219 Parameters for Estimate the Digital National Economy in the EAEU Member Countries* Hristo Krachunov 1 [0000-0002-7044-9642], Tatiyana G. Sheremet 2 [0000-0002-5624-8334] 1 Technical University of Varna, Studentska 1, Varna, 9010, Bulgaria 2 Donetsk National University of Economics and Trade named after Mikhail Tugan-Bara- novsky, Shchorsa, 31, 83050 Donetsk, Ukraine tsher812@gmail.com Abstract. This paper corroborates the role and importance of the ICT sector and connected industries in the creation of added value, the development of repro- duction processes in EAEU member countries, and the global economic system. The digital economy, as a result of the development of ICT sectors in the EAEU, is built on cross-border social-economic processes. Therefore, the authors em- phasize that for the successful and even development of national economies, the EAEU states will need the consistency of national digital programs. This will speed up the convergence processes in the EAEU, create an active environment for the implementation of joint projects, and lead to a multiplier effect of obtain- ing benefits. The modern period of development of regional integration processes is characterized by going beyond the frame of separate industries, crossing and establishing new opportunities for building services for consumers and busi- nesses through digital technologies. The main condition for the success of these processes is the unification or compatibility of digital standards, principles, and rules and the formation of a common culture of digital consortia of the EAEU. This paper draws attention to the lack of estimate digital economy parameters in the methodology for the general assessment of the integration processes devel- opment level within the EAEU. The comparative characteristic of the digital economy definitions which makes it possible to single out its main components and, as a result, highlight the assessing parameters of the level digital economy development has been provided in this paper. The authors present a critical anal- ysis of indicators that allow assessing the level of the national digital economies development as one of the significant elements of the convergence of the EAEU member states; a list of parameters for comparing and the estimate of the EAEU member states national digital economics is determined as an element of as- sessing method the level of the EAEU countries integration in general. This paper substantiates the need to group the assessing parameters of the digital economy following the main areas of implementation of the EAEU Digital Agenda until 2025, and to form a methodology of their determination and computation in * Copyright 2021 for this paper by its authors. Use permitted under Creative Commons License Attribution 4.0 International (CC BY 4.0). 220 agreement with the international standards of the International Telecommunica- tion Union and the European Commission. Keywords: Digital Economy, Digital Economy Estimate Parameters, the Level of EAEU Integration, Assessing Indicators of the EAEU, ITU, EU Digital Econ- omy. 1 Introduction Regional integration within the framework of the Eurasian Economic Union (EAEU), based on the unification and interpenetration of various mechanisms of the national economic functioning is a dynamic socio-economic process. It requires regular moni- toring of both the state and development trends of its key economic parameters. Digital transformation, being a new way of the economic development model as well as a sig- nificant global trend of virtualization of the cross-border movement of goods, capital, labor, is seen as one of the key tasks of the Eurasian Economic Union in the process of the digital economy building. These tasks are reflected in the decision of the Supreme Eurasian Economic Council No. 12 of 10/11/2017, "Main directions for the implemen- tation of the digital agenda of the Eurasian Economic Union until 2025." The main tasks of the EAEU digital agenda are determined by the digitalization pro- cesses of the leading economic sectors in the global economic system. So, the telecom- munication sector plays an important role in the global economy, with global retail telecommunication revenues reaching USD 1.7 trillion in 2016, representing 2.3 per- cent of global GDP. At the regional level, the importance of the sector in driving eco- nomic growth is noticeable, especially in the developing world. Telecommunication revenues in 2016 represented on average 3 percent of GDP in Africa and the Arab States, compared to 2 percent in Asia and the Pacific and the Americas (excluding the United States and Canada), and less than 2 percent in the CIS and Europe. [1] In this regard, the need to take into account an element of the level of digitalization of the economy in the process of monitoring the state of parameters and development of the trends of the integration group as a whole is being actualized. The purpose of this paper is to determine the parameters that will allow a compre- hensive assessment of the level of mutual integration of the EAEU member countries taking into account the indicators of the digital economy. 