=Paper=
{{Paper
|id=Vol-3608/paper3
|storemode=property
|title=The Role of the EU in the Development of E-business in the Eastern Partnership Countries
|pdfUrl=https://ceur-ws.org/Vol-3608/paper3.pdf
|volume=Vol-3608
|authors=Oleh Tsebenko,Olha Ivasechko,Yaryna Turchyn,Roman Holoschuk
|dblpUrl=https://dblp.org/rec/conf/scia2/TsebenkoITH23
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==The Role of the EU in the Development of E-business in the Eastern Partnership Countries==
https://ceur-ws.org/Vol-3608/paper3.pdf
The Role of the EU in the Development of E-Business in the
Eastern Partnership Countries
Oleh Tsebenko, Olha Ivasechko, Yaryna Turchyn and Roman Holoshchuk
Lviv Polytechnic National University, 12, Stepan Bandera str., Lviv, 79013, Ukraine
Abstract
The article analyzes the influence of the EU on the development of the e-business system in
the Eastern Partnership countries. The key challenges and threats to the Eastern Partnership
countries in the field of e-business development are analyzed. The main instruments of EU
influence on e-business development in Eastern Partnership countries are studied. The schemes
of external and internal factors affecting the future digitalization of the Eastern Partnership
countries in the sphere of E-business have been presented. The level of digitalization of the
economic sphere in the Eastern Partnership countries has been analyzed according to various
global indices of digital transformations. The main threats to the e-business implementation in
the countries of the region are identified. Recommendations for improving cooperation
between the EU and Eastern Partnership countries in the e-business sphere have been
presented. A forecast of the prospects of the e-business development of the Eastern Partnership
countries has been made.
Keywords 1
E-business, EU digital market, Eastern partnership, digitalization
1. Introduction
Globalization and the scientific and technological revolution have brought about significant changes
in the functioning of any sphere of public life. One of them is digitalization, without which it is now
difficult to imagine the normal functioning of any sector of the economy. The economy and business
sector is a key area of the EU's integration policy. Digitalization is a priority both for the EU's internal
market and for cooperation with neighbouring countries.
Today, digital technologies have covered almost all areas of social life, including the economy. Most
countries around the world are committed to free trade. This can only be ensured if digital technologies
are introduced into economic relations, which will make corruption impossible and speed up trade with
other countries. The EU is a leading institution in the development of e-business and digitalization. The
EaP countries and their economic and digital development are an important objective of the EU's
Eastern Policy. An important task for EU is to build a sustainable e-business system in the EaP
countries, to develop a common strategy for overcoming challenges and threats, mainly in the field of
cybersecurity.
The EU, as a global economic leader, is trying to cooperate closely with countries around the world
in economic matters and form joint free trade areas. Taking into account the conceptual framework of
the EU Digital Compass and the EU Digital Strategy, its policy is aimed at full digital integration of all
member states. Through its Eastern Partnership Initiative, the EU aims to integrate the digital market
of the EaP countries into the European one. The EU uses a number of initiatives, finances digitalization
SCIA-2023: 2st International Workshop on Social Communication and Information Activity in Digital Humanities, November 9, 2023,
Lviv, Ukraine
EMAIL: oleh.o.tsebenko@lpnu.ua (O. Tsebenko); olha.y.ivasechko@lpnu.ua (О. Ivasechko); yaryna.b.turchyn@lpnu.ua (Y. Turchyn);
roman.o.holoshchuk@lpnu.ua (R. Holoshchuk).
ORCID: 0000-0002-0024-0405 (O. Tsebenko); 0000-0003-2141-3309 (О. Ivasechko); 0000-0002-9114-1911 (Y. Turchyn); 0000-0002-
1811-3025 (R. Holoshchuk).
©️ 2023 Copyright for this paper by its authors.
Use permitted under Creative Commons License Attribution 4.0 International (CC BY 4.0).
