihiv, 14039, UKRAINE

ARTUR ZHAVORONOK

Department of Public, Corporate Finances and Financial Mediation,

Yuriy Fedkovych Chernivtsi National University,

Chernivtsi, 58029, UKRAINE

YURIY SAFONOV

Scientific Institute of Education Content Modernization,

Kyiv, 01001, UKRAINE

DENYS KRYLOV

Department of Finance, Banking and Insurance,

Zaporizhzhia National University,

Zaporizhzhia, 69061, UKRAINE

YULIIA TOCHYLINA

Department of Economics and Entrepreneurship

Odessa State Academy of Civil Engineering and Architecture,

Odessa, 65125, UKRAINE

Abstract: - The purpose of the article is to study the impact of the ICT sector on economic development of

countries based on the comparative analysis of this sector development in some Eastern European countries.

Within the article, economic development of the outlined countries in 2010-2019 was studied and analyzed.

The analysis of the impact of the ICT sector on the GDP formation allowed to single out certain groups of

countries under this indicator and to identify the characteristics that are inherent to them. Using the correlation-

regression analysis made it possible to analyze the ICT impact on economies development of Hungary,

Bulgaria, Poland, Romania, Slovakia and the Czech Republic. Authors paid a special attention to the study of

the influence of various factors on the ICT sector development. Accordingly, an analytical study of the

dependence of the ICT sector weight in the GDP of the countries on the following parameters: enterprises that

employ ICT specialists; enterprises that provided training to develop/upgrade ICT skills of their personnel;

percentage of the ICT personnel in total employment; using Internet for Internet banking, % of individuals;

enterprises who have ERP software package to share information between different functional areas;

enterprises selling online (at least 1% of turnover), % of enterprises; online purchase in the last 12 months, %

of individuals; enterprises having received orders via computer mediated networks, % of enterprises. Within the

article, the features of the ICT sector development in the COVID-19 context are examined, and it is analyzed

how the pandemic has affected the development of this sector in long and short terms. The study showed that

the ICT sector today already plays a key role in the development of the national economies. Countries where

the sector is developing faster show better performance and economic development.

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Maksym Dubyna, Nataliia Kholiavko,

Artur Zhavoronok, Yuriy Safonov,

Denys Krylov, Yuliia Tochylina

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Key-Words: - information and communication technologies, national economy, information technologies,

economic development, digitalization, digital services.

Received: July 9, 2021. Revised: December 26, 2021. Accepted: January 10, 2022. Published: January 11, 2022.

1 Introduction

Digitalization as one of the main trends in the

global economy, transforms all spheres of

human activity: from everyday life to

professional activities and business. The

number of individuals and households using the

Internet is growing every year, the range of

devices for the Internet access is expanded;

there is an increase in the frequency of the

computer technology use. Areas of the Internet

use by individuals are actively diversified: from

traditional sending/receiving e-mails and

telephoning/video calls to creating websites,

Internet banking and selling goods/services.

Innovation information-communication

technologies are integrated in the enterprises’

activities. According to Eurostat, in the EU-28

97% of all enterprises (without financial sector;

10 persons employed or more) have Internet

access; 78% – have websites; 53% – use any

social media; 26% – pay to advertise on the

Internet. The competitiveness of enterprises and

national economies is largely determined by the

degree of their perception of innovation

information and communication technologies,

the speed of their modernization and

implementation in economic activities of

economic entities. In particular, 26% of

enterprises of the EU-28 buy cloud computing

services used over the internet; 12% – analyze

big data; 4% – use 3D printing; 18% – buy e-

mail (as a CC service); 14% – buy office

software; 10% – buy finance or accounting

software applications; 8% – buy CRM-

software, etc. (Eurostat). In these conditions,

the requirements to digital skills of staff are

changing, and enterprises allocate significant

funding to organize training courses to

develop/upgrade ICT skills of their personnel.

With the IT sphere development, the latest

technologies, which deepen transformation

processes in the national economy, appear.

There is a gradual increase in the percentage of

the ICT sector in GDP: 4,21% in Germany,

4,34% in France, 5,96% in the United

Kingdom, 3,43% in Norway, 5,43% in Finland,

3,48% in Austria, 3,33% in Italy. Despite the

global economic crisis, parameters of the use of

information and communication technologies

by enterprises show a growing trend. Moreover,

this trend is typical in both developing and

developed countries over the past decade.

