Revista
de la
Universidad
del Zulia
Fundada en 1947
por el Dr. Jesús Enrique Lossada
DEPÓSITO LEGAL ZU2020000153
Esta publicación científica en formato digital
es continuidad de la revista impresa
ISSN 0041-8811
E-ISSN 2665-0428
Ciencias
Sociales
y Arte
Año 14 N° 41
Septiembre - Diciembre 2023
Tercera Época
Maracaibo-Venezuela
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Digitalization as an Imperative of the Development of Business
Processes in the Conditions of the Intensified Global Competitiveness
Natalia Ostrovska*
Denys Krylov**
Anna Pohrebniak***
Yuliia Pereguda****
Viktor Stetsiuk*****
ABSTRACT
The article examines the peculiarities of the digital development on a global scale, its impact
on the development of business processes in the conditions of the intensified global
competitiveness. The number of Internet users in the world was analyzed, which made it
possible to outline the main global trends in the development and implementation of digital
technologies by country. The systematic approach in research makes it possible to identify
regularities and relationships, as well as to obtain the effect of synergy by considering a set
of processes and their subordination caused by external causes of influence, including
competitive trends of globalization. The opportunities that arise in companies due to the
involvement of digital technologies in business processes are outlined. Having singled out
the threats of the introduction of digital technologies into business processes, directions for
their elimination are proposed. To ensure the digitalization of business processes in the face
of the intensified global competitiveness, directions for promoting digitization at the macro
level have been identified.
KEYWORDS: Digitization, digital technologies, digital transformation, business processes,
competition, global competitiveness.
*Professor, Department of Finance and Credit, Yuriy Fedkovych Chernivtsi National University, Ukraine. ORCID:
https://orcid.org/0000-0002-7259-7403 Е-mail: n.ostrovska@chnu.edu.ua
**Associate Professor, Honored Economist of Ukraine, Department of Finance, Banking and Insurance, Zaporizhzhia
National University, Ukraine. ORCID: https://orcid.org/0000-0001-8522-5433 E-mail: krylov.denys2021@gmail.com
***Associate Professor, Department of Economics and Entrepreneurship, National Technical University of Ukraine “Igor
Sikorsky Kyiv Polytechnic Institute”, Kyiv, Ukraine. ORCID: https://orcid.org/0000-0003-2421-476X E-mail:
anna.u.pogrebnyak@gmail.com
**** Associate Professor, Department of Global Economy, National University of Bioresources and Nature Management
of Ukraine, Kyiv, Ukraine. ORCID: https://orcid.org/0000-0002-1434-2509 Е-mail: julilla.pereguda@gmail.com
*****Associate Professor, Department of Telecommunications, Media and Intellectual Technologies, Khmelnytskyi
National University, Ukraine. ORCID: https://orcid.org/0000-0003-1413-8724 Е-mail: stetsiukvi@khmnu.edu.ua
Recibido: 24/04/2023 Aceptado: 16/06/2023
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La digitalización como imperativo del desarrollo de procesos
empresariales en condiciones de intensificación de la competitividad
global
RESUMEN
El artículo examina las peculiaridades del desarrollo digital a escala global, su impacto en el
desarrollo de procesos de negocios en las condiciones de competitividad global intensificada.
Se analizó la cantidad de usuarios de Internet en el mundo, lo que permitió perfilar las
principales tendencias globales en el desarrollo e implementación de tecnologías digitales por
país. El enfoque sistemático en la investigación permite identificar regularidades y relaciones,
así como obtener el efecto de sinergia al considerar un conjunto de procesos y su
subordinación causada por causas externas de influencia, incluidas las tendencias
competitivas de la globalización. Se reseñan las oportunidades que surgen en las empresas
debido a la implicación de las tecnologías digitales en los procesos de negocio. Habiendo
señalado las amenazas de la introducción de tecnologías digitales en los procesos comerciales,
se proponen direcciones para su eliminación. Para garantizar la digitalización de los procesos
comerciales frente a la competitividad global intensificada, se han identificado lineamientos
para promover la digitalización a nivel macro.
PALABRAS CLAVE: Digitalización, tecnologías digitales, transformación digital, procesos
de negocio, competencia, competitividad global.