CEUR Workshop Proceedings (CEUR-WS.org)
CEUR
ceur-ws.org
Workshop ISSN 1613-0073
Proceedings
programmes, and provides technological support to the EaP countries in developing the digital
economy. The study of the specifics of EU policy on e-business development in the Eastern Partnership
countries is an important task for national science.
2. Related Works
In order to study the EU's influence on the development of e-business in the Eastern Partnership
countries, we analysed a number of sources of information that served as the theoretical and practical
basis for this article.
The first group of sources includes data from global indices that characterise the state of digital
technologies development and innovations in the EaP countries. We have analysed the E-government
development Index, Global Innovation Index, and Multidimensional Index of Digitisation[3; 9; 30].
The next group of sources for our research were scientific articles analysing the specifics of the
development of the digital market and the e-business market in the Eastern Partnership countries. The
main aspects of the EU influence in the field of digitalisation on the Eastern Partnership countries were
highlighted in the work of O. Tsebenko, O. Ivasechko, Ya. Turchyn and R. Holoschuk [24]. The level
of digitalisation of Eastern Partnership countries is analysed in the paper written by T. Akhvlediani
[29]. Researchers have explored the peculiarities of e-business development in the EU, including
scholars such as O. Hillel [22], O. Mazurenko [3], J. Jędrzejczak-Gas, A. Barska, M. Siničáková [17].
The third group of sources for our study was EU law governing digital policy and digitalisation. In
particular, we analysed the Digital Single Market Strategy for Europe, EU Digital Compass [2; 21].
The fourth group of information for this study was the data from the EU4Digital and EU4Business
initiatives, which are actually one of the key instruments of the EU's influence on the Eastern
Partnership countries to develop E-Business [11; 13].
We also studied the websites of the EU's Eastern Partnership Initiative, the European Commission,
and the OECD, which allowed us to analyse the EU's instruments for developing E-Business in the EaP
countries. Another source was analytical reports and articles in the media [1; 2; 4; 10; 14; 21; 22; 27;
28; 32].
To sum up, we can say that there are no comprehensive works that study the EU's impact on the
development of E-business in the Eastern Partnership countries.
3. Proposed methodology
In order to comprehensively analyse the topic of the study, we used a number of scientific methods
and research methodologies. The method of information analysis helped to identify the specifics of e-
business development in the Eastern Partnership countries. The method of comparison helped to
compare the level of digital technologies development in different EaP countries. The synthesis method
helped to draw conclusions and provide recommendations for improving the development of the digital
economy in the region. The analysis of digitalization indices helped to determine the degree of digital
technologies development in the EaP countries. The prognostic method helped to identify the prospects
for harmonization of the EU and EaP countries' markets in the field of e-business. The systemic method
helped to analyze the specifics of the relationship between the EU and the EaP countries in the field of
digitalization and e-business. The structural-functional method helped to identify the mechanisms of
EU influence on the development of e-business in the EaP countries.
The methodological basis of the study was an analysis of the country's position in global
digitalization indices. We considered the Global Innovation Index (analyzing the level of
implementation of innovative and digital technologies), the E-government development Index
(analyzing the degree of e-government development and digital technologies), and the
Multidimensional Index of Digitisation (analyzing the degree of implementation of digital
technologies) [3; 9; 30].
Another methodological basis in our study was the construction of structural and logical schemes
and programmes that helped us to comprehensively analyze EU instruments in supporting e-business
development in the Eastern Partnership countries. In particular, we have built the following: 1) Diagram
of analysis of the EU influence on Eastern Partnership countries E-business development (a sequential
analysis of systemic changes in EU policy to achieve success in the field of E-business in the Eastern
Partnership countries. The programme helps to identify possible problems and risks, and to restart EU
policy or add new instruments); 2) Diagram of the influence of external and internal factors on the
Common EU and EaP countries E-business market (analysis of factors that influence the ultimate
success of EU policy, as well as possible scenarios for its development); 3) Sequential scheme of e-
business policy implementation in EaP countries: European integration context (the programme allows
adding new variables (instruments, policies, risks) and new players. The ultimate goal is overall
success) [developed by the authors].