2 Literature Review

The huge role of digitalization in ensuring economic

growth is recognized by the countries of the

European Union. This is reflected in a number of

European initiatives, for example: Digital Europe,

Innovation Union, Industrial policy for the

globalization era, Going Digital (Making the

transformation work for growth and well-being).

Digitalization of socio-economic processes are

analyzed by many academics. Most researchers

agree on the decisive impact of digitalization on the

global economy development. Antikainen et al. [1]

note a positive impact of digitalization on the

rationalization of resource management. Rachinger

et al. [2] highlighted the impact of digitalization on

the optimization of business models and their

management improving their efficiency. We are

impressed by the position of Heavin and Power

(2018) [3], Ivashchenko et al. [4], Filippov et al. [5],

Vovk et al. [6], Zybareva et al. [7], Mishchuk et al.

[8], Tymchenko et al. [9], Tkachuk [10], who

emphasize structural changes caused by the

economy digitalization.

Digital transformation complicates the

technological process and accelerates the innovation

cycle [11; 12; 13]. Srai and Lorentz [14] investigate

the impact of digitalization on improving supply

management. A significant positive impact of

digitalization on business is to create the conditions

for its internationalization, the spread of start-ups

[15; 16; 17; 18; 19]. Moreover, Alcacer and Cruz-

Machado [20] justify the presence of this impact on

the formation of production ecosystems. Fitzgerald

et al. [21] note that digital transformation provides

an increase in the quality of customer services.

According to Paritala et al. [22], due to

digitalization, the level of customer orientation of

modern business is growing, as the production

process in these conditions becomes more adapted

to the demands of each consumer, becomes

individualized (individual). We hold the same view

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as McDonald and Rowsell-Jones [23] who state that

digital transformation creates value and income

from digital assets.

Valuable from a scientific and practical point of

view are the studies of Solis et al. [24], within which

aspects of the customer experience lifecycle are

considered. The impact of digitalization on politics,

business, public government, and social

development are researched in publications of

Collin et al. [25], Gimpel and Roglinger [26], Kane

et al. [27], Solosich et al. [28], Tulchynska et al.

[29], Vovk et al. [30], Viknianska et al. [31].

Aspects of the impact of information and

communication technologies on people’s lives are

revealed in the articles of Martin [31], Stolterman

and Forks [33]. Digitalization is making

revolutionary changes in the banking system

development, modifying both the processes of

information processing and the communication of

banks with customers [34; 35; 36; 37; 38; 39; 40;

41; 42].

Oliner and Sichel [43] investigated historical

aspects of the use of information and

communication technologies in economic activities

and noted the emergence of their positive effects

only since the late 1990s. Jorgenson and Stiroh [44]

based on the example of the United States argue that

the country’s economic growth was not driven by

technological change, but the replacement of

computer equipment. Instead, Jalava and Pohjola

[45] argue that information and communication

technologies were one of the main factors of

economic growth in the United States during this

period, and in Finland the above provided economic

growth of 0,4% in the late 1990s compared to the

late 1990s. In 2000, Schreyer [46] researched the

contribution of Information and Communication

Technology in the development of the G7 Countries.

The study of the impact of information and

communication technologies on the economic

growth of EU countries was contributed by Daveri

[47] and Van ark et al. [48] who found a significant

lack of European countries from the United States in

this parameter. Expanding the sample of analyzed

countries, Dewan and Kraemer [49] noticed a

significant positive impact of investment in

information and communication technologies on

developed countries, but noted not statistically

significant impact on developing countries. In

conclusion, these scientists state that ensuring the

investment productivity in information technologies

requires investment in the infrastructure, human

capital and knowledge-intensive sectors of

economy. This conclusion is fully consistent with

our vision of the complexity of digitalization

processes of the national economy system.

In 2005, research papers appeared that argue that

with the Internet access and the spread of

information and communication technologies, new

industrialized economies are showing higher rates of

economic growth [50]. Among the reasons for the

lag of developing countries in terms of effective use

of information and communication technologies

Edquist [51] notes the delay in the introduction of

the information technology in the activities of

enterprises in these countries. Instead, Antonelli

[52] predicted the like hood that developing

countries would benefit more from information and

communication technologies because, unlike

developed countries, they could quickly choose the

ICT-oriented paradigm and achieve high economic

performance quickly.

