Luic, Ljerka (Ed.); Martincevic, Ivana (Ed.); Sesa, Vesna (Ed.

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Economic and social development : 83rd International Scientific
Conference on Economic and Social Development – "Green
Marketing" : book of proceedings : Varazdin, 2-3 June, 2022

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Reference: (2022). Economic and social development : 83rd International Scientific Conference
on Economic and Social Development – "Green Marketing" : book of proceedings : Varazdin,
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 Varazdin Development and Entrepreneurship Agency and University North
in cooperation with
Faculty of Management University of Warsaw
Faculty of Law, Economics and Social Sciences Sale - Mohammed V University in Rabat

Economic and Social Development

83rd International Scientific Conference on Economic and Social Development –
"Green Marketing"

Book of Proceedings
Editors:
Ljerka Luic, Ivana Martincevic, Vesna Sesar

Varazdin, 2-3 June, 2022

 Varazdin Development and Entrepreneurship Agency and University North
in cooperation with
Faculty of Management University of Warsaw
Faculty of Law, Economics and Social Sciences Sale - Mohammed V University in Rabat

Editors:
Ljerka Luic, University North, Croatia
Ivana Martincevic, University North, Croatia
Vesna Sesar, University North, Croatia

Economic and Social Development

83rd International Scientific Conference on Economic and Social Development –
"Green Marketing"

Book of Proceedings

Varazdin, 2-3 June, 2022

Title ◼ Economic and Social Development (Book of Proceedings), 83rd International Scientific Conference on Economic and Social
Development - "Green Marketing"

Editors ◼ Ljerka Luic, Ivana Martincevic, Vesna Sesar

Scientific Committee / Programski Odbor ◼ Marijan Cingula (President), University of Zagreb, Croatia; Sannur Aliyev, Azerbaijan State
University of Economics, Azerbaijan; Ayuba A. Aminu, University of Maiduguri, Nigeria; Anona Armstrong, Victoria University, Australia;
Gouri Sankar Bandyopadhyay, The University of Burdwan, Rajbati Bardhaman, India; Haimanti Banerji, Indian Institute of Technology,
Kharagpur, India; Victor Beker, University of Buenos Aires, Argentina; Asmae Benthami, Mohammed V University, Morocco; Alla Bobyleva,
The Lomonosov Moscow State University, Russia; Leonid K. Bobrov, State University of Economics and Management, Novosibirsk, Russia;
Rado Bohinc, University of Ljubljana, Slovenia; Adnan Celik, Selcuk University, Konya, Turkey; Angelo Maia Cister, Federal University of
Rio de Janeiro, Brasil; Mirela Cristea, University of Craiova, Romania; Taoufik Daghri, Mohammed V University, Morocco; Oguz Demir,
Istanbul Commerce University, Turkey; T.S. Devaraja, University of Mysore, India; Onur Dogan, Dokuz Eylul University, Turkey; Darko
Dukic, University of Osijek, Croatia; Gordana Dukic, University of Osijek, Croatia; Alba Dumi, Vlora University, Vlore, Albania; Galina
Pavlovna Gagarinskaya, Samara State University, Russia; Mirjana Gligoric, Faculty of Economics - Belgrade University, Serbia; Maria Jose
Angelico Goncalves, Porto Accounting and Business School - P.Porto, Portugal; Mehmet Emre Gorgulu, Afyon Kocatepe University, Turkey;
Klodiana Gorica, University of Tirana, Albania; Aleksandra Grobelna, Gdynia Maritime University, Poland; Liudmila Guzikova, Peter the
Great Saint-Petersburg Polytechnic University, Russia; Anica Hunjet, University North, Koprivnica, Croatia; Khalid Hammes, Mohammed V
University, Morocco; Oxana Ivanova, Ulyanovsk State University, Ulyanovsk, Russia; Irena Jankovic, Faculty of Economics, Belgrade
University, Serbia; Myrl Jones, Radford University, USA; Hacer Simay Karaalp, Pamukkale University, Turkey; Dafna Kariv, The College of
Management Academic Studies, Rishon Le Zion, Israel; Hilal Yildirir Keser, Uludag University, Bursa, Turkey; Sophia Khalimova, Institute
of Economics and Industrial Engineering of Siberian Branch of Russian Academy of Science, Novosibirsk, Russia; Marina Klacmer Calopa,
University of Zagreb, Croatia; Igor Klopotan, Medjimursko Veleuciliste u Cakovcu, Croatia; Vladimir Kovsca, University of Zagreb, Croatia;
Goran Kozina, University North, Koprivnica, Croatia; Dzenan Kulovic, Univeristy of Zenica, Bosnia and Herzegovina; Robert Lewis, Les
Roches Gruyere University of Applied Sciences, Bulle, Switzerland; Ladislav Lukas, Univ. of West Bohemia, Faculty of Economics, Czech
Republic; Mustapha Machrafi, Mohammed V University, Morocco; Joao Jose Lourenco Marques, University of Aveiro, Portugal; Pascal
Marty, University of La Rochelle, France; Vaidotas Matutis, Vilnius University, Lithuania; Daniel Francois Meyer, North West University,
South Africa; Marin Milkovic, University North, Koprivnica, Croatia; Abdelhamid Nechad, ENCGT- Abdelmalek Essaadi University,
Morocco; Gratiela Georgiana Noja, West University of Timisoara, Romania; Zsuzsanna Novak, Corvinus University of Budapest, Hungary;
Tomasz Ochinowski, University of Warsaw, Poland; Barbara Herceg Paksic, University of Osijek, Croatia; Vera Palea, Universita degli Studi
di Torino, Italy; Dusko Pavlovic, Libertas International University, Zagreb, Croatia; Igor Pihir, University of Zagreb, Croatia; Dmitri Pletnev,
Chelyabinsk State University, Russian Federation; Miroslaw Przygoda, University of Warsaw, Poland; Karlis Purmalis, University of Latvia,
Latvia; Nicholas Recker, Metropolitan State University of Denver, USA; Kerry Redican, Virginia Tech, Blacksburg, USA; Humberto Ribeiro,
University of Aveiro, Portugal; Robert Rybnicek, University of Graz, Austria; Elzbieta Szymanska, Bialystok University of Technology,
Poland; Katarzyna Szymanska, The State Higher School of Vocational Education in Ciechanow, Poland; Ilaria Tutore, University of Naples
Parthenope, Italy; Sandra Raquel Alves, Polytechnic of Leiria, Portugal; Joanna Stawska, University of Lodz, Poland; Ilko Vrankic, University
of Zagreb, Croatia; Stanislaw Walukiewicz, Bialystok University of Technology, Poland; Thomas Will, Agnes Scott College, USA; Li
Yongqiang, Victoria University, Australia; Peter Zabielskis, University of Macau, China; Silvija Zeman, Medjimursko Veleuciliste u Cakovcu,
Croatia; Tao Zeng, Wilfrid Laurier University, Waterloo, Canada; Snezana Zivkovic, University of Nis, Serbia.

Review Committee / Recenzentski Odbor ◼ Marina Klacmer Calopa (President); Ana Aleksic; Sandra Raquel Alves; Ayuba Aminu; Mihovil
Andjelinovic; Josip Arneric; Lidija Bagaric; Tomislav Bakovic; Sanja Blazevic; Leonid Bobrov; Ruzica Brecic; Anita Ceh Casni; Iryna
Chernysh; Mirela Cristea; Oguz Demir; Stjepan Dvorski; Robert Fabac; Ivica Filipovic; Sinisa Franjic; Fran Galetic; Mirjana Gligoric;
Tomislav Globan; Anita Goltnik Urnaut; Tomislav Herceg; Irena Jankovic; Emina Jerkovic; Dafna Kariv; Oliver Kesar; Hilal Yildirir Keser;
Martina Dragija Kostic; Tatjana Kovac; Vladimir Kovsca; Angelo Maia Cister; Katarina Marosevic; Vaidotas Matutis; Marjana Merkac Skok;
Daniel Francois Meyer; Natanya Meyer; Josip Mikulic; Ljubica Milanovic Glavan; Guenter Mueller; Ivana Nacinovic Braje; Zlatko Nedelko;
Gratiela Georgiana Noja; Zsuzsanna Novak; Alka Obadic; Claudia Ogrean; Igor Pihir; Najla Podrug; Vojko Potocan; Dinko Primorac; Zeljka
Primorac; Sanda Renko; Humberto Ribeiro; Vlasta Roska; Souhaila Said; Armando Javier Sanchez Diaz; Tomislav Sekur; Lorena Skuflic;
Mirko Smoljic; Petar Soric; Mario Spremic; Matjaz Stor; Tomasz Studzieniecki; Lejla Tijanic; Daniel Tomic; Boris Tusek; Rebeka Daniela
Vlahov; Ilko Vrankic; Thomas Will; Zoran Wittine; Tao Zeng; Grzegorz Zimon; Snezana Zivkovic; Berislav Zmuk.

Organizing Committee / Organizacijski Odbor ◼ Domagoj Cingula (President); Djani Bunja; Marina Klacmer Calopa; Spomenko Kesina;
Erlino Koscak; Tomasz Ochinowski; Miroslaw Przygoda; Michael Stefulj; Tomasz Studzieniecki; Rebeka Danijela Vlahov; Sime Vucetic.

