Digital transformation as a tool for creating an inclusive economy in Ukraine during wartime
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DOIhttp://dx.doi.org/10.21511/ppm.22(3).2024.34
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Article InfoVolume 22 2024, Issue #3, pp. 440-457
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The russian aggression against Ukraine underscores the need to reassess regional strategies for digitalization and inclusivity. The study aims to identify strategies for enhancing these areas during wartime. Taxonomy and cluster and factor analysis methods have shown that regions with a higher level of digitalization have lower levels of poverty and unemployment. Specifically, regions in the top quartile of the digitalization index reported, on average, 12% lower unemployment rates compared to those in the bottom quartile. The analysis identifies distinct regional groupings: areas such as Zaporizhzhia, Kherson, Donetsk, and Luhansk are partially occupied and exhibiting low digitalization and inclusivity, in contrast with Mykolaiv and Kirovohrad that show moderate progress. Rural regions face a significant digital divide, with only 60% of rural households having stable internet access compared to 90% in urban areas. Factor analysis confirms that wartime conditions have accelerated digital transformation, evidenced by a 42% increase in Diia app usage from 2021 to 2023 and a rise in internet penetration from 62% in 2019 to 78% in 2023. Additionally, IT sector export revenues grew by 20% in 2022, and technology startups doubled between 2019 and 2023. The study proposes a strategic framework for regional adaptation: intensive digitalization and inclusivity for Zaporizhzhia, Kherson, Donetsk, and Luhansk regions; digitalization for Mykolaiv region; inclusivity for Kirovohrad and Zakarpattia regions; and balanced adaptation for Chernivtsi and Khmelnytskyi regions. Recommended measures include modernizing digital infrastructure, expanding educational opportunities, supporting startups, and aligning digital and social initiatives to foster regional resilience and development.
- Keywords
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JEL Classification (Paper profile tab)О12, O33, G28, I23
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References61
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Tables13
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Figures4
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- Figure 1. Graph of k-means of clustering of Ukrainian regions during the war based on inclusion
- Figure 2. Graph of k-means of clustering of Ukrainian regions during the war based on digitalization
- Figure 3. Comprehensive clustering of regions by digitalization and inclusion attributes
- Figure 4. Matrix of positioning of Ukrainian regions by digitalization and inclusion attributes
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- Table 1. Methodology for assessing equal inclusiveness and digital transformation of the regions of Ukraine in the minds of the crisis
- Table 2. Composition of the first cluster based on inclusion
- Table 3. Composition of the second cluster based on inclusion
- Table 4. Composition of the third cluster on the inclusion category
- Table 5. Composition of the first cluster based on digitalization
- Table 6. Composition of the second based on digitalization
- Table 7. Composition of the third cluster based on digitalization
- Table 8. Summary of clustering analysis
- Table 9. Regional adaptation principles
- Table 10. Regional strategies for digital transformation and inclusivity
- Table 11. Results of factor analysis
- Table A1. Baseline data for assessing the level of inclusiveness of Ukrainian regions during the war
- Table A2. Baseline data for assessing the level of digitalization of Ukraine’s regions during the war
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