Uncovering patterns of digital transformation of European economies using self-organizing maps

Abstract

Digital technologies have become a key driver of economic growth, competitiveness, and social inclusion, while significant disparities in digital development persist across national economies. The aim of this study is to map and interpret the trajectories of digital transformation in 30 selected European countries (EU member states, associated economies, and Ukraine) during 2011–2022. The study employs the self-organizing map (SOM) with Ward hierarchical clustering to uncover latent structures of digital development, using a balanced panel of 20 indicators across three domains: ICT sector development, digital infrastructure, and digital technology adoption and skills. Cluster validity was assessed via the Elbow Method, Silhouette Coefficient, Calinski- Harabasz, and Davies-Bouldin indices. Results indicate that the two-cluster solution is statistically robust, while the three-cluster solution provides additional insight into transitional patterns of digital transformation. The two-cluster solution revealed a clear distinction between digital leaders and less advanced economies, with the greatest disparities observed in online banking (71% vs. 29%), online purchases (68% vs. 32%), and e-government use (68% vs. 34%). The three-cluster solution provided further nuance, showing that in 2011 most European economies were concentrated in the weakest cluster, while only Northern Europe achieved high levels of digitalization. By 2020, all European countries had reached at least the middle cluster, reflecting a shift from strong polarization toward a more balanced distribution of digital development. Despite progress, structural gaps remain, emphasizing the need for policies that advance digital skills, encourage inclusive adoption, and build trust in online services to sustain digital transformation.