Publishing Editor ◼ Spomenko Kesina, Domagoj Cingula

Publisher ◼ Design ◼ Print ◼ Varazdin Development and Entrepreneurship Agency, Varazdin, Croatia / University North, Koprivnica,
Croatia / Faculty of Management University of Warsaw, Warsaw, Poland / Faculty of Law, Economics and Social Sciences Sale - Mohammed
V University in Rabat, Morocco

Printing ◼ Online Edition

ISSN 1849-7535
The Book is open access and double-blind peer reviewed.
Our past Books are indexed and abstracted by ProQuest, EconBIZ, CPCI (Web of Science) and EconLit databases and available for download
in a PDF format from the Economic and Social Development Conference website: http://www.esd-conference.com

© 2022 Varazdin Development and Entrepreneurship Agency, Varazdin, Croatia; University North, Koprivnica, Croatia; Faculty of
Management University of Warsaw, Warsaw, Poland; Faculty of Law, Economics and Social Sciences Sale - Mohammed V University
in Rabat, Morocco. All rights reserved. Authors are responsible for the linguistic and technical accuracy of their contributions. Authors keep
their copyrights for further publishing.
CONTENTS

IMPACT OF COVID 19 ON RAKUTEN BUSINESS RESULT ........................................ 1

Josko Lozic, Katerina Fotova Cikovic, Damira Kecek

ENTREPRENEURIAL ACTIVITIES OF UNIVERSITIES – CASE OF SLOVAKIA . 11

Miroslav Sipikal

THE ACRONYM AS A BRAND NAME: WHY CHOOSE IT FOR THE NAMING OF

THE BRAND AND WHY NOT CHOOSE IT IN ANY CASE? ........................................ 17
Arpad Ferenc Papp-Vary, Rita Lukacs

INTERPERSONAL RELATIONS AND THE IMPORTANCE OF INTELLECTUAL

CAPITAL AS A COMPETITIVE ADVANTAGE OF THE ORGANIZATION ............ 27
Anica Hunjet, Petra Ostojic, Sanja Mihelic

GREEN PUBLIC PROCUREMENT ................................................................................... 37

Vlatka Kordos, Valentina Golubovic, Ana Globocnik Zunac

INTERDEPENDENGCE OF STAKEHOLDERS IN A TOURIST DESTINATION

ACCORDING TO "ZERO" ENVIRONMENTAL IMPACT........................................... 44
Dijana Vukovic, Irena Zavrl, Anica Hunjet

BITCOIN AS A SUBSTITUTE FOR CURRENT CURRENCIES ................................... 55

Ismet Voka, Filipos Ruxho

HYDROGEN UTILISATION AS A KEY FACTOR FOR ACHIEVING ENERGY

SYSTEM DECARBONISATION......................................................................................... 64
Dalibor Pudic, Eraldo Banovac

EVIDENCE ON PRE-PANDEMIC OUTBOUND TOURISM DEMAND

DETERMINANTS IN OECD COUNTRIES ...................................................................... 75
Blanka Simundic

IMPACT ASSESMENT OF DIGITAL SKILLS ON R&D INVESTMENT ................... 86

Neva Babic, Ljerka Luic, Ante Roncevic

INFLUENCE OF FANS ON RESULT EFFICIENCY IN FOOTBALL .......................... 97

Hrvoje Ajman, Josip Cvenic, Mateo Paulovic

IMPLICATIONS OF DIGITAL WORK ON EMPLOYEE PRODUCTIVITY AND

THEIR DIGITAL EMPATHY ........................................................................................... 103
Mia Haramija, Zeljka Fruk

THE ROLE OF PERSONAL DIGITAL COMPETITIVENESS IN THE DIGITAL

ECONOMY: ATTITUDES AND VALUES OF DOCTORAL (PHD) STUDENTS ..... 111
Darijo Klaric, Josip Mandic
DIFFERENTIATION OF DIGITAL PUBLIC RELATION TOOLS ANALYSED FROM
A DIGITAL LITERACY PERSPECTIVE........................................................................ 121
Manuela Pantaler

THE IMPORTANCE OF HARMONIZATION OF EDUCATIONAL PROGRAMS IN

DIGITAL TRANSFORMATION ....................................................................................... 127
Kristina Milaj, Tea Stepan

THE INFLUENCE OF CITY ADMINISTRATION'S RESPONSIVENESS TO

CITIZENS ATTITUDES TOWARDS CITY DIGITAL COMMUNICATION ............ 137
Lovro Lukavecki, Maja Hresc

NETIQUETTE AND DIGITAL EMPATHY IN THE CONTEXT OF APPLYING

CROSS-CURRICULAR TOPICS IN THE CONTEMPORARY EDUCATION.......... 146
Marta Novak

SYNERGISTIC EFFECT OF BUSINESS SYNTHESIS AND INFORMAL

EDUCATION ON THE DEVELOPMENT OF REGIONAL DIGITAL ECONOMY . 154
Jurica Mustac

A STEP CLOSER TO UNDERSTANDING RESEARCH TRENDS IN THE FIELD OF

DIGITAL INCLUSION OF PERSONS WITH DISABILITIES IN HIGHER
EDUCATION: A SYSTEMATIC LITERATURE REVIEW .......................................... 164
Ljerka Luic, Maja Popovic

CAUSAL RELATIONSHIP BETWEEN DIGITAL INTELLIGENCE QUOTIENT AND

THE DIGITAL ECONOMY AND SOCIETY INDEX .................................................... 171
Marija Dusevic

EDUCATION LEVEL EFFECT OF URBAN DIGITAL IMMIGRANTS TOWARDS

THE LEVEL OF THEIR DIGITAL LITERACY ............................................................ 179
Domagoj Topic, Marko Antic, Josipa Brkic

RESEARCH AND CRITICAL EVALUATION IN THE DIGITAL EDUCATIONAL

ENVIRONMENT ................................................................................................................. 186
Manuela Koseto Nadinic, Sandra Maletic

THE IMPACT OF DIGITAL LITERACY ON THE CYBER SECURITY OF DIGITAL

CITIZENS ............................................................................................................................. 196
Eva Bach

DIGITAL COMMUNICATION AND DIGITAL COMPETENCIES - PREREQUISITES

FOR BUILDING THE ORGANIZATION'S DIGITAL IDENTITY ............................. 205
Mateja Fras Venus

PERSONAL CYBER SECURITY MANAGEMENT: BASED ON THE EXAMPLE OF

MASTERS OF EDUCATION............................................................................................. 211
Drazenka Svelec-Juricic, Matilda Bulic
 83rd International Scientific Conference on Economic and Social Development - "Green Marketing" – Varazdin, 2-3 June, 2022

IMPACT OF COVID 19 ON RAKUTEN BUSINESS RESULT

Josko Lozic
University North, Croatia
jlozic@unin.hr

Katerina Fotova Cikovic

University North, Croatia
kcikovic@unin.hr

Damira Kecek
University North, Croatia
dkecek@unin.hr

ABSTRACT
Purpose - the aim of this paper is to analyse the business efficiency of the Rakuten platform at
the beginning and during the Covid 19 crisis. Methodology / Design - research and analysis
are based on secondary research published in Annual Report Corporation as well as in other
relevant scientific sources. The research is divided into three basic parts that can be
individually compared with the results of research on other platforms in the pandemic period.
The results - the results of the research proved the strong impact of the Covid 19 pandemic on
the overall business result. The analysis of financial items, as a quantitative part of the
research, needs to be compared with the results that the platform achieves in the development
of business activities in order to obtain a complete picture of the business. Conclusion - the
platform has achieved negative financial results in the last two years, but the number of users
is still growing, which leaves room for financial recovery. In addition, the platform develops
new technologies and business models from which it expects revenue in the future.
Keywords: hybrid platform, multi-sided platform, online retail, platform economy, Rakuten

1. INTRODUCTION
Rakuten was founded in 1997, as an online store. Very soon after its founding, the Rakuten
Ichiba electronic platform took over the market leadership from its competitors. The company
levered the Japanese hospitality to build a reliable corporate culture and shaped an outstanding
service that focuses on encouraging long-term relationships between merchants and customers
(Willenborg 2016). Rakuten Ichiba platform in Japan is a market leader in several different
digital service sectors from banking to travel thus making it one of the most innovative
companies in the world: it was mentioned, for example, by Forbes as one of the world’s most
innovative companies in 2013 (Hänninen, Smedlund 2019). The platform diversified the
business model and took advantage of the effects of digital business transformation (Lozić
2019). Tokyo-based Rakuten so dominates the e-commerce market in its home country that it's
often called the Amazon of Japan. If it's not well-known in some other parts of the world, that's
about to change (Helft 2017). Rakuten Group is a B-to-C platform, similar to Amazon,
operating mainly in Japan but currently expanding. It offers a similar combination of retail and
entertainment, while also creating online malls where sellers can create virtual shopfronts to
attract customers. It is, however, a pure multi-sided platform, offering no own goods or logistics
(Strategic direction 2018). The business model of the platform is organized as a classic platform
economy (Parker et.al. 2016; Moazed, Johnson 2016) which uses the effects of the zero
marginal cost model (Rifkin 2015). The business model is a combination of several different
models of service commodification that are immanent to postmodern society (Lozić et.al.
2019).

