Course: European Business Environment

Professor: Dr. Sziebig Orsolya Johanna

& Dr. Tabajdi Gabriella

Name: Siekleng SAM

Username: U2XGQA

Homework 5:

1. What is the content of the so-called GERD indicator and which sectors contribute to
it? What is their contribution rate compared to each other if we check the EU’s
average performance?

 The so-called GERD stands for gross domestic expenditure on research and experimental
development. It was used for measuring the total expenditure on R&D activities within a
state. It usually indicator of a state’s commitment into the innovation and the technology
advancement.
 The sector that contributes to it including business, enterprises, education, government,
and private non-profit organization.
 The exact contribution rates can vary from country to country within the EU. However,
on average, the business enterprise sector tends to contribute around two-thirds of the
total GERD, with the higher education sector contributing around one-fifth. The
government sector usually contributes around one-tenth, while private non-profit
organizations contribute a smaller share. On the other hand, it is also depending on the
country's specific policies, funding allocations, and research priorities.

2. Please explain why the higher DESI rank is better for a country.

➢ DESI stands for the digital economy and society index which was composed by the
European commission in order to measure the digital performance and the progress of EU
member states. Therefore, the better rank for DESI indicates a better digital performance
and readiness of the country including connectivity, human capital or digital skill, use of
internet by citizen, integration of technology, digital public services, and R&D ICT.
➢ A higher DESI rank indicates that a country is more digitally competitive compared to
others. It implies that the country has better digital infrastructure, digital skills, and digital
public services, which can enhance its competitiveness in the global digital economy.
➢ Additionally, Countries with higher DESI ranks are often associated with higher levels of
economic growth and innovation. Digital technologies and advancements are key drivers
of productivity, efficiency, and innovation in various sectors. Therefore, a higher DESI
rank suggests that a country is more likely to experience economic growth and
technological innovation. Therefore, a higher DESI rank indicates that a country is better
prepared for the challenges and opportunities of the future digital economy

3. Please find EU member states that could improve their performance regarding
DESI and others that were slower in development than others (their ranking
worsened).

❖ According to The Digital Economy and Society Index (DESI) in 2022 show that the top 5
countries that have the best performance are Finland, Denmark, Netherlands, Sweden,
Ireland, and Malta. On the other hand, the countries that slower in development than
other including Romania, Bulgaria, Estonia, Poland, and Slovakia. For the slower
development countries, the government should invest in expending high-speed broad
band network, digital literacy programs, promoting digital public service and integration;
especially rural and underserved areas. It is also important to engage the private sector
investment and promoting competition in telecommunications sector that help to improve
connectivity.

4. Please collect some points on how labor market regulations can contribute to
technological development.

➢ Labor market regulations play a significant role in shaping the dynamics of technological
development. Here are some points on how labor market regulations can contribute to
technological development:

o labor market regulations that encourage continuous skills development can contribute to
technological development. These regulations can include provisions for training and
upskilling programs, promoting lifelong learning, and facilitating collaboration between
educational institutions and businesses.
o labor market regulations that promote flexibility, such as flexible working arrangements
and contracts, can facilitate technological development. Flexibility allows companies to
 adapt to changing technological needs, experiment with new technologies, and allocate
resources efficiently.
o collaboration and Knowledge Sharing: Labor market regulations that foster collaboration
and knowledge sharing among companies, research institutions, and workers can
contribute to technological development.
o entrepreneurship and Startups: Labor market regulations that encourage entrepreneurship
and support startups can drive technological development. These regulations can include
provisions for easier business registration, access to funding and venture capital, and
supportive regulatory environments that promote innovation and risk-taking.
o labor market regulations that provide adequate labor protection and social security can
indirectly contribute to technological development. When workers have job security, fair
wages, and social benefits, they are more likely to invest in their own skills development
and take risks in adopting new technologies.