The scientific literature presents research results

of many scientists who have analyzed the impact of

information and communication technologies on

economic growth in different periods, various

geographic samples, at different economic levels.

Researchers use different methodologies, but most

conclude that there is a positive contribution of

innovative information technologies to the growth

of the national economy [53; 54; 55; 56]. At the

same time, scientists have studied various

communication devices, such as mobile phones [57;

58; 59; 60], as well, the broadband infrastructure has

been researched [61; 62; 63; 64; 65]. Valuable for

our study is the conclusion of Seo et al. [66] on the

existence of a two-way link between the amount of

investment in information and communication

technologies and the economic growth of the

country.

3 Methodology

To conduct a thorough study of the ICT

development in countries such as Hungary,

Bulgaria, Poland, Romania, Slovakia and the Czech

Republic, within the article, methods of statistical,

index, correlation and regression analysis are used.

In particular, the index method was used to identify

certain trends of the ICT development in these

countries, which allowed to determine the GDP

growth rate in Eastern Europe, the volume of

products and services in the information sphere. At

the same time, the official basis for the study were

Eurostat official data.

In addition, in the article, the correlation and

regression analysis was used. In particular, the

impact of changes in the volume of the ICT sector n

changes in GDP was determined through the

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construction of cubic one-factor regression models,

such as:



 xxxy

Y – endogenous variable;

Х – exogenous variable;



- parameters of the calculation model.

At the same time, peculiarities of the impact of

individual indicators on the ICT development in the

outlined countries were carried out by constructing linear

multifactor regression models, such as:

Y = AX +ɛ,

Y – vector of values of the dependent (effective)

feature;

X – matrix of explanatory (factor) features,

which has dimension n Х m (n – number of

observations; m – number of factors);

A – vector of the model parameters

(



...,,, 3210

);

ɛ – vector of residues.

Therefore, considering the outlined factors and a

methodology, the correlation and regression analysis

was developed for all countries, which ICT sphere is

analyzed in the article, the dependence of the types:

88776655443322110



XXXXXXXXY 

As factor features, the following ones were

considered:

X1 - enterprises that employ ICT specialists, %;

X2 - enterprises that provided training to

develop/upgrade ICT skills of their personnel, %;

X3 - percentage of the ICT personnel in total

employment, %;

X4 - using Internet for Internet banking, % of

individuals;

X5 - enterprises who have ERP software package

to share information between different functional

areas, %;

X6 - enterprises selling online (at least 1% of

turnover), % of enterprises;

X7 - online purchase in the last 12 months, % of

individuals;

X8 - enterprises having received orders via

computer mediated networks, % of enterprises.

4 Results

Therefore, the study should be started with a general

analysis (review) of the trends of economic

development in countries such as Hungary,

Bulgaria, Poland, Romania, Slovakia and the Czech

Republic. In Fig. 1, information on the GDP volume

calculated per capita in these countries and GDP

grow rates are presented.

The data of Fig. 1 show that over past ten years

in the outlined countries there has been economic

development, which is accompanied by periodic

declines. However, it can be stated that the level of

economic and social security of citizens in the above

countries is constantly growing. The analysis of the

average GDP growth rate over past ten years shows

that the fastest growing economies were in Hungary

(the growth index -1,07) and in Romania (the

growth index-1,05). Accordingly, the lowest

economic growth rates were observed in Slovakia

(the growth rate -1,02). However, it should be noted

that this is an average indicator of the GDP growth.

In some years, the countries have shown more

dynamic economic development. However, for

example, 2014-2015 for Bulgaria, Poland, Romania,

Slovakia and the Czech Republic was a period of

short-term slowdown in economic development.

That is proved by information presented in Fig.1.

It should be also noted that among all

analyzed countries, the fastest growing

economy is in Hungary. By the way, economic

growth in this country has been stable over the

last ten years. From 2010 to the end of 2019,

the GDP volume per capita in this country

increased from 13,12 thous. euros to 24 thous.

euros, which is a significant achievement

among other Eastern European countries.