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 83rd International Scientific Conference on Economic and Social Development - "Green Marketing" – Varazdin, 2-3 June, 2022

The strategy of the platform is based on a combination of vendor creativity and technological
algorithm, on the one hand, and the development of logistics and other forms of business
activities, on the other hand. In this context, we can talk about a hybrid model of platform
development and management. Rakuten is, besides Amazon, today’s most diversified e-
commerce company worldwide with businesses ranging from marketplaces, to accompanied
internet services, online advertising, media content, in-house media devices, shipping and
logistics, and payment and financing services (Schiliro 2013). As we approach our 25th
anniversary, we have expanded our ecosystem beyond e-commerce to include a diverse
portfolio of businesses centred on fintech and mobile (Annual Report 2020). In addition to
Rakuten Ichiba, online shopping as the oldest business segment, the platform develops business
in the segment of auctions, online golf booking, online travel booking, book sales, etc. The
platform develops a special business segment within the financial sector by providing online
banking, financing and credit card services. A modern system of contactless payment and
payment by smartphones has been developed. The platform provides the services of Internet
providers as well as broadband services, and has a special sector of sports business. The paper
will investigate and analyse the impact of the Covid 19 pandemic on the platform's operations.
The results of the research can serve as a comparison with other organizations in the platform
economy model.

2. LITERATURE REVIEW
Rakuten started with its core business, an online shopping mall called Rakuten Ichiba, selling
everything from consumer electronics and computers to fashion, home furnishings, sporting
goods, etc. In Japan alone, more than 60 % of its population uses the marketplace accounting
for an almost 30 % share of the overall 28.2 billion € e-commerce market in Japan (Willenborg
2016). Rakuten's vision is focused on disruptive innovation, reliance on knowledge, creativity
and passion from around the world to meet ambitious goals and help build communities where
people can follow their dreams and live in happiness (Annual Report 2020). With a different
approach than its competitors, Rakuten Ichiba banks on a new strategy that uses a business-to-
business-to-customer (B2B2C) model. The B2B2C model is a shop-based marketing place,
focusing on the exchange between buyers and sellers rather than on being a shop or a collection
of shops (Willenborg 2016). It also has a loyalty scheme, which rewards those who shop there
with any purchases made across its ecosystem. It earns profit from membership fees and
commission, as well as the sale of data, digital marketing, and sales consultancy services
(Strategic direction). Rakuten concept is based on making connections between people based
on areas of interest, which means that individuals as well as merchants can become curators,
influential to other interested parties (Thau 2014). According to the organizational model,
Rakuten is a multi-sided platform which makes it much less capital intensive, easier to scale,
and more profitable than traditional retail. Uniquely, the new style of multi-sided platform
retailers is able to focus entirely on creating lock-in of customers, leaving the suppliers using
their platform to focus on the transactions of goods (Strategic direction). In the ten years since
2000, the corporation has made more than twenty strategic acquisitions. The M&A activities
were accompanied with providing corporate venture capital to new acquired companies. This
can be seen as a hybrid model between a Silicon Valley business cluster and a Japanese
“keiretsu” system (Walter, Zhang 2012). Strategic takeovers and business diversification had a
negative impact on the corporation's operations at the beginning of the crisis, but regular
customers retained all the rights they had acquired in previous periods (Coldevey 2020). While
both Rakuten Group and Amazon.com maintain tight control over their suppliers (banning those
that do not conform to their quality criteria), they offer great freedom to those that wish to use
their platform to sell quality good (Strategic direction). Our research found that the three leading
platform marketplaces differ fundamentally in their business models.

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 83rd International Scientific Conference on Economic and Social Development - "Green Marketing" – Varazdin, 2-3 June, 2022

The platforms from Alibaba and Rakuten are comprised of independent sellers, whereas
Amazon combines sales from independent suppliers with its own inventory (Hänninen,
Smedlund 2019). The value proposition of Rakuten Group is based on offering shopping as an
entertainment, with its platform serving as a virtual shopping mall allowing suppliers to create
their own storefront like in a physical mall. Rakuten is a pure platform, without vertical
integration and in-house supply chain processes (Hänninen et.al. 2017). Rakuten.com is pretty
much the best online shopping cashback website out there (Taylor 2022). On Rakuten, savings
of up to 15% can be achieved by returning money after purchase (Rosen 2021). Over 90% of
members use the benefits of collecting points, and the platform ranks first in Japan in terms of
customer satisfaction with this type of reward (Annual Report). We recently introduced a new
feature called Personalized Rewards that allows our merchants to pair their customer data with
our first-party data to create targeted, hyper-personalized Cash Back offers. The affiliate
marketing expertise of our sister company, Rakuten Advertising, makes this experience
frictionless for both the consumer and our partners (Yu 2021). Rakuten Group offers over 70
services in Japan, and its mobile carrier business is a subscription service based on monthly
fees that also generates high contact frequency with its users (Annual Report 2020). Rakuten
TV has launched twenty-one new television channels in Spain, Italy and France (Sutton 2021).
Rakuten TV is the first on demand and streaming platform in Europe combining TVOD, SVOD,
AVOD and FAST services (Dziadul 2021). Data mining method also can be used to improve
the accuracy. The result of this research acts as initial research for future large application
development which is able to mine all Indonesia e-commerce site like google shopping
(Simanjuntak et.al. 2015). Rakuten Ichiba is “based on the concept of not having internet savvy
people run the business, but creating a platform that enables ordinary people skilled in retail to
open their own online shop” This highly profitable business model focuses on a shop-centric
rather than product-centric satisfying both consumers and merchants equally (Willenborg
2016). In April 2021, the name of the corporation was changed to Rakuten Group. There are
two fundamental reasons for this. The first reason was business differentiation and procurement
decentralization, and the second reason was the expansion of the ecosystem into the
environment and the association with new companies (Annual Report 2020).

3. METHODOLGY AND RESEARCH QUESTIONS

The paper will use the Rakuten Corporate Report 2020 as the official report of the corporation
on business results. In addition to the Annual Report, other scientific sources that are relevant
to the research of the topic in the paper will be used. The analysis is based on the financial
analysis of selected items from the profit and loss account as well as on the statistical analysis
of the trend and the ANOVA model.
Research and analysis focuses on two fundamental research issues:
• Q1 - How the Covid 19 crisis is affecting the financial result of the platform.
• Q2 - How the Covid 19 crisis is affecting the trend in the number of members on the
platform.

The first research question is aimed at analysing the impact of the Covid 19 pandemic on the
platform’s overall business results. The overall business of the platform will be analysed on the
basis of selected financial items, but also as an overall trend in the number of users and
technological development of the platform. The second research question is aimed at analysing
the trend of the number of users in the context of financial performance, but also expectations
of the trend of revenue and profit of the platform in the future. The results and commentary of
the research are presented in the Conclusion chapter.

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 83rd International Scientific Conference on Economic and Social Development - "Green Marketing" – Varazdin, 2-3 June, 2022

4. BUSINESS ANALYSIS
The Rakuten platform is organized as a hybrid model of the platform economy. It generates
revenue from interactions in B2B and B2C models, as well as other service commodity models.
As with other hybrid ecosystems in the platform model, services from Big-data processing,
subscriptions to various services, services and the like are monetized. Most strikingly, it is the
use of Big Data and technology solutions such as data analytics and cloud computing/storage
that is making these new retail giants so powerful. It is through the accumulation and control
of consumer data that they are able to control and profit from the markets within which they
function (Strategic direction 2018). Research and analysis are divided into three basic segments.
In the first part, the selected financial parameters from the profit and loss account will be
analysed. The research includes financial analysis and interpretation of results and analysis by
regression model of trends in order to determine the average values and trends in the analysed
period. In the second part of the research, the trend of platform members is analysed. Statistical
models of data processing as well as regression analysis are used in the analysis. In the third
part, the ANOVA model will be used to determine the statistical significance and the
significance of the correlation of the selected analysed variables.

4.1. Financial analysis

The analysis of the financial operations of the corporation covers a five-year period, i.e. the
period from 2016 to 2020. In the analysed period, the corporation's revenues grew by 90.2%,
from $ 7.193 billion to $ 13.682 billion. In the same period, cost revenue increased by 138.2%,
which is above the increase in revenue. In the last two analysed periods, the cost of revenue
was higher than total revenue. Gross profit decreased continuously in the analysed period and
fell from 13.3% to 6.7%. Gross profit has been negative in the last two analysed periods. The
increase in the cost of revenue above the increase in revenue indicates the strong impact of
Covid 19 on the platform's operations as well as the overall financial result.

Table 1: Selected financial items (000; $)

2016 2017 2018 2019 2020
Revenue 7.193.627 8.405.818 10.023.470 11.628.170 13.682.060
Cost of revenue 6.233.901 7.454.195 9.352.553 11.655.500 14.848.520
Gross Profit 959.726 951.623 670.917 -27.330 -1.166.460
% 13,3% 11,3% 6,7% - -
Operating income 717.388 1.329.161 1.550.869 669.250 -882.180
Net income 349.554 984.207 1.294.766 -293.370 -1.073.471
EBIT % 10,0% 15,8% 15,5% 5,8% -
Source: own illustration

Operating income and net income grew in the first three analysed periods, and then began to
fall sharply. At the beginning of the crisis, Covid 19 operating income fell by 56.8% compared
to 2018. At the end of the analysed period, operating income was negative. Operating income
grew from 10% to more than 15%, before falling to 5.8%, i.e. a negative result. Net income was
similar, but at the beginning of the crisis Covid 19 was negative, and the following year the loss
increased by 265.9%. The results of the research are shown in Table 1. Due to poor business
results, the platform closed its online store in the USA. Rakuten bought Buy.com for $250
million back in 2010 in an attempt to expand its retail business out of its stronghold of Japan.
Unfortunately, the evolving market, aggressive growth (and targeting of rivals) at Amazon and,
likely, the choice to rebrand the once well-known site under the Rakuten name all led to
declining business (Coldevey 2020). The Rakuten mobile network made $ 1.02 billion in losses
in the first year of the Covid 19 crisis (Kapko 2022).