2 The concept of the digital economy as an economic category Monitoring of the integration group should include observation, assessment, and fore- cast of changes in the studied parameters. It is important that these parameters reflect both the content of the complex state of the economy of the integration grouping of member countries in all areas of their interaction and taking into account modern global trends of digital transformation. The category of the digital economy is a reflection of these modern trends and challenges should be presented for monitoring by appropriate parameters which directly depends on the very definition of this category (Table 1). 221 Table 1. Definitions of the digital economy applied by international government organizations (IGOs) Definitions Title of the The main components of the digital IGO / Au- economy according to the definition thors That part of economic output is derived OECD, 1) fundamental innovations, core tech- solely or primarily from digital technolo- UNCTAD / nologies, and enabling infrastructures; gies with a business model based on dig- R. Bukht, R. 2) digital and information technology ital goods or services. [3, 5] Heeks (IT) sectors, digital platforms, mobile ap- plications, and payment services which are making a growing contribution to economies, as well as enabling potential spillover effects to other sectors; 3) sectors of the economy, business mod- els with digital support; digitized sectors which includes digital products and ser- vices (e.g. for e-commerce). [ 5] The share of total economic output is de- E. Brynjolfs- 1) digital skills, rived from several broad “digital” inputs. son, B. Ka- 2) digital equipment (hardware, software, These digital inputs include digital skills, hin. and communications equipment), digital equipment (hardware, software, 3) the intermediate digital goods and ser- and communications equipment), and the vices used in production. [5] intermediate digital goods and services used in production. Such broad measures reflect the foundations of the digital economy. [4, 5] Economic activity based on digital pro- EAEU 1) the environment of digital innovation, cesses, models, technologies, digital digitized assets, digital platforms and goods (services), incl. produced by elec- ecosystems, digital models and data; tronic business. [6] 2) digital components of industries and cross-industry digitalization, digital mar- kets; 3) digital management processes and in- tegration processes, project implementa- tion, interstate services; 4) digital infrastructure and means of pro- tecting digital processes [7] All the summarized definitions (Table 1) reflect the applicability of digital technologies in economic transactions and the digital economy is presented as an inseparable part of either the economy as a whole or the mechanism of its functioning. The definitions adopted by UNCTAD and the EAEU (Table 1) are formulated with an emphasis on the process of creating and generating added value, which, in turn, is the potential or re- source for the functioning of the digital economy and changes occurring in it. As for the definition of E. Brynjolfsson and B. Kahin (Table 1), the emphasis is directly on the results of the digital economy. All of the above-listed specifics of definitions are important for the formation of the types of necessary policies to create the conditions 222 of the regulation and support the development of digitalization of the economy as an element of transformation into a more progressive economic order. There is currently a lack of an internationally agreed definition of the digital econ- omy and standardized methodologies for measuring it. This is because the valuation of this economy should be based on national and sectoral statistics, taking into account the wide coverage of digitalization data and the scale of the digital and national economy as a whole. Such an assessment requires a systematic analysis of many digital parame- ters and associated variables. The speed of implementation of such parameters and the standardization of assessment methods are inferior to the rapid development and global consequences of the digitalization of the economy. Also, a significant reason for the absence at this stage of generally accepted metrics and definitions for digital economies is the unevenness in the levels of digitization of national economies of different coun- tries of the world. Namely, the list and quality of parameterization of the digital econ- omy and indicators for monitoring it, either as part of the national economy or as part of the aggregate economic space of an integration group, depend on this level. One of the tools for monitoring and assessing regional integration processes in the EAEU space is the official system of indicators of Eurasian integration (SIEI), devel- oped by the Eurasian Development Bank (EDB). Considering the official EDB meth- odology for estimating the economic integration of the EAEU member states, it should be noted that the essence of this methodology consists in a quantitative analysis of both short, medium, and long-term trends and dynamics and vectors of Eurasian regional integration based on specific indicators. The calculation of integration indicators is based on data from national and international statistical services, and the entire