Among the outlined countries, the lowest

GDP volume per capita is inherent to Bulgaria

(9,58 thous. euros in 2019) and Romania (11,8

thous. euros in 2019). However, these indicators

did not increased in average for 30,% over last

ten year, which indicates the development of

economy, the formation of a stable basis for

further economic development of the above

countries.

The development of economy of any country

is the result of a number of decisions and

numerous measures to build a system of the

national economy, which takes place in a

constantly changing world, where external

factors in relation to any country are objective

and have a significant impact on their

development.

These processes include informatization,

digitalization, which are currently actively

developing in the world and change both the

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structure national economies, and the very

paradigm of economic development of the

countries.

The essence of this change is gradual growth

of the role of information sectors of the national

economy in economic development, the

introduction of modern information technology

in the functioning of all enterprises, companies

and organizations without exclusion.

The general nature of changes in the world

economy in the context of digital

transformations leads to changes in approaches

to understanding the way to develop economy

to maximize positive effects of information

economy, which is objectively an integral part

of modern society.

GDP volumes calculated per capita, thousands euro

Average GDP growth rate in Eastern Europe

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Fig. 1: Information on economic development of the countries of Eastern Europe

Source: compiled based on information of the Statistics Service of the European Union,

https://ec.europa.eu/eurostat

It is the development of information

technology, which is paid today a key role by

government of these countries to. New areas

formed in accordance to new conditions of

economic development, on the one hand, ensure

the development and implementation of

innovative technologies in all spheres and

sectors of economy, and on the other hand,

independently create GDP by providing their

own services to other businesses. Thus, the ICT

development in developed countries today is an

integral part, synonymous with economic

development. That is the reason to analyze in

detail the development of this sphere in

Hungary, Bulgaria, Poland, Romania, Slovakia

and the Czech Republic. In Fig. 2, information

on the volume of products and services of the

ICT sector per capita in the outlined countries is

presented.

Fig. 2: Volume of products and services of the ICT sector per capita, thous. euros

Source: compiled by the authors based on information of The Statistic Service of the European Union,

https://ec.europa.eu/eurostat

Analyzing the information in Fig.2, after

making appropriate calculations, according to

the level of the ICT sector development, the

outlined countries were divided into two

groups:

1) countries of Eastern Europe with dynamic

ICT development, which include Hungary, the

Czech Republic and Slovakia. This group of

countries is characterized by rapid development

of the given sector, total introduction of

innovations in all spheres of society.

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The pace of development of the ICT sector

in Hungary is of particular note. If in 2010, the

volume of products, services and goods

produced within this sector made 7,44 billion

euros, then in 2019 – 14,16 billion euros, that is

it has actually increased twice. Actually, it is

not possible to provide this development

without appropriate support of the state. In

these countries, the governments paid special

attention to the ICT development, that

contributed to the activation of economic

activity in the above sector.

2) countries of Eastern Europe with

evolutionary ICT development – the countries

where gradual development of the outlined

sector takes place, which is due mainly by their

economic development. This group includes

Bulgaria, Poland and Romania. Governments of

these countries today pay important attention to

the ICT sector development; in particular,

strategies for this sector development were

adopted. At the current stage, the growth rate of

ICT products and services per capita in the

countries of this group indicates active

development of such technologies.

It should be noted that 2014-2015 became

crucial for the ICT sector development. Until

now, the ICT sector development in all

countries was observed at a fairly equal level

for each of them, the growth rate remained

stable. Staring from 2015, active development

of the ICT sector in all countries (Fig.1) can be

observed, which is connected with increased

attention to digitalization on the part of

authorities (the EU level) and leading

enterprises and organizations (the macro

economic level). For instance in 2015, A

Digital Single Market Strategy for Europe was

adopted, in October 2015 in Lisbon (Portugal)

a large-scale event “ICT 2015 Innovate,

Connect, Transform” with more than 6000

participants was conducted, there were 2

European Commissioners, more than 120

speakers who spoke at 15 panel sessions.

Moreover, until 2015, there had been practical

implementation of A Digital Agenda for

Europe. According to The Global Information

Technology Report (ICTs for Inclusive Growth)

in 2015 under The Readiness Index, Poland was

included to top-50 countries of the world, and

Romania demonstrated a significant jump

raising its positions by 12 points (ranked 63rd

according to this index). The role of the ICT

sector in the GDP formation of the countries

should be analyzed. Relevant information is

presented in Fig. 3.