Introduction
The main catalyst for the transition of the world's economies to the principles of
digitalization was the desire for sustainable development of national economies and ensuring
a qualitatively new way of their transformation. Negative phenomena, such as the COVID-
19 pandemic, contributed to the accelerated transition to the use of digital business tools and
their use in public life. On a global scale, Internet trade has received wider development,
which has led to an increase in the use of digital technologies in the business process at
various levels. Therefore, today, the digitalization of business processes and their impact on
the general economic development of countries in the conditions of the intensified global
competitiveness is relevant and important.
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The concept of digitalization of the economy appeared and began to rapidly spread
into established circulation in the mid-1990s. This was facilitated by the development of the
Internet, the emergence of Internet sales sites.
It should be noted that digital technologies are becoming widespread and this affects
the digital transformation of business processes in the context of the intensified
competitiveness, which requires further research in this area, including in the direction of
research into the impact of digitalization processes on the development of business
processes.
The purpose of the article is to substantiate the processes of digitalization of business
processes in the conditions of the intensified global competitiveness, taking into account the
current trends in the spread of digital technologies in the world.
To achieve the goal, the authors set and achieved such goals as: the advantages of
digitization for companies on a global scale were highlighted, the advantages of introducing
digital technologies into the business processes of companies were outlined, as well as the
existing shortcomings of the introduction of digital technologies into business processes
were identified; on the basis of the identified shortcomings, propose directions for
eliminating the shortcomings of the implementation of digital technologies in business
processes; analyze trends in the development of the Internet and its users as a basis for further
implementation of digital technologies; directions for ensuring and tools for digitalization of
business processes are outlined in the conditions of the intensified global competitiveness at
the level of the countries’ governments.
1. Literature Review
Scientific studies of domestic and foreign scientists are devoted to the peculiarities of
the digital development on a global scale and its impact on the business processes’
development in the context of ensuring global competitiveness (Fig. 1). Articles (Djakona A.
et al., 2021; Lyeonov S. et al., 2022; Savin S. et al., 2021; Revko A. et al., 2020) are devoted to
the development of information technologies and their impact on social and economic
development. Such scientists as Grosu V. et al. (2021); Nikiforov P. et al. (2022);
Zhavoronok A. et al. (2022); Ivanova N. et al. (2022) devoted their publications to the
financial support of the business process, public-private partnership and regulatory policy in
this area. When considering the issue of innovative-investment development strategies, it is
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appropriate to mention scientific articles Khrushch N. et al. (2022); Tulchynska S. et al.
(2021, 2022); Khanin S. et al. (2021). Scientists Tkachenko T. et al. (2021); Pohrebniak A. et
al. (2021) analyze the processes of ensuring economic security for the purpose of successful
and long-term business operation in the context of the circular economy development.
The authors (Wang H. et al., 2023) investigate the impact of digitalization of business
processes on the innovative efficiency of the firm. According to the scientists, the research
will contribute to the improvement of innovation efficiency through the digitization of
business processes and contributes to the innovative development of firms in a digital
context. The purpose of article (Allal-Chérif O. et al., 2023) is to analyze the constituent
elements of successful companies, among which revolutionary strategy, social innovative
products, and digitalization of processes are highlighted. Management practices that affect
the sustainable development of business have been identified, namely: the ability to make
radical choices contrary to the most common, supposedly more profitable practices;
integration of suppliers as true long-term partners; open sustainable product innovation to
achieve excellence in simplicity and environmental activism.
Figure 1. Cartographic analysis of articles according to the title and keywords from the
specified research topic in the Scopus database (2019-2022)
Source: compiled by the authors based on the analysis of the Scopus database and using the
tools of the VOSviewer program.
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Research (Fawad Sharif S. M. et al., 2022) analyzed the role of knowledge linkage and
digitization of business processes in supporting innovation through market capitalization
flexibility in addition to downsizing strategies. The authors believe that the conducted
research establishes a mediating effect between the digitization of business processes and
innovation performance during the downsizing phase and offers significant theoretical and
practical implications. The authors (Kühne U. et al., 2022) are convinced that digitalization
is an important factor in accelerating the development of hydrogen infrastructure for
transport and mobility purposes. As the authors of the study note, the project "Modeling the
management of business processes in hydrogen technologies" is focused on two main areas:
standardization and digitization to facilitate the application process of hydrogen filling
stations.