The methodological basis was also based on the following categories: the EU's normative power -
spreading European values, democracy, human rights, and sustainability in domestic and foreign policy
(explains the desire for change in the EaP countries); the EU's transformative power (spreading
economic integration in the region, integrating them into European markets); the spread of free trade
policy (a key principle of the EU market, which underlies the construction of free trade areas with the
EaP countries. The main element of this policy is the development of E-business); the EU as a global
economic leader (the Union is a leading leader in economic and digital development, so its key task is
to develop economic cooperation and disseminate technologies with countries around the world) [2; 4;
5; 15; 17; 19; 24]. An important element of the EU's digital foreign policy EU's digital foreign policy
is the introduction of electronic services, such as e-governance, e-elections, e-democracy, e-commerce,
etc. [18; 22; 23; 25; 27].
4. Results
The development of digital technologies and the introduction of e-business in the Eastern Partnership
countries enable them to develop economically. The EU is a powerful player in the international arena.
The Eastern Partnership is an important region for the EU foreign policy. The EU's Eastern Partnership
Initiative was launched in 2009 to build democratic states in the region and promote their economic
development. This instrument is intended to integrate the countries of the region into European markets
and standards. The priority area is digitalization. Also in 2015, the European Commission adopted the
EU Single Digital Market Strategy, which aims to digitalize all spheres of public life and the economy
also. The European digitalization policy also extends to the neighbouring countries of the Eastern
Partnership. In 2021, the EU Digital Compass 2030 was adopted, where e-business development was
identified as one of the priorities. The EU's Neighbourhood Policy and the Eastern Partnership Initiative
aim to transform the economies of the region's countries and introduce digital technologies. Intensive
cooperation between the EaP countries and the EU in the field of digitalization and e-business enables
them to develop economically, improve competitiveness, integrate into the EU digital market, ensure
transparency of economic operations and technological development. A comprehensive analysis of the
EU's impact on e-business development in the Eastern Partnership countries will help identify key areas
of cooperation, potential risks, identify strengths and weaknesses and draw conclusions about the
prospects for further digital integration [1; 2; 7; 16; 19; 20; 26].
The priority areas of cooperation between the EU and the countries of the Eastern Partnership
in the E-business sphere are: 1. E-Economy development; 2. Cybersecurity of E-commerce
operations; 3. Consumer data protection; 4. Development of online trade platforms; 5. Implementing
payment system; 6. Improving digital system; 7. Digitalization of SME’s; 8. Legal Framework of E-
commerce [11-13; 16; 24; 25; 31; 27].
The key mechanisms for the implementation of the EU E-business Policy in the Eastern
Partnership countries are: 1. The EU Eastern Partnership Initiative; 2. EU4Business Program; 3.
EU4Digital Program; 4. Thematic Panel Harmonization of Digital Markets, HDM within the framework
of the activities of Platform No. 2 “Economic integration and rapprochement with EU politicians”; 5.
EU financial and technology support to EaP countries; 6. Multilateral and Bilateral forms of cooperation
between EU and EaP countries; 7. EU Digital Single Market Strategy; 8. Technology exchange; 9.
Economy and Digital reforms; 10. EU Free economy policy [1; 2; 4; 10; 11; 14; 17; 19; 20; 24; 32].
To analyse the prospects of E-business development in the Eastern Partnership countries, we used
structural and logical diagrams (Fig. 1; Fig. 2; Fig. 3), which allowed us to identify the factors and EU
instruments that influence its development and possible scenarios for their development.
Figure 1: Diagram of analysis of the EU influence on Eastern Partnership countries E-business
development [developed by the authors]
Figure 2: The influence of external and internal factors on the Common EU and EaP countries E-
business market [developed by the authors].
In order to analyze the degree of digitalization, E-business development of the Eastern Partnership
countries, we studied global development indices, in particular the Global Innovation Index, E-
government development Index and Multidimensional Index of Digitization.
