An analysis of the economic impacts of ICTs in the case of the Republic of Macedonia

What is it about?

Measuring the impact of Information and Communication Technologies (ICTs) on the economy is a major challenge and a research question standing at the forefront of economics in the past years. The paper aims at developing an alternative approach to studying the usage and impact of ICTs. For this purpose, a two-step methodology is proposed. At first, hierarchical cluster analysis (HCA) is used to provide an objective clustering of countries (Macedonia and EU-28) according to 53 indicator values/scores of the Networked Readiness Index (NRI). Furthermore, a system dynamics (SD) model is being proposed to simulate the evolution of the NRI indicator values for the Republic of Macedonia.

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Why is it important?

The generality of the proposed system dynamics (SD) simulation model allows for examining the potential of an arbitrary country (in this case, the Republic of Macedonia) to improve its rankings on a global scale and thus, become better at leveraging ICTs for increased competitiveness and well-being. The proposed methodology can serve as a useful guide for those attributes the Republic of Macedonia should focus on in order to improve its position relative to other countries, i.e. to move from its current to the next higher cluster.