Article (Adomako S. et al., 2021) examines the relationship between the perception of
corruption and the degree of internationalization through the digitization of business
processes. Scientists have also established a mitigating effect of the age of the company on
the correlation between the perception of corruption and the digitization of business
processes. As part of the study (Bellalouna F., 2021) of the application of augmented reality
in the industrial business environment, the possibilities of digital transformation technology
during the product life cycle were analyzed. On the basis of industrial examples, the
implementation of two AR applications and their potential for the digitization of product
life cycle processes were investigated. According to the authors (Schaarschmidt M. et al.,
2020), modern business requires companies to implement new digital processes both
internally and externally. Scientists have investigated the conditions under which the
intensity of digital business, defined as the level of strategic organizational investments in
new and innovative digital technologies, leads to a sense of obligation to the employer and
subsequently to a constructive deviation of the process.
Scholars (Zollweg C. et al., 2020) believe that successfully digitized business
processes require early, thorough and continuous integration of business users at each stage
of the transformation, while ensuring a high level of usability. In the process of research,
researchers compare different user research methods suitable for deployment in business
process transformations regarding their time costs, required resources, and the significance
of their results. In the study (Bergmann M. et al., 2020), the authors analyzed the
determinants of the use of business analytics in the budgeting process and its impact on
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satisfaction with the budgeting process. The authors found that the use of business
intelligence is positively related to satisfaction with the budgeting process, that is, the use of
business intelligence can help overcome dissatisfaction with traditional budgeting systems.
Research (Sackmann S. et al., 2018) analyzes current digitization efforts by implementing
cyber-physical systems that rely on automation and system interoperability. According to
the authors, efforts to digitize compliance require bringing together compatible technologies,
methods, and business process tools that support this lifecycle in a consolidated manner.
Taking into account the available publications from the indicated direction of
research, it should be noted that the issue of digitization as an imperative for the development
of business processes in the conditions of the intensified global competitiveness has not been
given enough attention, which confirms the relevance of further research.
2. Methodology
In order to substantiate the processes of digitalization of business processes in the
conditions of the intensified global competitiveness, taking into account the current trends
in the spread of digital technologies in the world, the authors singled out a systematic
approach as the basis of the study. This is explained by the fact that business processes
represent a certain set of processes that are interconnected with a large number of
influencing factors, including digitalization and global competitiveness. It is the systematic
approach in research that makes it possible to identify regularities and relationships, as well
as to obtain the effect of synergy by considering the set of processes and their subordination
caused by external causes of influence, including globalization competitive trends.
3. Results
Today, digitization is an integral part of all business processes, which increases their
efficiency and helps strengthen the competitive position of companies on the global market.
Digitization has significantly affected global competitiveness by changing the competitive
landscape. Digital technologies enable business structures to expand their sales markets,
attract new customers and suppliers, compete not only on the domestic market, but also on
the global market. Digitalization tools such as cloud computing, the development of e-
commerce and other digital technologies give companies the opportunity (Fig. 2):
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- enter new markets with minimal initial costs;
- ensure quick adaptation to changing operating conditions;
- increase the speed and quality of customer service;
- make more informed decisions based on the collection and processing of information
on pricing and marketing strategies;
- to simplify and establish interaction between partners and suppliers;
- to obtain competitive advantages due to the creation of new goods and services, etc.
Also, digital technologies increase the efficiency of business processes because they
provide an opportunity to simplify communication between the company and customers by
providing customers with fast and accurate information using such digital tools as chatbots,
which generally increases customer satisfaction. Other digital technologies, such as video
conferencing, online platforms, increase the efficiency of employees' work, as well as their
interaction with partners and suppliers, providing the opportunity to work and make
decisions in real time. Digital technologies make it possible to automate everyday work in
the company by digitally managing documents, production processes, stocks, while reducing
the number of possible errors, increasing the accuracy of operations and decision-making,
saving time and reducing costs.