The data analysis of the Global Innovation Index (Fig. 4) indicates the degree of the innovation
technologies implementation in the country. According to the analysis of the data in Fig. 4, we can
conclude that the most developed innovative countries are Republic of Moldova and Ukraine. The
indicators are approximately the same in all other countries of the Eastern Partnership – Armenia,
Belarus, and Georgia. Azerbaijan is a country with a low level of innovation.
Figure 3. Sequential scheme of e-business policy implementation in EaP countries: European
integration context [developed by the authors].
In general, the degree of development of the Innovations (including E-business sphere) is observed
at approximately the same level among all countries of the Eastern Partnership, which have middle
positions of indicators compared to other countries of the world. EaP countries need more innovations
reforms, which could be given by the EU [30].
Global Innovation Index 2022 ranking
35
30
25
20
15
10
5
0
Republic of Ukraine Belarus Armenia Georgia Azerbaijan
Moldova
Figure 4: Global Innovation Index 2022 ranking [30]
The analysis of the E-government development Index indicates the degree of implementation of
innovative digital technologies in the national economy and government. The data analysis (Fig. 5)
indicates that Ukraine was the leader in the introduction of the innovations in 2022. The positions are
approximately the same in Belarus, Georgia, the Republic of Moldova and Armenia. The situation in
Azerbaijan is somewhat worse. In the overall rating, the countries of the Eastern Partnership occupy
positions from 49th (Ukraine) to 80th (Azerbaijan), which indicates an average level of innovation
development in the countries of the region [9].
E-government development Index (2022)
Ukraine
Moldova
Georgia
Belarus
Armenia
Azerbaijan
0,62 0,64 0,66 0,68 0,7 0,72 0,74 0,76 0,78 0,8 0,82
Figure 5: E-government development Index, 2022[9]
The goal of the Multidimensional Index of Digitalization aims to capture the global evolution of
digitization. According to the analysis of data (Fig. 6), Azerbaijan is the leader in this indicator, and
Ukraine and Republic of Moldova are in last place. In general, all countries of the Eastern Partnership
have approximately the same indicator of digitization, which is in a middle position in the world. All
Eap countries need to implement more reforms [3].
Multidimentional Index of Digitization, 2022
0,7
0,6
0,5
0,4
0,3
0,2
0,1
0
Republic of Ukraine Armenia Georgia Azerbaijan
Moldova
Figure 6: Multidimensional Index of Digitization, 2022 [3]
Threats to the implementation of the EU policy in the Eastern Partnership countries in the
sphere of E-business are: 1) Low level of economic development; 2) Large number of cyberattacks
on digital infrastructure, mainly from Russia; 3) Problems with the development of digital infrastructure
in the EaP countries; 4) Political instability, wars, conflicts in the EaP countries; 5) Lack of an adequate
level of digital technologies in the countries of the region; 6) Unwillingness of some countries to
implement reforms proposed by the EU; 7) Outdated digital technologies; 8) Personal data protection
issues; 9) Low level of trust in online commerce; 10) High level of crime in online commerce; 11) Trade
barriers; 11) Lack of a single digital market in the EaP countries and the EU [6; 11; 12; 13; 16; 20; 23;
24; 27; 29].
The effects of the EU and Eastern Partnership E-business cooperation. Possitive: 1) EaP
countries economic development; 2) EU-EaP countries economic integration; 3) EaP countries
integration to EU; 4) Increasing of EaP countries GDP; 5) EU-EaP countries common E-business single
market; 6) EaP countries free economy; 7) EaP countries digital transformation; 8) Increasing of
export/import operation between EU and EaP countries; 9) Investments to EaP countries; SME’s
development. Negative: 1) Disintegration of EaP countries; 2) Problems with national producers who
do not have digital technologies; 3) Weak competitiveness of national producers with European ones
[6; 11; 12; 13; 22; 24; 27; 31].