analysis is based on a study of the interaction of countries, from macroeconomic policy to aca- demic mobility. The SIEI EDB includes two blocks of indicators that correspond with the main as- pects of regional interaction [8]: 1. market integration (indices of mutual trade; migration; mutual investment, electric- ity; agriculture; education); 2. the convergence of economic systems (indices of macroeconomic, financial, fiscal, monetary policies). The calculation of generalized indices is carried out to assess the overall vision of regional integration processes in the post-Soviet space. The above list does not include the parameters of the level of development of the digital economy of the EAEU integration grouping, although the official reports of the EAEU Economic Commission [7] note that the potential economic effect of the implementa- tion of the digital agenda will increase the total GDP of the EAEU by 2025 by about 11% of the total expected growth. According to the commission's calculations, it will almost double the digital development of the EAEU member states, and the implemen- tation of a joint digital agenda may become a potential for the EAEU countries to in- crease employment in the ICT industry by 66.4% and increase total employment by 2.46%, and additional growth in export of the ICT services up to 74%. The absence of a list of variables in the system of indicators of the Eurasian integra- tion of the SIEI, reflecting the development of the digital economy in the EAEU mem- ber states, is explained by the almost complete incomparability of data on the state of 223 the national digital economies of these countries [9]. As a consequence, it does not allow a full assessment of the level of digital convergence of member countries. So, as of February 2019, the Russian Federation (RF) and the Republic of Belarus (RB) have the largest number of indicators reflecting the level of digitalization of the economy: 115 and 43 indicators, respectively. Kazakhstan and Kyrgyzstan have only 5 indicators in statistical reporting. The level of digitalization in Armenia cannot be esti- mated due to the lack of data in Russian or English. The indicators of the digital econ- omies of the Republic of Belarus and the Russian Federation reflect the level of ICT use by households and organizations; the availability of electronic government services; infrastructural electronic security; electronic economic environment and resource po- tential for further development of the digital economy. The statistics of Kazakhstan and Kyrgyzstan make it possible to assess only the level of ICT provision of the population. [2] Only three digital economy indicators of the entire list used in the EAEU member states can be distinguished which meet the standards of the International Telecommu- nication Union (ITU), of which these countries are members. These indicators of digi- talization of the economy include [13]: the number of organizations in the ICT sector, the number of employees in the ICT sector, and the number of organizations with a website. Belonging to one international organization obliges these countries to adopt standards approved by the ITU. Therefore it makes the standardized parameters com- parable for their cross-country assessment. The value of the indicators of the develop- ment of the EAEU member states digital economy for 2015 and 2018 which match both the ITU and the national economies of the EAEU member states are reflected in Ta- ble 2. Table 2. Values of comparable indicators of the development of the digital economy for the EAEU member countries for 2015, 2018 (of units)* RF (of a Indicators / Country RB Kazakh- Kyrgyz- thousand stan stan units) 2015: Number of ICT sector organizations 4536 4125 1140 115,2 Number of workers in the ICT sector 93276 63502 18116 1011 Number of organizations with a website 3765 2891 1478 48,96 2018: Number of ICT sector organizations 4996 4382 1192 119,5 Number of workers in the ICT sector 100655 66434 17837 1219 Number of organizations with a website 5433 3455 1734 60,83 Growth rates from 2018 to 2015,%: Number of ICT sector organizations 110,14 106,23 104,56 103,73 Number of workers in the ICT sector 107,91 104,62 98,46 120,57 Number of organizations with a website 144,30 119,51 117,32 124,23 *Compiled according to [9-12]; no data from Armenia 224 The data in Table 2 allow us to conclude that Russia occupies a leading position in terms of the development of the digital economy of the EAEU member states. In 2018, the number of organizations in the ICT sector in Russia amounted to 119.5 thousand, which is more by 25.5 organizations then average their quantity in RB and Kazakhstan. The number of employees in the ICT sector reached 1.2 million in 2018 or 20.6% growth. From 2015 to 2018, the number of organizations with a website increased from 48.9 thousand up to 60.8 thousand units in RF (an increase of 24.23% over three years). Belarus has the second rank of the development indicators of the digital economy, followed by Kazakhstan and Kyrgyzstan. Kyrgyzstan is significantly inferior to all three EAEU member countries in terms of these indicators (Table 2). In terms of the number of organizations in the ICT sector and the indicator of the number of