Digitalization has provided new opportunities for developing strategies for attracting
customers based on the personalization of their services through the use of a large amount of
information, statistical data, the involvement of social media platforms, etc.
So, it can be noted that today digital technologies are used in all types of business
processes of companies, namely in the main, auxiliary and managerial business processes.
Basic business processes include processes that are directly related to the production and
sale of products or services. Such basic business processes include logistics, procurement,
sales and service.
Supporting business processes include ensuring the infrastructure and security of the
functioning of companies, legal and financial support, that is, processes aimed at ensuring
the functioning of the main processes. Management business processes include operations
that ensure management in the current period and further strategic development, namely
marketing, personnel management, innovation, sales, finance, security and other processes in
the company to ensure its development.
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Figure 2. Impact of digitalization on the development of business processes
Source: created by the authors.
But, at the same time, the introduction of digital technologies is intensifying
competitive global relations. Thus, digital technologies have provided new opportunities for
BENEFITS OF IMPLEMENTATION OF DIGITAL TECHNOLOGIES IN BUSINESS PROCESSES
expanding the sales market, attracting new customers and suppliers
increasing the speed and quality of customer service
making more informed decisions based on the collection and processing of information on pricing and marketing
strategies
ensuring quick adaptation to changing operating conditions
entering new markets with minimal initial costs
simplifying interaction between partners and suppliers
increasing competitiveness on the domestic and global market
DISADVANTAGES OF THE IMPLEMENTATION OF DIGITAL TECHNOLOGIES IN BUSINESS PROCESSES
IMPACT OF DIGITALIZATION ON THE DEVELOPMENT OF BUSINESS PROCESSES
breach of data security, danger of digital system failures
lack of highly qualified personnel
high cost of implementing digital technologies
instability and short-term competitive advantages
intensifying competition
DIRECTIONS OF ELIMINATING THE DEFECTS OF IMPLEMENTATION OF DIGITAL TECHNOLOGIES
IN BUSINESS PROCESSES
implementation of regular backup of information data to reduce the risk of their loss
investment and implementation of reliable modern security tools (firewalls, anti-virus software, encryption, etc.)
constantly implement innovations, development in the direction of compliance with the principles of Industry 4.0
development
attract investments in research and development for the timely introduction of new technologies, digital tools, creative
management solutions
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gathering and processing information about competitors, which increases competitive
pressure between competing companies on a global scale.
Digital technologies are actively developing in all countries of the world and are
increasing the level of implementation of digitalization in business processes. The
introduction of digitization is taking place at an active pace not only in the economy, but also
in social life. Thus, the number of Internet users in the world increased more than fivefold
during the period 2005-2022 (Fig. 3).
Figure 3. The number of Internet users in the world, 2005-2022 (%)
Source: summarized by the authors based on [International Union of
Telecommunication]
In different countries, different rates of growth of Internet users and introduction of
digital technologies into business processes are observed. Lower rates of bandwidth
development are observed in the USA and Canada, as digital technologies are quite developed
in these countries for this period, and therefore the rate of bandwidth growth in them will
be lower. As part of the development of economic systems, the African market today is a
dynamic, developed structure with the involvement of digital technologies, in which funds
are invested in various sectors of the economy. The increase in global Internet traffic in the
period starting from 2019 is explained by the spread of the COVID-19 pandemic, which led
to the need to physically isolate people while preserving industrial relations as much as
possible. Such restrictions had both negative and positive consequences. Thus, the
11.1 1.4 1.6 1.8 22.2 2.4 2.6 2.7 33.2 3.4 3.7
4.2
4.7 4.9 5.3
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
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development of communications during this period was also carried out as much as possible
with the help of digital technologies, which contributed to the development of business
processes of a new digital format. Taking into account the fact that the majority of trade
operations were carried out precisely with the help of Internet technologies, this also had a
certain positive effect for business structures, as it allowed to reduce the costs of renting
premises and their operation.
The governments of many countries, predicting such changes in the development of
digital technologies, seek to promote the development of the digital economy in order to use
its advantages, which will allow them to adapt to the challenges of the environment and
ensure their competitiveness. Accordingly, this is also what business representatives strive
for, since one of the areas of ensuring competitiveness in the conditions of the intensified
global competitiveness is ensuring the digitization of business processes.