Fig. 3: Share of the ICT sector in the GDP volume, %

Source: compiled by the authors based on information of The Statistic Service of the European Union,

https://ec.europa.eu/eurostat

Considering the data in Fig. 3, it can be

stated that for different countries the role of the

ICT sector is differs for today, however, one

can observe simultaneous and constant growth

of GDP volumes in all countries produced in

this sector. The countries were divided into

three groups depending on the share of the ICT

sector in GDP of the country.

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Group І – countries with the biggest share of

the ICT sector. This group includes Hungary,

where the development of the outlined sector is

the most rapid. The ICT sector is also beginning

to play an active role in the GDP growth in

Bulgaria. As of the end of 2019, the share of the

ICT sector in GDP of this country made 5,92%,

which is higher than in Hungary (5,82).

Group ІІ – countries with stable share of the

ICT sector in the volume of their GDP. This

group includes the Czech Republic and

Slovakia. It should be noted that the decrease of

the outlined share from 4,43% in 2010 to 4,32%

in 2019 can be observed. However, during

2010-2019, GDP of the Czech Republic

increased nearly for 30%, which states about

the growth of the ICT sector in the country.

Similar situation can be observed in Slovakia.

In this country over the last ten years, the share

of the ICT sector in GDP decreased from 4,64%

to 4,01%, but at the same time, GDP of the

country increased nearly for 20%, which

proves the ICT sector development.

Group ІІІ – countries with active

development of the ICT sector and its gradual

increase in the GDP role. This group includes

such countries as Poland, and Romania. In these

countries, we can still see a small percentage of

the ICT sector in GDP. However, as it is proved

by the data in Fig.3, this situation is gradually

changing. Starting from 2015, part of the

outlined sector is constantly growing. If in

2014, its share in GDP of Poland made 3,05%,

then in 2019 – 3,26%. Similar situation can be

observed in Romania. In 2013 – 3,13%, and in

2019 – 3,71%.

In addition, within the article, the

correlation-regression analysis to build an

understanding of the ICT impact on the GDP

development is used, and econometric models

of the relationship between changes in the pace

of the ICT implementation and GDP growth in

Hungary, Bulgaria, Poland, Romania, Slovakia

and the Czech Republic are built. Relevant

calculations are presented in Fig. 4. At the same

time, much attention is paid to the need to

stimulate the ICT sector development, the

formation of conditions for stable development

of small businesses in the field of information

and communication technologies. It is clear that

the ICT sector and its efficiency are becoming

an integral part by ensuring the country’s

competitiveness in the global economic space.

It should be noted that the issues of the ICT

sector development are becoming especially

important today given the objectivity of

digitalization and informatization processes, it

is also necessary to understand how to ensure

the ICT sector growth, on which factors its

stable orientation depends.

To this end, we conducted a study of the

determination of individual factors of different

nature for the ICT sector development in each

of the countries: Hungary, Bulgaria, Poland,

Romania, Slovakia and the Czech Republic.

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HUNGARY BULGARIA

POLAND ROMANIA

SLOVAKIA THE CZECH REPUBLIC

2,8913,72ICTICT*0,99ICT*0,33GDP 23 

1,0818,56ICTICT*37,9ICT*30,35GDP 23 

65,845,46ICTICT*3,56ICT*5,41GDP 23 

2,129,21ICTICT*3,86ICT*0,07GDP 23 

64,018,95ICTICT*41,27ICT*26,57GDP 23 

71,325,71ICTICT*0,61ICT*3,74GDP 23 

R=0.9463

R=0.8952

R=0.9366 R=0.9451

R=0.793

R=0.9827

Fig. 4: Impact of the change of the ICT sector on the GDP change

Source: compiled by the authors based on information of The Statistic Service of the European Union,

https://ec.europa.eu/eurostat

To carry out the outlined study, a

methodology of the correlation-regression

analysis was used, and linear multifactor

regression models were built, which allowed to

determine algebraic equations of the

relationship between the share of the ICT sector

in GDP and individual factors. The results of

the conducted modeling are presented in Fig. 5.