organiza- tions with a website, the increase in Belarus for the three years under study exceeded the increase in the values of these indicators of the Russian Federation and amounted to 10.14% and 44.3%, respectively. However, the number of organizations in the ICT sector and the number of organizations with a website in the Republic of Belarus are still less than in the Russian Federation respectively by 23.9 and 11.2. There was a decrease in the number of workers in the ICT sector by 1.5% in Kyr- gyzstan during the study period. All four member countries have the highest growth rates precisely in terms of the number of organizations with a website, namely 44.3% in the RB, 24.23% in the RF, 19.51% in Kazakhstan, and 17.32 % in Kyrgyzstan. The indicators presented in Table 2 are a mandatory list of parameters for assessing the digital economy, but they are not sufficient. These are indicators that are currently used to assess the digitalization of the integration group as a whole, but they concern only to the second block of parameters of the EDB EIEI methodology (namely, the block of the convergent of the economic system). To determine a full list of estimated parameters of the digital economy, it is advisable to explore in more detail the directions of development of the digital economy that was pointed to in the Digital Agenda EAEU of the until 2025 presented in [7]. The agenda defines the general framework for the implementation of projects of interaction be- tween the Member States EAEU for the implementation of digital transformations, therefore, it allows distinguishing the parameters of the results of the digital transfor- mation necessary for monitoring. Each direction has a specific task of which could be assessed by parameters of the digital economy. So, the parameters of the digital econ- omy can be grouped according to these Digital Agenda EAEU directions, namely: 1. Digital transformation of industries and cross-industry transformation: indicators of digitalization of physical assets; the amount of added value received due to digital models, end-to-end processes and useful data; the volume of the data industry; the number of digital platforms and ecosystems; the effectiveness of the environment for digital innovation; 2. Digital transformation of markets of goods, services, capital, and labor: the volume of cross-border e-commerce; the number of intellectual property patents and digital market consumer rights; the number (volumes) of financial and technical innova- tions, joint mechanisms of risk, alternative and venture financing of digital innova- tions; labor productivity indicators, number of tell-hiring and employment; 225 3. Digital transformation of management processes and integration processes: the num- ber of created digital mechanisms for developing initiatives and implementing pro- jects; launched EAEU digital platforms based on an integrated information system, interstate services, digital ecosystems; 4. Digital infrastructure and ensuring the security of digital processes: the number of implemented networks of the latest generation that provide the functioning of the EAEU infrastructure, and systems for protecting digital processes and infrastructure. As can be seen from the list above, the ICT sector parameters are key, and they have been at the center of economic change for over two decades. The ICT sector acts as the determinant of competitive power in the knowledge economy, innovation and attracting investments, and creating new technologies that can be applied to a wide range of other sectors. Therefore, the sector of Information and Communication Technologies (ICT) plays a strategic role in the promotion of growth, innovation, and competitiveness of the national economies and is crucial for increased productivity and efficiency. 3 Parameters for assessing the digital economy by international institutions A developed ICT sector is essential for capitalizing on digitalization, keeping up with competitors in globalized markets, and establishing technological leadership in the world economic system. ICT data collection, the assessment of the digital economy parameters is important for benchmarking and monitoring developments in the ICT sector according to policymakers’ point of view, data needs being policy-driven and contextualized for national or integrative economic policy purposes. [14] A comparative analysis of the parameters of the digital economy as one of the mon- itoring objectives needs the determination of these parameters, taking into account their comparability with the metadata of the ITU and the EU member states which are both ITU members and the main competitors in the ICT sector market and other related sectors of the digital economy. Therefore, it is advisable to present the main compo- nents of metadata that experts use for regional analysis of the EU digital economy and ITU global analysis (Table 3). The digital parameters of more than 230 economies worldwide [1] are explored in the ITU reports but only common world trends of the ICT sector are made freely avail- able for the public. According to ITU, the digital economy parameters include almost 200 telecommunications / ICT statistics [1] which were presented by the fourth