O1 - Economic DevelopmentReturn

Composite indicators as a tool for a ranking become more and more popular, because they illustrate a comprehensive view on a phenomenon that cannot be captured by only one single indicator. Indicators for Europe 2020 are set of indicators used for monitoring targets defined by the European Commission in the Strategy of Smart, Sustainable and Inclusive Growth. The main objective of this paper is the comparison of performance of the EU Member States using the composite indicator principles. Within constructing composite indicators several steps have to be made and corresponding methods have to be chosen. There is not only one correct method how to develop a composite indicator. Of course, the choice of the methods manipulates the results. Primarily, normalisation methods, weighting schemes and aggregation formulas are fundamental but very subjective. This paper deals with two types of normalisation (z-score and min-max) and four weighting and aggregation schemes (equal weighting with linear aggregation, principal components analysis, benefit of doubt method and multi-criteria analysis). European countries ranking is provided according to the seven different scenarios.

The contribution of the "new economy" to economic growth in developing countries has so far been minimal. The "old economy" will for long be the fundamental force behind economic growth in transition economies. Nonetheless, in the longer run the "new economy" offers great potential for faster economic growth in post-socialist economies. Realizing this potential is, however, not automatic. It can be left unharnessed if there is no suitable institutional infrastructure, which would allow for adoption, diffusion, and productive use of information and communication technologies (ICT). The paper introduces a New Economy Indicator (NEI) measuring the level of preparedness of transition economies for harnessing the potential of ICT to accelerate the long-term economic growth and catching-up with developed countries. In the NEI ranking Slovenia scored the highest, followed by the Czech Republic and Hungary, Albania, Bosnia and Herzegovina, while Yugoslavia occupy the bottom of the table.