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Table 2: Regression analysis

Revenue Cost of revenue
15,000,000 20,000,000
15,000,000
10,000,000
10,000,000
5,000,000 y = 2E+06x + 7E+06 y = 2E+06x + 6E+06
5,000,000
R² = 0.992 R² = 0.9711
0 0
0 1 2 3 4 5 0 1 2 3 4 5

Operating income Net income

2,000,000 2,000,000

1,000,000 1,000,000

0 0
0 1 2 3 4 5 0 1 2 3 4 5
-1,000,000 -1,000,000
y = -387838x2 + 1E+06x + 673031 y= -337729x2 + 938552x + 401605
-2,000,000 R² = 0.9927 -2,000,000 R² = 0.8942

Source: own illustration

Revenue growth is explained by the linear regression equation y = 2E + 06x + 7E + 06. The
average annual revenue growth was 19.63%, with a coefficient of determination R² = 0.992.
The cost of revenue trend is explained by the linear regression equation y = 2E + 06x + 6E +
06. The average annual increase in Cost of revenue was 20.18%, which was higher than the
average trend of revenue growth. The operating income trend is explained by the regression
equation y = -387838x2 + 1E + 06x + 673031, with the coefficient of determination R² = 0.9927.
Operating income was the highest in 2018, amounting to 15.5% of total revenue. The net
income trend is explained by the regression equation y = -337729x2 + 938552x + 401605, with
the coefficient of determination R² = 0.8942. The results of the research are shown in Table 2.
The research confirmed the strong impact of the pandemic on the financial result of the
platform. In addition, the platform began developing its own mobile telephony as well as the
5G network, which further impacted the financial result.

4.2. Number of user’s analysis

The number of members of the Rakuten platform has been continuously growing in the analysed
period. From 2014 to 2020, the number of members increased from 70.3 million to 119.8
million or 70.4%. Comparing with the selected financial period, from 2016 to 2020, the number
of members increased by 36.9%. In the same period, revenues increased almost three times
more than the increase in the number of members, which indicates increased consumption of
existing members. The increase in the number of members is digressive and was the largest in
the first analysed period, and the smallest in the last analysed period. At the beginning of the
Covid 19 crisis, the trend in the number of members changed from digressive to progressive
growth, after which the trend became digressive again. Digressive growth indicates the
saturation of the number of members on the platform. The trend in the number of members is
shown in Table 3.

Table following on the next page

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Table 3: Number of Rakuten members (mill.)

2014 70,3 %
2015 78,8 12,1%
2016 87,5 11,0%
2017 95,2 8,8%
2018 102,6 7,8%
2019 111,4 8,6%
2020 119,8 7,5%
Source: own illustration (www.statista.com)

The trend of growth in the number of users over a period of seven years is explained by the
linear regression equation y = 8.1714x + 70.571, with a coefficient of determination R² =
0.9995. The average annual increase in the number of members was 8.59%. In the analysed
five-year period, comparable to the financial analysis of operations, the average annual increase
in the number of members was 7.82%. The growth trend is digressive and lower by 12% than
the growth of total revenues. The management of the platform relied on the loyalty of the
members and their acceptance of the new mobile network that will be launched by the platform.
In 2019, there were already 100 million members in Japan, and the platform expected the
development of a mobile network within the ecosystem due to various forms of rewards
developed by the platform in other sectors (Simms 2019).

4.3. ANOVA analysis

The platform achieves revenue growth and membership growth, but has a negative financial
result. Growth in revenue and membership is no longer sufficient to cover operating costs. The
development strategy is changing from an online sales platform to a hybrid form of the platform
and an ecosystem development platform. Strategic acquisitions have shaped an ecosystem that
is currently seen as the most diverse and encounters people in many everyday life situations. A
constant focus on global expansion and untapped business and niche segments contributes to
its overall success (Willenborg 2016). The development of the hybrid model increases demand
and affects the growth of revenue outside the core business or online retail. The ANOVA model
tested the impact of member growth on the platform's total revenue. A strong correlation was
found between revenue growth and the number of members, i.e. Multiple R = 0.99756. The
coefficient of determination or Adjusted R Square is 0.99375 (for arrays less than 30
frequencies), and Standard Error 203308.44. The results of the Significance F analysis indicate
a large impact of the independent variable on total revenue, i.e. the P-value of the member’s
variable is 0.000136, at a significance level of 0.05, which means that the independent variable
Members significantly affects the trend of total revenue. The ANOVA model also tested the
impact of the trend in the number of members on the net profit of the platform. The results of
the analysis showed a weak correlation between the trend in the number of users and net profit,
i.e. Multiple R = 0.70256. The coefficient of determination Adjusted R Square = 0.32437 is not
sufficient for accurate interpretation of the results, which indicates a large deviation from the
mean regression values. Significance F = 0.18580, which indicates that there is no variable that
significantly affects net profit, i.e. the value of P-value for the independent variable Members
was 0.18580, at the level of significance of 0.05, which means that it does not significantly
affect independent variable.

Table following on the next page

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Table 4: Regression analysis

SUMMARY OUTPUT

Regression Statistics
Multiple R 0,99765333
R Square 0,99531216
Adjusted R Square 0,99374955
Standard Error 203308,444
Observations 5

ANOVA
df SS MS F Significance F
Regression 1 2,6328E+13 2,6328E+13 636,9536 0,000136414
Residual 3 1,24003E+11 41334323577
Total 4 2,6452E+13

Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95,0% Upper 95,0%
Intercept -10545963,2 826501,4923 -12,7597631 0,001039 -13176259,83 -7915666,59 -13176259,83 -7915666,59
Members 200702,732 7952,42159 25,23793912 0,000136 175394,5772 226010,8867 175394,5772 226010,8867

Source: own illustration

The results of the analysis with the ANOVA model prove a significant correlation between the
increase in the number of users and the increase in total revenues. Also, the results of the
analysis show a weak correlation between the trend of the number of users and net profit, i.e.
the increase in the number of users does not significantly affect net profit. The growth in the
number of users is digressive, and revenues during the crisis grew at a lower rate than the growth
before the crisis. The platform invested in the diversification of activities, which resulted in an
increase in costs that could not be offset by an increase in the number of users, i.e. the growth
in the number of users did not affect the proportional growth of total revenues.

5. CONCLUSION
The results of the research proved that the crisis related to the Covid 19 pandemic significantly
affected the overall financial result of the platform. Total revenues grew, but gross profit was
negative already in the first year of the Covid 19 pandemic. The basic results of the research
are contained in five points:
• Cost of revenue grew faster than revenue, and gross profit was negative.
• The Covid 19 global pandemic has significantly affected operating and net income
platforms.
• In the analysed period, the revenues of the platform increased almost three times more than
the number of members.
• At the beginning of the crisis, the growth trend of the number of members changed. The
beginning of the crisis had a positive effect on the growth of the number of members, but
the following year this growth returned to the standard model.
• Testing using the ANOVA method proves significant significance of the model, i.e. the
increase in the number of members significantly affects the platform's revenues.

In the context of the first research question, it can be concluded that the crisis had a significant
impact on the overall financial results. Total revenues grew steadily, but total costs grew faster
than total revenues. Net profit was negative in the last two analysed periods and increased
significantly in the last period. Total revenues grew by an average of 19.63% per year, but the
cost of revenue grew by an average of 20.18%. Diversification of operations and alimony of
income from hybrid forms of business was not enough to amortize the operating costs
associated with the Covid 19 crisis. Business losses increased after Rakuten started introducing
a new mobile network.

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They ballooned to a loincloth-stretching 225 billion Japanese yen (US$2 billion) last year, more
than doubling the 2020 figure, even though group revenues grew 15.5%, to nearly JPY1.7
trillion ($14.7 billion) (Morris 2022). In 2019, Mikitani invested $5.5 billion to launch a new
telecom network and disrupt Japan’s three-way mobile phone oligopoly: KKDI, NTT Docomo
and Japanese billionaire Masayoshi Son’s SoftBank by providing a cheaper and more flexible
network called radio access network (RAN) (Leung 2021). The crisis caused by the pandemic
has affected corporations differently in the platform economy model. Groupon operated with
losses and they increased in the crisis (Lozić et.al. 2021), while eBay had a continuous growth
of revenues and revenues grew during the Covid 19 pandemic (Lozić 2021). In the context of
the second research question, the research results did not prove a stronger impact of the crisis
on the trend in the number of users. Before the pandemic, the number of users grew
digressively, and at the beginning of the 2019 crisis, this trend changed. In this context, it can
be concluded that the crisis has had a positive effect on the trend in the number of users.
However, in the following period the trend changed and returned to the digressive model as
before the appearance of Covid 19. The change in the trend was short-lived, and the growth in
the number of users in the last analysed period was the smallest. At the beginning of the
pandemic, a new mobile network was developed on the platform, which attracted a new number
of users of the Rakuten ecosystem, but the trend has stabilized recently. Brokerage houses
expected losses in the next three years after the introduction of the new mobile network (Simms
2019), as evidenced by the results of financial analysis. The test results with the ANOVA model
prove a significant statistical correlation between revenue and the number of users, i.e. a
significant impact of the increase in the number of users on the increase in total revenue at the
significance level of 0.05. However, from the results of the financial analysis it can be
concluded that the operating costs associated with the Covid 19 crisis have also increased
significantly. The results and analysis of the research can be the basis for future research related
to the platform's operations.