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Country Dependence model

Hungary Y = -0.4688-0.07843X1 + 0.07482X2 + 2.0418X3 +

+0.03027Х4-0.02487X5-0.3335X6-0.04651X7 +

+ 0.3367X8

Bulgaria Y = 3.5772-0.01534X1 + 0.03908X2 + 0.7507X3-

0.1728X4--0.1107X5 + 0.02886X6 + 0.1162X7 +

+0.1192X8

Poland Y = 2.8269-0.03584X1-0.01707X2-0.8741X3-

0.00633X4-0.05162X5-0.1224X6 + 0.09609X7 +

+0.1481X8

Romania Y = 0.9849-0.02535X1-0.03332X2 + 0.9839X3-

0.04455X4 + +0.0437X5-0.05645X6-0.01698X7 +

+0.08741X8

Slovakia Y = 6.7067 + 0.000809X1-0.04153X2-0.2464X3-

0.00237X4--0.0749X5 + 0.3646X6 + 0.02149X7-

-0.2903X8

The Czech

Republic

Y = 4.9287 + 0.02444X1-0.05193X2-

-0.09042X3 +0.01452X4-0.01568X5-

-0.03608X6+0.00357X7 + 0.03048X8

Hungary

Bulgaria

Poland

Romania

Slovakia

The Czech Republic

Country Х1Х2Х3Х4Х5Х6Х7Х8

-0.07843 0.07482 2.0418 0.03027 -0.02487 -0.3335 -0.04651 0.3367

-0.01534 0.03908 0.7507 -0.1728 -0.1107 0.02886 0.1162 0.1192

-0.03584 -0.01707 -0.8741 -0.00633 -0.05162 -0.1224 0.09609 0.1481

-0.02535 -0.03332 0.9839 -0.04455 0.0437 -0.05645 -0.01698 0.08741

0.000809 -0.04153 -0.2464 -0.00237 -0.0749 0.3646 0.02149 -0.2903

0.02444 -0.05193 -0.09042 0.01452 -0.01568 -0.03608 0.00357 0.03048

X1- enterprises that employ ICT

specialists, %;

X2- enterprises that provided training

to develop/upgrade ICT skills of their

personnel, %;

X3- percentage of the ICT personnel

in total employment, %;

X4- using Internet for Internet

banking, % of individuals;

X5- enterprises who have ERP

software package to share

information between different

functional areas, %;

X6-enterprises selling online (at least

1% of turnover), % of enterprises;

X7-online purchase in the last 12

months, % of individuals;

X8-enterprises having received

orders via computer mediated

networks, % of enterprises.

R=0.999

R=0.994

R=0.995

R=0.998

R=0.993

Fig. 5: Models of the dependence of the share of the ICT sector in GDP of countries on other parameters

Source: compiled by the authors based on information of The Statistic Service of the European Union,

https://ec.europa.eu/eurostat

By analyzing the data presented in Fig. 5, we

can make the following conclusions. First, the

development of the ICT sector in all countries

was positively affected by the percentage of

enterprises that received orders via the Internet,

which indicates a gradual change in traditional

marketing systems of these enterprises and

allows for active development of online orders

and related software. Given significant pace of

the economy digitalization of all countries, it is

logical that the outlined parameter increases and

has a positive impact on the outlined sector

development. In addition, the functioning of the

ICT sector in virtually all countries was

positively affected by the growth of enterprises

that sell their own goods and services via the

Internet (at least 1% from the turnover). This

indicator exclusively in Romania and Hungary

does not pay such key meaning in the ICT

sector development compared to other

countries.

Thus, the ICT sector depends on many

factors, both external (global trends,

international information services market), and

internal ones (political stability of countries,

economic cycle phase, inflation rate, level of

business innovation, etc.), which determines

this sector as complex economic objective

knowledge. However, the inseparability of this

sector from economic development, according

to the study, is objective.