In modern strategies for the development of the economy at any level in the conditions
of the intensified global competitiveness, the priority is innovative development based on
compliance with Industry 4.0. one of the concepts of which is precisely the development of
the digital economy. To ensure the digitalization of business processes in the face of the
intensified global competitiveness, the governments of countries should implement the
following measures to promote the digitalization of economic systems:
- to ensure the development of infrastructure, which is the basis for the formation of
new business models;
- to contribute to the reduction of barriers in the functioning of the digital economy;
- increase the level of ownership of digital technologies among the population;
- provide training and advanced training of personnel in the direction of improving
digital skills;
- to ensure the development of the digital security system;
- to stimulate the general development of the digital sector of the economy.
Therefore, the directions of the digital economy transformation should include
incentives from the authorities to promote the digitalization of business, the development of
digital infrastructure, and the renewal of projects based on the principles of Industry 4.0.
Rational tools for ensuring such a transformation include:
- digital technologies (analytics of large amounts of information);
- m2m communication;
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- artificial Intelligence;
- robotics;
- creation of own digital platforms;
- development of high-tech industries.
The implementation of such measures will allow for faster development of electronic
interaction between business and government, ensure cyber security, promote greater
openness of data, create an ecosystem, and increase competitiveness on the global market.
The digital economy includes the innovative technologies development, the
implementation of digitization in industrial development and business processes. The
development of digitalization is carried out in two directions: the development and
improvement of the efficiency of the innovative development of the electronic industry and
the stimulation of the companies’ development that provide digital technology services. In
the first case, it can be the production of microchips, telecommunications devices,
electronics, etc., as well as the stimulation of scientific and innovative activities in the
direction of the development and production of new digital tools.
In the second case, it is the ability to use and organize digital information, perform
data analysis, store and manage a large amount of digital information. The importance of the
implementation of the digital economy is explained by global trends in this direction, which
are aimed at the implementation of large-scale projects for the economic sectors’
digitalization, promoting the creation of digital jobs in these areas, and increasing the level
of competitiveness of the electronic industry.
Digitization, like any phenomenon, regardless of its advantages, has disadvantages for
conducting business processes. Among the threats posed by digitalization for the
development of business processes and the company as a whole can be attributed:
- data security, using digital technologies the company carries out storage,
accumulation and management using digital technologies, while violations of the security of
storage or working with data can lead to the loss of this data and the company's reputation;
- the danger of digital system failures, which may be caused by power outages,
hardware and software malfunctions, cyber attacks, etc.
Also, the use of digital technologies in business processes can cause other problems,
for example, there may be a shortage of highly qualified personnel, the high cost of
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implementing digital technologies, instability and short-term competitive advantages in the
market as a result of the introduction of digital technologies, etc.
For a more reasonable implementation of digital technologies, companies need to
carry out certain work in the following sequence:
firstly, collection of information about business processes, its modeling under the
conditions of implementation of digital technologies;
secondly, identifying the places of origin, processing and use of information;
thirdly, modeling the use of information flows within the company's business
processes;
fourthly, creation of automated information systems using hardware and software
tools;
fifthly, control of business processes in which new digital technologies were used for
the company.
When digitizing business processes, it is very important to understand the essence of
this process and the company's readiness for such steps. Digitization of the company's
business processes requires complexity, which involves achieving the set goal and
performing the tasks necessary for this, which must be accompanied by the necessary
resources.
To ensure data security, companies need to invest in reliable modern security tools
such as firewalls, anti-virus software, encryption and other information protection tools.
Carry out regular backup of information data to reduce the risk of their loss.