LITERATURE:
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 83rd International Scientific Conference on Economic and Social Development - "Green Marketing" – Varazdin, 2-3 June, 2022

8. Leung, R. (2021). „Hiroshi Mikitani Gains $760 Million After Rakuten's First Mobile
Network Deal in Europe“. Forbes.com. https://www.forbes.com/sites/rubyleung/2021/
08/05/hiroshi-mikitani-gains-760-million-after-rakutens-first-mobile-network-deal-in-euro
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Economic and Social Development – „Digital Transformation and Business“, pp. 186-194.
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of postmodern: future of entrepreneurship or adaptation to development of postmodern
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"Building Resilient Society". Zagreb, pp. 578-590.
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21st Century Economy, Applico, LLC. ISBN 9781250091895.
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Lightreading.com. https://www.lightreading.com/5g/rakuten-says-losses-to-shrink-eyeing-
10000-site-5g-rollout-in-2022/d/d-id/775281. [28.02.2022.]
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Networked Markets are Transforming the Economy and How to Make Them Work forYou,
W.W. Norton & Company Ltd. ISBN 978-0-393-24913-2.
16. Rifkin, J. (2015). The zero marginal cost society: The Internet of things, the collaborative
commons, and the eclipse of capitalism, Palgrave Macmillan, St. Martin's Press LLC. ISBN
978-1-137-28011-4.
17. Rosen, S. (2021). „Here's How You Can Get 15% Cash Back This Week From Some Big
Online Stores“. NextAdvisor.com https://time.com/nextadvisor/in-the-news/rakuten-cash-
back-deal-may-10/. [28.02.2022.]
18. Schiliro, A. (2013). „E-Commerce companies: World 2013 - 2018 Trends“. Corporate
strategies. Paris: Xerfi Global.
19. Simanjuntak, H.; Sibarani, N.; Sinaga, B. & Hutabarat, N. (2015). „Web mining on
indonesia e-commerce site: Lazada and Rakuten“. International Journal of Database
Management Systems (IJDMS) Vol.7, No.1, pp. 1-13.
20. Simms, J. (2019). „Japan's Richet 2019: Rakuten's Mikitani Bets $5.5 Billion To Shake Up
Telecom Industry“. Forbes.com. https://www.forbes.com/sites/jsimms/2019/04/10/japans-
richest-2019-hiroshi-mikitani-aims-to-disrupt-japans-telecom-industry-with-rakuten-
mobile/?sh=1330d37c3a6d. [28.02.2022.]
21. Statista.com. https://www.statista.com/topics/5374/rakuten/#dossierKeyfigures.
[08.03.2022.]
22. Strategic directions (2018). „Has digital retail won? The effect of multi-sided platforms on
the retail industry“, Vol. 34, No. 3. pp. 4-6. 000, doi. 10.1108/SD-12-2017-0191.
23. Sutton, F. (2021). „Rakuten TV launches new channels in Spain, Italy and France“.
Rapidnewtv.com. https://www.rapidtvnews.com/2021111861598/rakuten-tv-launches-new
-channels-in-spain-italy-and-france.html#axzz7LAdaQQII. [28.02.2022.]
24. Taylor, P. (2022). „Rakuten (Formerly Ebates) Review 2022: How Does it Work? Is it
Legit?“ PTmoney.com. https://ptmoney.com/ebatescom-review-save-money-when-shopp
ing-online/. [28.02.2022.]

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25. Thau, B. (2014). „Rakuten’s global ambitions: Japan’s biggest e-commerce player uses
third-party marketplace model to expand“. https://chainstoreage.com/news/rakutens-
global-ambitions. [16.02.2022.]
26. Walter, A. & Zhang, X. (2012). East Asian capitalism: Diversity, continuity, and change.
Oxford University Press. ISBN-13: 9780199643097.
27. Willenborg, T.S. (2016). „Rakuten: A Case Study on Entering New Markets Through an
Innovative Business-to-Business-to-Consumer Strategy“. (ed.) Seagers, R.T. Multinational
Management, pp. 203-220. DOI 10.1007/978-3-319-23012-2-11.
28. Yu, S. (2021). „The CMO'S New M.O.: How Dana Marineau Is Building A Culture of
'Optimism' At Rakuten“. Forbes.com. https://www.forbes.com/sites/soonyu/2021/11/
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?sh=1e8dcf0a1556. [28.02.2022.]

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 83rd International Scientific Conference on Economic and Social Development - "Green Marketing" – Varazdin, 2-3 June, 2022

ENTREPRENEURIAL ACTIVITIES OF UNIVERSITIES – CASE OF

SLOVAKIA
Miroslav Sipikal
University of Economics in Bratislava, Slovak Republic
miroslav.sipikal@euba.sk

ABSTRACT
The roles of universities have long been limited to research and education, but their role is
increasingly understood in various areas. One such area is the entrepreneurial activity of
universities. While in many countries, especially in the United States, this concept is close to
universities, in the countries of the former socialist bloc, where universities were primarily
focused on education, their activities towards entrepreneurship are still in their infancy. The
aim of our article was to analyse the development and structure of income from entrepreneurial
activities of universities in the context of overall university funding in the case study of the
Slovak Republic. The article analyses the 10-year development of financial income of
universities from business activities in Slovakia. The data were drawn from the financial
statements of individual universities as well as their annual reports. These data were
statistically evaluated by comparative analysis. The research results show that despite the
relatively significant changes and support of business activities of universities by the
government in the recent period, so far there is only an improvement in the available inputs
needed for these activities but is not reflected in the financial income from these activities. The
results point to the need for further changes and finances that would lead to higher
commercialization of the institutions' own activities. The key activities on the part of the
government can be considered taking into account existing business activities in the breakdown
of direct subsidies and project support more strongly directed to the outputs of the
commercialization of research, not only to finance inputs.
Keywords: Entrepreneurship, Universities funding, Slovak Republic, Budget of universities,
Higher Education

1. INTRODUCTION
In the developed countries of Western Europe and the United States, the role of universities has
long been perceived not only as a tool for education or research, but various theoretical concepts
such as the triple helix model point to several other important tasks such as the role of
universities in regional development. One such task is the entrepreneurial activity of
universities. Developments show that universities have become increasingly entrepreneurial
and are often key in building regional innovation systems (Etzkowitz and Zhou 2017). In
socialism, universities in Central European countries have traditionally focused primarily on
education and, to a lesser extent, research (Kwiek, 2012). Entrepreneurship was not a natural
part not only of universities but also of the companies themselves. In addition, they did not have
sufficient resources to allow them to decide more freely on their research and commercial
activities. In addition, universities in the first decade of the transition period were largely left
on their own, autonomous but severely underfunded, and engaged much more in teaching than
in knowledge production (Kwiek, 2012). Over the last 10 years, mainly due to the impact of
EU accession and the use of EU resources, as well as governments' efforts to integrate the
Central European area into the European Research Area, a significant amount of funding has
been channelled to support the entrepreneurial role of universities. The aim of our article is to
analyse the development and structure of income from business activities of universities in the
context of overall university funding in the case study of the Slovak Republic. In the first part
of the article, we will deal with the theoretical basis of understanding the business university.

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Subsequently, we will analyse how these starting points in practice translate into the actual
results of universities on the case studies of universities in the Slovak Republic, which is often
considered the worst in the evaluation of performance of universities in Central Europe (Kwiek,
2012).

2. THEORETHICAL BACKGROUND
It is no longer enough for universities to focus only on education and research to achieve
economic growth and competitiveness of countries or regions. As the practical implications of
research arise ever closer in time to the making of a discovery, it leads all actors (universities,
companies, and governments at different levels) to explore ways for knowledge producing
institutions to make a greater contribution to the economy (Etzkowicz and Zhou 2017). Several
theoretical concepts have begun to emphasize these other roles for universities. One of these
concepts was the triple helix model (Leydesdorff and Etzkowitz, 1998), which brought to the
forefront the interconnection of the activities of universities, industry, and government, while
the institutions in question must take on the roles of their partners in addition to their traditional
tasks. Thus, universities should not only fulfill their traditional tasks, but also business tasks
traditionally assigned to companies. “The capitalization of knowledge is the heart of this role
for the university, linking universities to users of knowledge more tightly and establishing the
university as an economic actor”. (Etzkowitz and Zhou, 2017). As a result, the emerging role
of a entrepreneurial university is dichotomous, focusing both innovation and entrepreneurship
that contributes to innovation, competitiveness, and economic growth (Audretsch 2014).
However, there is quite different views on what is entrepreneurial university. In its narrow
interpretation, it is synonymous of commercialisation of intellectual property originated from
university resources. In broad sense, it could be any commercial activities of universities. So in
addition to the commercialization of our own research, we could include there activities as
contract research, building our own institutions more involved in business activities such as
science parks or incubators, practice counseling, spin off activities or even teaching
entrepreneurial skills (Rothaermel et al. 2017; Pugh et al. 2018). In most developed countries
of Western Europe or United States, more traditional entrepreneurial university functions such
as technology transfer offices, spin offs or academic entrepreneurship are well explored and
show the importance of these activities for economic and innovation activities of the region or
state (Audretsch, 2014). In the countries of Central and Eastern Europe, where the
transformation process of universities is still ongoing, these processes are often only in the
beginning (Kwiek, 2012; Némethová and Glittová, 2021; Prokop et al. El 2018), whereas, due
to the very different external conditions compared to Western countries, this process is
considerably more complicated. There are differences in several respects. Perhaps most
importantly, while these developed countries have innovation driven growth, in the case of
Central and Eastern European countries it is more efficiency-driven growth (Kwiek, 2012).
There is a large share of FDI in countries that does not make a primary effort to support research
activities that are allocated in home countries (Ranga and Etzkowitz, 2011). Research has not
been a priority in the transformation of universities either. Rather, they were pushed into a
massive expansion of educational capacity, as the number of university students increased
significantly in the first 10 years after the fall of socialism (Ranga and Etzkowitz, 2011). These
conditions may thus limit the meaningfulness of supporting the business role of universities.