5 Discussion

The COVID-19 coronavirus pandemic has

shaken the world affecting positive dynamics of

the global economy. In our study, we

deliberately limited ourselves to analyzing the

data of 2019 in order to prevent distortion of

information and ensure the reliability of the

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DOI: 10.37394/23207.2022.19.18

Maksym Dubyna, Nataliia Kholiavko,

Artur Zhavoronok, Yuriy Safonov,

Denys Krylov, Yuliia Tochylina

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results obtained on the identified trends,

patterns and casual relationships. National

economies of the number of countries have

experienced powerful adverse effects of the

pandemic and quarantine restrictions in 2020. In

this context our research correlates with the

results and conclusions formulated in research

papers [67; 68; 69; 70; 71; 72; 73; 74]. The

decline in oil prices and major indices of the

world stock exchanges in the United Kingdom,

Japan and the United States had a negative

impact on the development of national

economies. Some countries, which revenues on

a large extent depend on the tourism industry,

have been significantly affected by restrictions

on crossing state borders, the suspension of

flights and the operation of hotels and

restaurants. The challenges of the pandemic to

the national economies outlined above are

deeply analyzed and substantiated in the work

of S. Roy [75], and study of de Vet J.M. et al.

[76].

Manifestations of the pandemic impact on

the economies of the countries analyzed in the

article (Hungary, Bulgaria, Poland, Slovakia,

The Czech Republic) are the decline in real

GDP, rising unemployment, decrease of foreign

trade, reduction of incomes, and accordingly,

the level of citizens’ solvency, narrowing of

social assistance programs, as well as the

bankruptcy of a number of small and medium

enterprises. Referring the last thesis, the results

of the research by Markovic et al. [77] should

be presented, with which we fully agree. In

particular, these scientists argued that the

COVID-19 crisis had a negative impact on

small businesses in the spheres of consulting,

entertainment (event-management),

construction and architecture, financial services,

marketing and advertising. At the same time,

we fully support the view of Markovic et al [77]

that the COVID-19 pandemic has formed

prerequisites for the activation of the

development of small and medium business in

the e-commerce, IT-services, R&D services

spheres.

As it is evidenced by official statistics

(Eurostat), at the background of the growing

unemployment of population and reducing the

employment level of the youth in the pandemic

period, the increase of the employment

indicator of ІСТ-specialists in Bulgaria can be

observed (from 3,1% of employed in 2019 to

3,3% in 2020), The Czech Republic (from 4,0%

to 4,2%), Hungary (from 3,4% to Poland (from

3,1% to 3,4%), Romania (from 2,3% to 2,4%),

Slovakia (from 3,7% to 4,2%). Attention should

be also paid to the employment in high – and

medium – high technology manufacturing

sectors and knowledge – intensive service

sectors, as in the 2019-2020 period they showed

relatively small declines in employment, and in

Bulgaria and Slovakia there was even an

increase in this indicator by 0,1% and 0,3%

accordingly (Eurostat).

In the analyzed context, we consider

appropriate to present the following facts:

during 2019-2020, the enterprises’ total

turnover from e-commerce sales has grown for

5% in Romania, 2% in Bulgaria, and it was on

comparatively high level in the Czech Republic

(more than 30% of turnover of enterprises) and

in Hungary and Slovakia (more than 20% of

turnover of enterprises). As it can be seen from

Table 3, The International Monetary Fund gives

quite optimistic forecasts concerning the

national economies development of the

analyzed countries of the EU in 2021-2022,

when forbearance of quarantine conditions and

wide vaccination of population from acute

COVID-19 respiratory diseases is envisaged.

However, achievements of the predicted

indicators presented in Table 1 is possible only

on the basis of active digitalization of business

and management, development of information

literacy of population, increasing the level of

innovation activity of enterprises and

establishment of favorable partnership of the

government, business, universities and the

public.

Table 1. Prognosis of the International Monetary Fund for 2021-2022, annual % change