gener- alized group in Table 3. As can be seen in Table 3 data, both frameworks are built considering the current trends in the digital economy and focus on the following broad themes: ─ The ICT sector as a supplier of general-purpose technologies; ─ Broadband as a key infrastructure; ─ The digitization of the economy; ─ eCommerce at the core of the Digital Single Market; ─ Trust, Security, Data Protection and Privacy; 226 ─ Internet Usage by Citizens; ─ Consumption of Online Content; ─ Digital Skills and ICT Occupations; ─ Online Public Services [15]. Table 3. The Structure of the Digital Economy Indicators according to the ITU norms, the EU Metadata Indicators ITU [1] Indicators EU [14, 15, 16, 17, 18, 19] 1. The Current State of ICTs: 1). ICT usage in households and by individuals:  Connection to the internet and computer use;  Individuals use the Internet;  Internet use;  Mobile access to basic telecom-  E-commerce; munication services;  E-government ;  Fixed-broadband subscriptions;  ICT trust, security, and privacy;  range of a mobile-cellular net- work signal;  ICT usage at work;  Internet access at home;  Regional ICT statistics: Households with access to the internet at home; Households with broadband ac-  International bandwidth and In- cess; Individuals who have never used a computer; In- ternet traffic. dividuals who used the internet, frequency of use and activities; Individuals who used the internet for interac- tion with public authorities; Individuals who ordered goods or services over the internet for private use; Indi- viduals who accessed the internet away from home or work. 2).ICT usage in enterprises:  E-commerce;  Connection to the internet;  Websites and use of social media;  E-business;  ICT security; 2. ICT Skills for the Future: 3).Digital skills:  ICT users;  A breadth of skills (a technical  ICT specialists; operational, information manage- ment, social and content-creation  ICT training: Persons with ICT education by labor skills, algorithms, the prolifera- status, Employed persons with ICT education by sex, tion of bots, and a shift to the In- Employed persons with ICT education by educational, ternet of Things and Artificial In- Employed persons with ICT education by age; telligence, augment the need for critical information and advanced content-creation skills);  ITU data and other cross-na- tionally comparative data;  Survey measures. 227 Indicators ITU [1] Indicators EU [14, 15, 16, 17, 18, 19] 3. ICT Revenue and Invest- 4).ICT sector : ment Trends:  Percentage of the ICT sector in GDP;  Percentage of the ICT personnel in total employ-  Telecommunication revenues; ment;  Fixed-line revenue;  Percentage change of value added by the ICT sector  mobile revenues; at current prices;  The infrastructure investments  Business expenditure on R&D (BERD) in the ICT of the ICT sector; sector as % of total R&D expenditure by NACE Rev. 2  The transformation of the busi- activity ; ness models (the Internet  R&D personnel in the ICT sector as % of total R&D  Internet of Things (IoT), ma- personnel by NACE Rev. 2 activity; chine-to-machine (M2M) commu-  Annual enterprise statistics for special aggregates of nications, Artificial Intelligence, activities; big data analytics (BDA), and  Business demography by legal form (from 2004 on- Blockchain). wards, NACE Rev. 2);  Employer business demography by legal form (from 2004 onwards, NACE Rev. 2);  Employer business demography by size class;  Business demography by size class;  Indicators with growth by 20% or more;  Cross-classification of fixed assets by industry and by asset; 4. ICT Price Trends: 5). Digital economy and society - historical data:  ICT usage in households and by individuals (Individ-  Information and communica- uals - use of cloud computing services; Individuals - mo- tion technology (ICT) prices; bile use of the internet (Individuals - places of computer  Mobile-cellular prices; use, Consumers' behavior related to online purchases,  The price of a handset-based the most recent training course on computer use, Rea- mobile-broadband basket includ- sons for not having taken a computer course)); ing 500 MB per month;  Benchmarking indicators 2011-2015: (Benchmark-  the computer-based mobile- ing digital Europe: key performance indicators (Digital broadband prices in the gross na- single market - promoting e-commerce for individuals, tional income (GNI) per capita Digital single market - promoting e-commerce for busi- (p.c.); nesses, Digital inclusion – individuals, Public services  The prices of an entry-level – individuals); Benchmarking digital Europe: 2011- fixed-broadband. 