3. METHODOLOGY
Within the article, public universities with the status of a university in the Slovak Republic were
analysed. During the entire research period (2010 to 2020), there were 17 such universities in
Slovakia. We did not include in the evaluation directly state-funded universities such as the
Slovak Medical University, which have a very special status and conditions.

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At the same time, no private university in Slovakia has the status of a university. We obtained
data for the analysis mainly from the financial statements of universities for the period 2010-
2020, supplemented by data from their final reports. We then statistically evaluated these data.
We focused mainly on the development of key financial indicators in relation to university
business and the overall position of business in university financing.

4. RESULTS
During the period under review, the University of Slovakia began to focus more intensively on
the areas of possible commercialization of its activities. Likewise, in an effort to move from an
industrial society to a knowledge-based society, the government has begun to support the
entrepreneurial roles of universities more intensively. Government supports and provides
incentives for university that want to cooperate with industries, with the rationale that these
synergetic outcomes can have can spill over effects on economy. Public subsidy or in its
simplest form financial contributions from government has become a major source of financing
R&D collaborations (Prokop et al. 2018). From the sources of cohesion policy alone, the
government has invested more than 1 billion in supporting universities. More than a third of the
resources went to activities aimed at supporting the entrepreneurial role of universities, such as
supporting cooperation and joint research between companies and universities, building
excellence centers or university science parks, or supporting technology transfer (Némethová
and Glittová, 2021). This represents a significant increase over previous years. Many
universities have also developed several institutional tools to support this task, such as business
incubators, science parks and technology transfer centers. The patent activity of universities is
also slowly improving. In the last 10 years, they have obtained 28 patents registered in the
European Patent Office, 10 years before they were only 3. Despite the increase, compared to
neighbouring countries, it is very small, even if we take into account the relative size of the
countries (Némethová and Glittová, 2021). In the area of inputs for the fulfillment of
entrepreneurial role, we can talk about a significant increase in the capacity of universities.
However, if we look at the outputs, the trends are not so positive. In Table 1 we can see the
overall development of different types of income of the universities over the last 10 years.
Despite the growth of the total volume of revenues by more than 30%, the volume of revenues
from business activities had a much more modest increase and even fell sharply during the
pandemic crisis.

v th. EUR 2010 2012 2014 2016 2018 2020

Total revenues 600 395 656 581 696 699 733 289 749 252 792 154
Direct subsidies 451 426 493 783 540 581 570 477 579 517 644 699
Entrepreneurhip
revenues 63 222 64 544 61 520 63 437 66 716 44 846
Table 1: University revenues in the years 2010 to 2020.
(Source: own calculations based on annual reports of universities)

However, despite the increase in resources, this is still a relatively small total of funding
available to universities. In neighbouring Austria, for example, universities have € 6.5 billion a
year at their disposal. Here, too, public resources dominate, but they are much more diversified.
If we take the example of TU Wien, its budget was 392 mil. However, the direct subsidy
represented a significantly smaller share (below 70%) than in the case of Slovak universities.
At the same time, however, it received more than 90 million Euros from various foreign,
especially European grants (tuwien.at).

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Given that the increase in resources in Slovakia was primarily public resources, the share of
income from business activities has decreased over the last 10 years and, conversely, the
dependence of universities on direct subsidies has increased, as we can see in Figure 1.

Figure 1: Growth of selected university indicators in% (2010- base year)

(Source: own calculations based on annual reports of universities)

Only Pavel Jozef Šafárik University and Comenius University fell below the 75% share of
direct subsidies in total revenues. On the contrary, the worst results in this respect belong mainly
to humanities-oriented universities, where in a large part of them this share is around 90%.
Universities that had a lower share of direct subsidies also achieved a higher overall increase in
their budgets over the last 10 years. For example, the mentioned Comenius University increased
by more than 50%, Pavel Jozef Šafárik University by more than 82%, while the average
increase was less than 32%). This suggests that the differences between the universities are in
the overall control rather than in the set conditions. More efficient universities were able to
increase their budgets from both public and business sources. If we take a closer look at the
structure of entrepreneurial income, we find that income that is recorded as entrepreneurial is
not largely focused on the commercialization of knowledge, as a fundamental aspect of
entrepreneurial university, but the vast majority of income comes from student services such as
accommodation and catering. These incomes do not require any active approach from
universities, students often have no adequate option other than to use the services of the
university. So from the point of view of a theoretical understanding of the role of entreprenueral
university, we could not consider this as business income, even if such income is recorded in
this way. Direct revenues from the commercialization of own research are zero or almost zero
in all universities, even the most advanced ones, and despite the growing patent performance
of universities. The entrepreneurial revenue related to research activities is thus dominated not
by the commercialization of own research, but by contracted research for companies. However,
even these revenue volumes are very low compared to subsidies. In technically oriented
universities, they are around the level of 1 mil. Eur (Klasová et al. 2019). Experience from the
Czech Republic suggests that contract research is carried out significantly more by technical,
natural science and medical faculties (Tetrevova and Vlčková, 2019). This is similar in
Slovakia. There could be several reasons why this situation is not improving. Several studies
identify Hanová et al., 2016) different barriers related to unviersities entrepreneurship
activities related to research (Hanová et al., 2016; Jarjabková et al. 2019), specially in the area

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of cooperation with private companies or resources available for such activities. Except the
ones common for most of the countries, there are laso some specificies. One of the problems
for increasing revenues from research-oriented activities is the setting of direct subsidies by the
government. This has shifted from dominant funding for education to a better balance between
funding for research and education. However, the research funding itself is still based mainly
on the publishing activities of universities, not on business activities leading to the
commercialization of research or patenting. Universities are thus indirectly motivated to prefer
other tasks. Another limiting factor holding back academic entrepreneurship is the
administrative demands relating to the high level of bureaucracy in this country which is typical
for post-communist countries (Tetrevová a Vlčková, 2019). Researchers often have personal
contacts with companies and work with them outside the academic environment, as it is easier
for them, so universities lose additional income. Government support has been significant in
recent years, but largely focused on financing inputs (buildings, research infrastructure).
However, there was a lack of focus on the outputs of these processes (such as patents, licencing
etc.) as well as the provision of adequate support so that these outputs can be achieved (eg by
ensuring the support of human resources at universities).

5. CONCLUSION
The research results show. that despite the relatively significant changes and support of business
activities of universities by the government in the recent period, so far there is only an
improvement in the available inputs needed for these activities but is not reflected in the
financial income from these activities. On the contrary, universities have become increasingly
dependent on direct government subsidies. The structure of business activities is also primarily
focused on student services, not the commercialization of one's own knowledge. This points to
the need for further changes and resources to help universities move to the level of
entrepreneurial university that, according to theoretical concepts, is necessary to ensure the
contribution of the university to the creation and distribution of knowledge and innovation. The
key activities on the part of the government can be considered taking into account existing
business activities in the breakdown of direct subsidies and project support more strongly
directed to the outputs of the commercialization of research, not only to finance inputs.

ACKNOWLEDGEMENT: This contribution was supported by the Scientific Grant Agency

VEGA under the contract No.1/0605/19 – New role of universities in regional innovation
systems.