Country

Real GDP

Consumer Prices

Current Account Balance

Unemployment

2021

2022

2021

2022

2021

2022

2021

2022

Bulgaria

4.4

1.0

2.0

1.4

1.2

4.8

4.4

Czech Republic

4.2

4.3

2.3

2.0

0.9

0.1

3.4

3.2

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Hungary

4.3

5.9

3.6

3.5

-0.4

-0.3

3.8

3.5

Poland

3.5

4.5

3.2

2.5

2.0

1.3

4.9

4.5

Romania

6.0

4.8

2.8

2.1

-5.0

-4.7

4.9

Slovakia

4.7

4.4

1.2

1.9

-1.2

-2.0

7.3

6.7

Source: The International Monetary Fund, https://www.imf.org

Judging from the results of the analysis

carried out in the framework of this article, we

can state that the COVID-19 pandemic in

Eastern Europe countries has neutral or even

often positive impact on the ICT sector

development. Having come to this conclusion,

we should note our solidarity with the position

of Evans C. [78] who substantiated that the ICT

sector provides a set of tools and resources

necessary for business and national economies

in new isolation, social distancing and other

quarantine restrictions. Proving her position,

Evans C. [78] explored three elements of the

pandemic’s impact on the ICT sector, namely:

accelerated digital transformations; growing

importance of the information technology in

economy and society; deepening inequalities in

the access to the advanced technologies use.

This comprehensive approach to the analysis

used in the research of Evans C. (2020), in our

point of view, is the most appropriate in today’s

turbulent socio-economic environment with a

high degree of uncertainty and unpredictability.

We believe that this approach should be based

on the principles of flexibility, dynamism and

efficiency to ensure the collection of rapidly

updated information and its analysis in real

time.

6 Conclusion

Modern information and communication

technologies are a powerful factor in the national

economies growth; in scientific literature, a positive

impact of these technologies on the pace of

economic growth and the competitiveness of the

countries in the global dimension is proved. In this

article, by using approbated research tool, this thesis

is substantiated related the countries of Eastern

Europe (Bulgaria, The Czech Republic, Hungary,

Poland, Romania, Slovakia) in the 2010-2019

period. Within the article the authors divided the

analyzed countries into two groups according to the

level of the ICT sector development: 1) countries of

Eastern Europe with dynamic ICT development

(Hungary, the Czech Republic, Slovakia) -

characterized by rapid development of the ICT

sector, total introduction of innovations in all

spheres of society; 2) countries of Eastern Europe

with evolutionary ICT development (Bulgaria,

Poland and Romania) – characterized by gradual

development of the outlined sector, developed

strategies for ICT sector, high growth rate of ICT

products and services per capital.

The conducted research allowed identification of

three groups of Eastern Europe countries depending

on the share of the ICT sector in GDP of the

country:

Group І – countries with the biggest share of the

ICT sector (Hungary, Bulgaria) - the development

of the ICT sector is the most rapid; the ICT sector is

beginning to play an active role in the GDP growth;

Group ІІ – countries with stable share of the ICT

sector in the volume of GDP (the Czech Republic,

Slovakia) - the decrease of the outlined share from

4,43% in 2010 to 4,32% in 2019;

Group ІІІ – countries with active development of the

ICT sector and its gradual increase in the GDP role

(Poland, Romania) - small percentage of the ICT

sector in GDP; in the same time this situation is

gradually changing starting from 2015.

It is emphasized by the authors that the COVID-19

pandemic and quarantine restrictions caused by it

destroyed the usual manner of socio-economic

processes both in the regional and national, and

interstate levels. In these new conditions of

economic activity, economic entities of some

countries of the world faced with a very high level

of uncertainty, strict restrictions for business, as

well as the reduction of the population solvency.

It is noted by the authors that the pandemic led not

only to problems for the national economies

(growing unemployment, production decrease, GDP

reduction, devaluation of the national currency,

bankruptcy of the enterprises., etc.), but it has

formed additional preconditions for the IT sector

development and the business digitalization.

Companies that were able to transfer their activities

and communication with consumers online,

primarily due to active introduction of information

and communication technologies, managed to

maintain their competitive positions. The presence

of a holistic digital component in the development

strategy, the formed e-skills of the staff, the

dynamism of updating information technology and

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Artur Zhavoronok, Yuriy Safonov,

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mastering digital tools of the interaction with

stakeholders gave the above companies additional

competitive advantages. In addition, it should be

emphasized that digital transformation of business

has provided it with high resilience to the challenges

of the COVID-19 pandemic. The only exception

was the period of the “first wave” of quarantine

restrictions, lockdown, when there was a certain

decline in the development of enterprises in the ICT

sector, but compared to other sectors, this decline

was insignificant. After a fairly rapid adaptation to

new conditions of the operation, digital enterprises

began to increase the pace of development and

increase the level of profitability of their activities.

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