Factors influencing the digitalization of business processes:
- initiative, important for the digitization of business processes is understanding the
degree of necessity of implementing digital technologies, as well as making the necessary
management decisions regarding the digital technologies’ implementation, taking into
account the possible risks of this process. When initiating the implementation of
digitalization to improve the efficiency of business processes, it is important to define each
task to obtain the overall optimal result of digitalization, i.e., the use of the so-called cascade
strategy for making managerial decisions regarding the digitalization of business processes,
which makes it possible to reduce the risks of the digitalization project as a result of the
completion of previously set tasks ;
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- control is very important for any activities and solving tasks, but with the
digitalization of business processes, it becomes especially important due to the speed of
technology changes. It is important to build a horizontal system of hierarchy in informing
about the implementation of digitalization and ensuring full control with monitoring of
possible lag for making operational decisions;
- innovativeness - is a necessity in the digital transformation of the company's business
processes, since it is the prevalence of innovative forms, methods, means, processes,
technologies, the use of a creative approach that enables the company to gain competitive
advantages on the market due to digitalization, as well as to achieve a certain balance
between innovative implementations and their creativity in relation to the traditional
business model;
- financial support – the implementation of digital technologies requires financial
investments, which can become an obstacle for their implementation, for example, for small
enterprises. It is important for the company to provide financial support for digital
transformation without significant asymmetry in the company's profit. Time breaks in the
financing of business processes’ digitization nullify previous investments and changes, which
is connected with the speed of changes of digital technologies and their improvement.
The effect of digitalization of business processes is manifested in the transformation
of the company's activities in accordance with the trends and challenges of the global
environment and provides an opportunity to ensure the competitiveness of companies. In
today's conditions of the intensified global competitiveness, those companies that apply the
advantages of digitalization of business processes and coordinate their activities in unison
with the new ideology of digitalization of social relations will win.
4. Discussion
Agreeing with the opinion of scientists (Leyh C. et al., 2016), it should be noted that
for many decades business process models have created a basis for economically successful
participation in the market. That is why digitization processes have significant potential for
automating process discovery.
We consider research (Bischoff I. et al., 2021; Rice M. D. et al., 2020) devoted to the
development of joint business parks to be relevant. The authors paid the main attention to
the role of intra-regional competition. Scholars measure the intensity of competition using
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local tax rates and find evidence that supports the likelihood of the formation of intercity
business parks due to the intensification of intraregional competition.
Supporting research (Gonzalez L., 2022), we would like to point out that synergy and
timing alignment between research and business plan competitions can enhance the learning
process by creating more opportunities to demonstrate knowledge and receive feedback. The
authors of the article demonstrate the option of interaction between scientific research and
entrepreneurship competitions to support more inclusive development of students.
We confirm the relevance of research (Cant M. C., 2016) that business plan
competitions are a powerful learning tool that can stimulate creativity, but more importantly
prepare participants for the real world of entrepreneurship. According to the authors, there
is a huge increase in encouraging entrepreneurship and innovation. The Business Plan
Competition provides a platform where aspiring entrepreneurs are exposed to emerging
business ideas and organizations.
Studying the research (Liu C. et al., 2020), we agree that the competitive advantages
of travel agencies are realized when the business maintains good relations with competitors
and adopts an orientation towards digital development and learning, or deploys an
appropriate business competitive strategy and entrepreneurial intentions to allow offering
new services to customers compared to competitors
Conclusion
The conducted research proves the growth of Internet users in the world and the
introduction of digitization in social relations. Digitization, as a process of developing and
implementing digital technologies to create new opportunities, increases the efficiency of
business processes and the activities of companies as a whole due to the optimization of a
large number of disparate processes, saving time and reducing costs. It enables the company
to conduct a more flexible development policy, to adapt to changes in the market
environment, customer requirements and preferences by quickly responding to various
processes affecting business functioning.
Digitalization has had a significant impact on global competition, on the one hand by
making it easier for companies to access markets, and on the other hand by creating a more
intense competitive environment. This forces companies to constantly innovate, to move in
the direction of compliance with the principles of Industry 4.0 development, to increase
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investment activity for the development and implementation of new technologies, digital
tools, creative management solutions to adapt to the intensified global competitiveness.
In order to increase competitiveness in the conditions of the intensified global
competitiveness, companies need to attract investments in research and development in
order to own the latest technological achievements, produce new products and services.
The issue of developing measures and strategies for the development of digital
technologies to increase the efficiency of the companies’ functioning in the conditions of the
intensified global competitiveness requires further research.
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