LITERATURE:
1. Audretsch, D. B. (2014). From the entrepreneurial university to the university for the
entrepreneurial society. The Journal of Technology Transfer, 39(3), 313-321.
2. Etzkowitz, H., & Zhou, C. (2017). The triple helix: University–industry–government
innovation and entrepreneurship. Routledge.
3. Davey, T., Rossano, S., & Van Der Sijde, P. (2016). Does context matter in academic
entrepreneurship? The role of barriers and drivers in the regional and national context. The
Journal of Technology Transfer, 41(6), 1457-1482.
4. Guerrero, M., Urbano, D., Fayolle, A., Klofsten, M., & Mian, S. (2016). Entrepreneurial
universities: emerging models in the new social and economic landscape. Small business
economics, 47(3), 551-563.
5. Hanová, M., Moravčíková, D., Rehák, Š and Vozár, L., 2016. Posilnenie úlohy
vysokých škôl v regiónoch. Bratislava: Ministerstvo školstva, vedy, výskumu ašportu
Slovenskej republiky

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6. Klasová, S., Korobaničová, I., & Hudec, O. (2019). University-industry links in Slovakia:
What are the factors underlying the number of interactions with industry? Quality
Innovation Prosperity, 23(1), 102-118.
7. Kwiek, M. (2012). Universities and knowledge production in Central Europe. European
Educational Research Journal, 11(1), 111-126.
8. Jarábková, J., Chrenekova, M., Roháčiková, O. (2019). University and practice–
cooperation in research and science: case study of the slovak university of agriculture in
Nitra. Quality Innovation Prosperity, 23(1), 136-154.
9. Némethová V., Glittová K. (2021). Úlohy univerzít v regionálnych inovačných systémoch,
Ekonóm
10. Leydesdorff, L., & Etzkowitz, H. (1998). The triple helix as a model for innovation
studies. Science and public policy, 25(3), 195-203.
11. Prokop, V., Odei, S. A., & Stejskal, J. (2018). Propellants of University-Industry-
Government synergy: Comparative study of Czech and Slovak manufacturing
industries. Ekonomický časopis , volume 66, issue: 10.
12. Pugh, R., Lamine, W., Jack, S., & Hamilton, E. (2018). The entrepreneurial university and
the region: what role for entrepreneurship departments?. European Planning Studies, 26(9),
1835-1855.
13. Ranga, M., Etzkowitz, H. (2011). Creative Reconstruction: A Triple Helix–Based
Innovation Strategy in Central and Eastern Europe Countries. In Theory and Practice of the
Triple Helix Model in Developing Countries (pp. 265-298). Routledge.
14. Rothaermel, F. T., Agung, S. D., & Jiang, L. (2007). University entrepreneurship: a
taxonomy of the literature. Industrial and corporate change, 16(4), 691-791.
15. Tetřevová, L., & Vlčková, V. (2019). Academic Entrepreneurship in the Czech
Republic. Ekonomický Časopis, 67(9), 995-1010.

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 83rd International Scientific Conference on Economic and Social Development - "Green Marketing" – Varazdin, 2-3 June, 2022

THE ACRONYM AS A BRAND NAME: WHY CHOOSE IT FOR THE

NAMING OF THE BRAND AND WHY NOT CHOOSE IT IN ANY
CASE?
Arpad Ferenc Papp-Vary
Budapest Metropolitan University, Hungary
apappvary@metropolitan.com

Rita Lukacs
Budapest Metropolitan University, Hungary
rlukacs@metropolitan.hu

ABSTRACT
Initials are used extensively in branding to shorten long company names. Marketing literature
often highlights the need for memorable and distinctive brand names that can convey meaning
successfully and are also easy to pronounce. But how well do initials serve these purposes? Are
they the right solution to name brands? As the paper shows, they do not serve the
abovementioned purposes very well – actually, almost not at all. Yet, many companies use
acronyms as brand names, and start-ups also often choose to use them. But what are the
possible reasons and motivations for this? What are the pros and cons of using acronyms as
brand names? When should brand owners use such brand names and when should they avoid
this solution? It is worth examining this from a broader perspective. Therefore, in addition to
discussing the relevant marketing and branding literature, the paper also presents several
examples that shed light on the advantages and disadvantages of acronyms used in brand
naming.
Keywords: Brand name, brand naming, acronyms, initials, branding strategy, marketing
strategy

1. INTRODUCTION
The key role of the brand name is best illustrated by the fact that some authors argue that it is
the most important marketing decision a company can make (Hillenbrand et al 2013; Kohli et
al 2005; Robertson 1989; Ries – Ries 2009; Rivkin – Sutherland 2004; Papp-Váry 2020). Keller
emphasised that the brand name is a fundamental brand asset that can play a critical role in
creating customer-based brand equity (Keller 2003). Therefore, it is essential for marketers to
have a good understanding of the principles that guide the creation of brand names. One of the
essential characteristics of a good brand name is its memorability. The simplicity of a brand
name helps brand recall, so it is important to use brand names that are easy to pronounce, spell,
read and understand (Robertson, 1989). In addition, some authors argue that a brand name
should be familiar and meaningful, i.e. it should be able to create a visual reference in the mind
of the consumer (Athaide – Klink 2012; Keller et al 1998; Kohli et al 2005; Robertson 1989).
Meaningful brand names convey relevant information, an important brand attribute or benefit
about the product, and create a link between the brand and the product category (Keller et al
1998). Empirical studies show that people recall words that are rich in meaning more easily
than words with low visuality. Furthermore, brand names that evoke strong, positive emotions
are more easily recalled. Previous research also indicates that brand names should be distinctive
(Robertson 1989). Charmesson (1985) considers the same to be the most important attribute of
a brand name in terms of legal, memory and positioning benefits. A brand name can play a key
role in conveying a set of positive, powerful and unique brand associations (Keller 2003), and
meaningful brand names create immediate positive associations (Keller et al 1998, Kovács
2019).

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Moreover, empirical studies also suggest that meaningful brand names are generally preferred
by people over non-meaningful brand names and have higher overall liking rates (Kohli – Suri
2000). Even after repeated exposure, meaningless brand names may be perceived less
favourably, although research shows that repeated exposure confers greater benefits to
meaningless brand names (Kohli et al 2005). At this point, it is important to note that we can
distinguish between names (personal names; vocabulary words; meaningless names) and
initials. Initials usually denote the abbreviation of a name that is too long or too difficult to
pronounce. Previous research has shown that initials are generally more difficult to pronounce
and thus more difficult to remember (Robertson 1989). In addition, initials do not convey a
message as they have no inherent meaning and as such, they are not particularly motivating or
memorable (Keller et al 1998). Therefore, it is important to make the name of the organisation
known before the company uses its initials to create an acronym, to ensure that consumers
already have a reference for the brand name. Without this, an acronym-type brand name will
be difficult to distinguish (del Río et al 2001; Petty 2008; Middleton 2004). Initial letters should
also be avoided because our memory cannot store sets of letters lacking an obvious meaning
without considerable effort, as discussed earlier. In fact, initial letters are usually meaningless,
which is especially true for abbreviating and simple initials. There is certainly some benefit to
initials as they make it easier for consumers to read and pronounce a long name. However,
brands using initials need more time and support to build brand awareness and convey the
desired associations (Keller et al 1998). Although the marketing literature – as can be seen from
the above – makes quite many arguments against acronyms as brand names, their use in practice
is still very widespread. In the following sections, we will discuss the possible reasons for this.
We will look at the arguments for and against the use of acronyms. This will be supported by
many examples so that a clear conclusion can be drawn at the end of the article: is it worth using
acronyms or should we avoid them as much as possible?

2. WHY ACRONYMS ARISE AS BRAND NAMES

For several start-up companies, the idea of creating a name in the form of an acronym or
abbreviation may emerge as a possibility. Entrepreneurs can see many big companies around
them with such names, including BP, BBC, BMW, EY, HP, H&M, IBM, ING, KFC, MTV,
PWC, RTL and many more. This is certainly true, but they fail to consider that these companies
were not originally acronyms and still have their full names: British Petrol, British Broadcasting
Corporation, Bayerische Motoren Werke, Ernst and Young, Hewlett-Packard, Hennes and
Mauritz, International Business Machines, Internationale Nederlanden Groep, Kentucky Fried
Chicken, Music Television, PricewaterhouseCoopers, Radio Télévision Luxembourg. But it is
another thing – and usually not a good idea at all – to create an acronym at the birth of a brand.
Let us examine the case of KMX, for example. Only a few people have heard about it, even
though it was the Coca-Cola Company's original attack on Red Bull in the energy drink category
(Ries -Ries 2002). Then they realised that it was not such a good name, and now prefer Burn as
the brand name, which has had much greater (although not overwhelming) success. Similarly,
when Royal Philips Electronics named one of its new companies NXP, people wondered what
the hell those letters stood for, rather than buying its products (Ries – Ries 2009). But probably
the funniest example is a British company that took the name ICL. Why this one? Because it
uses one of the letters of IBM, one letter forwards and one letter backwards (Olins 2004). Then
they wondered why they had not become as successful as IBM. As Rivkin and Sutherland point
out (2004), the biggest mistake a company can make is to use acronyms like USG, SLM, SPX.
This is also backed up by research: acronyms are remembered 40% less often than normal or
made-up names (Rivkin – Sutherland 2004).

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There are several reasons why they are so popular (with companies, not consumers, of course):
1) First of all, one of the first brands (or at least logos) was SPQR, which was often used by
the Roman Empire.
2) Secondly, the world's best-known word, OK, is also an abbreviation. True, not many people
know this, despite the fact that (once again): it is the most well-known word in the world.
The abbreviation (first used in 1839 in Boston, Massachusetts) comes from the fact that it
was used in connection with the checking of printed publications, stating that everything
was perfect, i.e. "all correct". Of course, they made a joke of it, so it became "oll korrect"
and "OK", which is still used today to indicate that something is alright.
3) Thirdly (and most importantly), acronyms are as attractive to most companies as candlelight
is to a butterfly. The success of IBM is testimony to the effectiveness of acronyms made up
of initials (Ries – Trout 1997). Then they continue: At least seemingly. On closer
examination, this is a typical case of confusing cause with effect. International Business
Machines became so rich and famous (cause) that everyone knew which company it was
(effect) just by looking at the initials. It does not work the other way round. If you have a
not-so-successful company and you christen it with an acronym made up of the initials of
its name (cause), you cannot expect it to become rich and successful (effect).
4) Fourth: “What makes big companies commit corporate suicide? For example, the situation
when top executives are so used to seeing the company's initials on internal letters and
memos that they naturally think everyone knows good old VF.” (Ries – Trout 1997, 84.)
Nevertheless, a company has to be exceptionally well known to start using its initials
successfully. The initials of GE recall the name General Electric in our minds. (Ries – Trout
1997, 85.)