Recommendations for strengthening of E-business development in the Eastern Partnership
countries: 1. Increasing the financial and technical assistance from the EU; 2. EU support for
cybersecurity of electronic transactions; 3. Strengthening the protection of personal data; 4. EaP
countries Internal reforms in the fields of e-governance, e-economy, e-commerce; 5. Development of
E-business online trade platforms; 6. Extension of the free trade area to all EaP countries; 7. Integration
to EU digital market; 8. Development and adoption of national legislation in the field of E-business; 9.
Implementation of the European digital course and standards [6; 8; 11; 12; 16; 19; 20; 24; 25; 27;
29; 31].
5. Conclusion
In summary, the EU plays a key role in the process of economic and digital transformation in the
Eastern Partnership countries. According to the EU's Digital Single Market policy and EU Digital
Compass 2030, the development of digitalisation is a priority for the coming years. The EU aims to
develop digital technologies and the digital economy in the framework of bilateral and multilateral
cooperation with the EaP countries. The priority areas of cooperation are: E-Economy development;
Cybersecurity of e-commerce operations; Consumer data protection; Development of online trade
platforms; Implementing payment system; Improving digital system; Digitalization of SME’s; Legal
Framework of e-commerce. The key mechanisms for the implementation of the EU E-business Policy
in the Eastern Partnership countries are: The EU Eastern Partnership Initiative; EU4Business Program;
EU4Digital Program; Thematic Panel Harmonization of Digital Markets, HDM within the framework
of the activities of Platform No. 2 “Economic integration and rapprochement with EU politicians”; EU
financial and technology support to EaP countries; Multilateral and Bilateral forms of cooperation
between EU and EaP countries; EU Digital Single Market Strategy; Technology exchange; Economy
and Digital reforms; EU Free economy policy. The analysis of the structural logic diagrams helped us
to determine the sequence of implementation of EU policies aimed at achieving success in e-business
development, and to identify successes and challenges in implementing such policies.
By analyzing the Global Innovation Index 2022 ranking, it was found that, in general, we observe
approximately the same level among all countries of the Eastern Partnership, which have middle
positions of indicators compared to other countries of the world. The data of the E-Government
Development Index indicates that Ukraine was the leader in the introduction of the innovations in 2022,
The situation in Azerbaijan is somewhat worse. The data of the Multidimensional Index of Digitization
indicates that in general, all countries of the Eastern Partnership have approximately the same indicator
of digitization, which is in a middle position in the world. The analysis of the three indices shows that
the EaP countries are in the middle of the pack and need to reform the digitalization sector. The EU can
serve as the main driving force behind the development of e-services and the digital economy in the
region.
The implementation of the EU's e-business policy in the Eastern Partnership countries poses certain
risks: Low level of economic development; Large number of cyberattacks on digital infrastructure,
mainly from Russia; Problems with the development of digital infrastructure in the EaP countries;
Political instability, wars, conflicts in the EaP countries; Lack of an adequate level of digital
technologies in the countries of the region; Unwillingness of some countries to implement reforms
proposed by the EU; Outdated digital technologies; Personal data protection issues; Low level of trust
in online commerce; High level of crime in online commerce; Trade barriers; Lack of a single digital
market in the EaP countries and the EU. We offer the following recommendations in order to strengthen
the integration of the countries of the region into the EU E-business market: increasing the financial
and technical assistance from the EU; EU support for cybersecurity of electronic transactions;
Strengthening the protection of personal data; EaP countries Internal reforms in the fields of e-
governance, e-economy, e-commerce; Development of E-business online trade platforms; Extension of
the free trade area to all EaP countries; Integration to EU digital market; Development and adoption of
national legislation in the field of E-business; Implementation of the European digital course and
standards.
As for the future development of the EaP countries in the e-business sector, Ukraine and the Republic
of Moldova, as candidate countries, have the best chance of integrating into the EU market in this area,
which will significantly help them develop economically. Georgia, despite its high achievements in the
digital economy, is still in a suspended status in terms of active European integration. Armenia and
Azerbaijan are closed economies, so it is unlikely that they will develop their e-economies quickly.
Belarus is unlikely to cooperate with the EU and implement digital technologies in the near future.
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