2015 indicators ( Broadband and connectivity; ICT us- age by individuals; ICT usage by enterprises; E-public services (Individuals using the internet for interacting with public authorities, Enterprises using the internet for interacting with public authorities))). The comparison of indicators for digital economy assessing according to ITU and EU standards in Table 3 showed a lack of identity regarding definitions of key variables, the scope of coverage, methodology for collecting and calculating metadata. So, for example, the variables of the first group "The Current State of ICTs" according to the ITU assessment methodology are presented less extensively against EU standards which are divided into two groups including ICT usage in households, by individuals, and ICT usage in enterprises. The remaining groups of EU indicators are also more widely represented. This is because, on the 6th of May 2015, the European Commission 228 unveiled its renewed Strategy for the creation of a Digital Single Market2. It envisages the free movement of goods and services without barriers in the offline as well as the online world, offering the same level of consumer protection. The Digital Single Mar- ket Strategy is based on three pillars [15]: a) Better access for consumers and businesses to online goods and services across Europe; b) Creating the right conditions for digital networks and services to flourish; c) Maximising the growth potential of the European Digital Economy. The forthcoming actions under the three pillars will jointly address several issues to enable better access to goods and services, as well as content online. Assessment and removal of barriers to online trade, such as unjustified geo-blocking, stepped-up en- forcement of consumer protection laws, and simplification of the application of VAT regimes are some of the actions proposed. Legislative reviews to reflect the develop- ments in the telecommunications and media sectors will be undertaken to ensure access to networks, fair competition, and a safe online environment. With the Digital Single Market Strategy, the European Commission acknowledges the "high demand from pol- icymakers for reliable evidence to support better decision-making, monitor policy im- plementation, as well as to measure new economic and social phenomena". [15, 17] EU digital standardization aims to improve the quality of the data and analysis needed to underpin the Digital Single Market by pooling the relevant knowledge, mak- ing it easily accessible to the public and consequently expanding the scope of research on the application of the ICT sector and its impact on the creation of added value. The results of evaluating the data in Table 3 also mean that building a common sys- tem for assessing the EAEU digital economy only in accordance to the development directions of the digital economy of the EAEU Digital Agenda will not lead to suffi- ciently effective inform content. This is since if it does not take into account the meth- odological experience of collecting and calculating metadata on the state of the digital economy of the main competitors, then digital estimated parameters will be able to compare indicators only for the EAEU member states. Although this is a fairly large market of the ICT sector with a significant reproduction scale, it does not reflect the possibility of realizing the full potential of the EAEU digital economy. Therefore, it is advisable to develop a methodology for assessing the digital economy of the EAEU taking into account the methods and norms of the EU. This expediency is also main- tained by the fact that the European Commission already has a working system which is represented by an extended list of evaluation criteria, includes a methodology for their calculation and comparison for various countries of integration, and takes into account the standards of the international community within the ITU. Given the focus on value creation and capture in the EU list of the digital economy parameters, the emphasis is given to the processes and changes in the digital (or overall) economy, rather than to the outcomes of activities. This has implications for the types of policies needed concerning how the digital economy operates and less on the requisite condi- tions for the emergence of such an economy. It is necessary to focus on broader trends, such as platformization, digital data, and e-commerce [14]. This will enable an analysis 229 of changes in the digital economy while acknowledging that such changes might hap- pen in different ways. 4 Conclusions The definitions of the digital economy which are used in the OECD, UNCTAD, EAEU have similar contents and highlight the basic structural elements of economic activity, resources for obtaining added value, and the number of broad “digital” inputs. Currently, the assessment of the level of integration of the EAEU member states according to the official EBR methodology, taking into account the parameters of the digital economy, is possible only by three indicators: 1. The number of organizations in the ICT sector, 2. The number of organizations with a website, 3. The number of employees in the ICT sector. The list of parameters that allow for a comprehensive assessment of the level of inte- gration of the EAEU member states, taking into account the indicators of the digital economy, is advisable to form following the main directions of the digital transfor- mation of the EAEU economic space, namely, grouping parameters into indicators: digital transformation of economic sectors and cross-sectoral transformation; the digital transformation of markets for goods, services, capital, and labor resources; the digital transformation of management processes and integration processes; digital infrastruc- ture and ensuring the security of digital processes. 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