It should be added that Al Ries and Jack Trout, who have just been quoted several times, are
quite anti-acronym. But so are others: according to Kapferer (1985), companies should avoid
the 'initials disease', one of the most serious 'diseases' of brand names. Watkins agrees, arguing
that an acronym can only confuse consumers, or as he puts it, an acronym can cause "WTF
confusion". (Watkins 2019) But it is not entirely true that an acronym cannot make a company
successful, just let us look at Interbrand's ranking of the top 100 most valuable global brands
(Interbrand 2022). There are several acronyms on the list: BMW, IBM, SAP, UPS, DHL and
KFC among three-letter brands, and LMHV, IKEA and HSBC among four-letter brands. Of
course, as Olins notes (2004, 110-111.), “it is almost perverse that the bank has chosen the name
HSBC for itself. [...] What were they thinking when they chose the name? Perhaps they were
thinking that if one can get by with a name like HSBC, one can certainly get by with anything.
[...] The name HSBC sounds rather bad, but the truth is that the firm's strong, powerful and
attractive appearance has, for some strange reason, made the inconvenience of the name seem
unimportant.” And what does HSBC stand for? Hong Kong and Shanghai Banking Corporation
– all the more surprising because the company originated in Scotland. Or there is LVMH, which
is less familiar to consumers in this form since it is a group of companies, which is an
abbreviation of Louis Vuitton – Moët Hennessy. However, we are probably already familiar
with the brands it produces in the wine and spirits sector: Moët & Chandon, Chateau d'Yquem,
Henessy, Hine and Krug, among others. Its brands from the fashion and leather goods industry
include Marc Jacobs from the US, Loewe from Spain, Kenzo from Japan, Givenchy from
France and Thomas Pink from the UK. Its perfume and cosmetics companies, on the other hand,
are almost exclusively French: Givenchy, Guerlain and Dior. Its most famous watch and
jewellery manufacturer is TAG Heuer. Last but not least, the LVMH group also includes
retailers such as Le Bon Marché and La Samaritaine (Olins 2004).

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3. WHEN ACRONYMS CAN WORK

So can acronyms ever work? Well, in some cases, yes. But its limitations are broad. So let us
look at these cases.

3.1. If the brand becomes so well-known that you can use the acronym after a while
"Once you've made it to the top and everyone knows you, you can use your initials without the
slightest misunderstanding. Franklin Delano Roosevelt and John Fitzgerald Kennedy could
only use their initials once they were famous. Not before." (Ries – Trout 1997, 83.) As we have
already seen, the same is true of the often-cited example of IBM: it first became famous as
International Business Machines and then started using just the name IBM. This, of course, was
also influenced by another factor described in the next paragraph.

3.2. If the physical product bears the abbreviation itself

This is particularly the case for machinery and technical goods: since the surface area available
for this purpose may be small, the abbreviation is displayed on the product, while the full name
is displayed on the packaging or in communication (at least in the early days). For example,
Hewlett-Packard put only the HP logo on its printers, monitors, etc. after a while. JVC was
originally Victor Company of Japan, but it would have been difficult to put that on video
players, hi-fi towers and so on – or, to be more precise, the letters would have been very small.
The name of the watch brand Q&Q stands for quality and quantity. It is the same for motors
and cars. Does Motorradwerk Zschopau (motorcycle factory in Zschopau) mean anything to
you? But MZ probably does, since it is on the motorcycle's tank. What about Industrieverband
Fahrzeugbau (Vehicle Industry Association)? Well, that is IFA. While the abbreviation may
have been displayed on the vehicle, the full name had no chance. As was the case with
Bayerische Motoren Werke, or BMW – even if they spelled out the full name in their first logos,
they still had the BMW abbreviation next to it. However, it is important to note that while this
solution works for vehicles and technical goods, it is less successful in other cases. There are
exceptions, of course: in the case of the TGI Friday's restaurant chain, TGI marks the start of
the weekend: Thank God It's Friday.

3.3. If consumers themselves start to shorten the name

We live in an age of abbreviations. People like to communicate as briefly as possible, especially
in writing, but also orally. That is how Los Angeles becomes L.A. – because it is convenient
and sounds good. But San Francisco does not become S.F. – because it is terrible, and there is
a much better short name: Frisco. The same is true for companies. Two American giants that
everyone knows are now known by their acronyms: GM (for General Motors) and GE (for
General Electric). Federal Express, however, has not become FE, because it has two syllables
(ef-ee) just like Fedex. Moreover, the latter also functions as a verb: to fedex. ‘To FE’, on the
other hand, sounds rather strange. Moreover, the consumers’ suggestion to use the abbreviation
Fedex was welcomed by Federal Express executives for several reasons. "Research has also
shown that the word 'federal' carries a negative connotation in some countries, and in Asia, it is
difficult to pronounce the »r« and »l« sounds." (Healey 2009, 89.)

3.4. If the full name of the brand would be unfortunate because it conveys something that
the company no longer wants to emphasise
Indeed, there are examples of this. Take British Petroleum, which had problems with both
words in its name. On the one hand, the company was becoming increasingly international and,
on the other, the reception of the word British was very bad in the case of many former colonies.
So it became Beyond Petroleum, which means ‘beyond crude oil’. As Olins points out (2004,
p. 109), ‘the company wanted to be one of the leaders in the struggle for a liveable, habitable

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environment’. To this end, it has agreements with a number of major universities to ‘develop
strategies and technical solutions for developing greener, cleaner energy sources’. The
company's advertising, new logo, redesigned petrol stations, extensive research, the educational
programmes built on it and its sponsorship of art performances are all designed to showcase the
new BP brand. Yes, BP, because in the meantime they have realised that the word Petroleum is
not necessarily a lucky choice either. Or there is the case of Kentucky Fried Chicken, officially
KFC since 1991. The company wanted to get rid of the word 'fried' in the first place, since at
one time (and even today) the word 'fried' was not associated with healthy eating (Morris 2004,
44). Of course, rumours also started that they had actually switched to KFC because the
authorities had banned them from using the word chicken. Indeed, according to the critics, what
is served in these fast-food restaurants is not chicken or at best 'Frankenstein chicken', some
kind of a freak. As for the causes for using KFC, there was another reason besides the
elimination of the word ‘fried’: the stock market abbreviation for shares was three letters, and
they were preparing to enter it at that time. In the case of Lucky Goldstar, there was another
reason to switch to LG, or more specifically LG Electronics. Presumably, it was because Lucky
had previously been a household appliance brand, while Goldstar had been a consumer
electronics brand not popular for its quality but for its low prices. However, they wanted to
position LG higher up.

3.5. If the acronym is easy to pronounce, it can stand on its own

In the 1960s, a fascinating book on abbreviations was published. Abbreviations and Related
Acronyms Associated with Defense, Aeronatics, Business and Radio-electronics was the full
title, but the acronym version was even funnier: ABRACADABRA. Yes, acronyms can work
quite well if the acronym is like a real brand name. That is, it is not a string of difficult-to-
pronounce consonants next to each other, but a snappy, pleasant-sounding word with vowels.
Some sources use the term acronym for this, meaning that it can be pronounced as a word
without having to be spelled out – as opposed to, for example, an acronym consisting of
consonants only. (Yadin 2002; Bloom 2000; Flowers 2020) Other authors, by contrast, do not
distinguish between the two uses (Miller 2019; Middleton 2004). But let us look at the
examples! First, there is IKEA – few people know that this is an acronym, but it is. It hides
founder Ingvar Kamprad, who originates from the family farm Elmraryd in the municipality of
Agunnaryd. That is how it becomes I.K.E.A. – but because it is pronounced well on its own,
they never used the version with the full stops, just IKEA. Then there is NATO, which stands
for North Atlantic Treaty Organization. NASA comes from the National Aeronautics and Space
Administration. In the case of other organisations, the acronym also has a meaning: MADD
stands for Mothers Against Drunk Driving, while CARE is an acronym for Committee for Aid
and Rehabilitation in Europe. But it is not at all necessary for the acronym to have a meaning.
If it sounds right, it can already be helpful. Although in the case of car manufacturers it is most
common to name the brand after the founder or the first engineer, there are examples of
abbreviations here too. But in these cases, care is taken to ensure that it stands on its own.
Fabbrica Italiana Automobili Torino is none other than FIAT. But the word fiat also means: a
moment. Alfa Romeo is half named after its owner, Nicola Romeo, but the first word is the
abbreviation of Anonima Lombarda Fabrica Automobili. The SAAB brand stands for Svenska
Aeroplan Aktiebolaget – yes, aircraft production because that was the company's main business
in the beginning. But in other areas, too, such abbreviations are used: ASICS sportswear stands
for "Anima sana in corpore sano", meaning "A healthy body in a healthy soul". Interestingly,
the original Latin form of the phrase is "Mens sana in corpore sano", but the MSICS
abbreviation is believed to have been inappropriate for the brand owners (Kovács 2019). FUBU
hip-hop clothing was originally called For Urban Brother United, then For Us By Us, which
was also used as a slogan.

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BASF (although not very catchy) is certainly better than the company's full name: Badische
Anilin- und Soda-Fabrik. Among the classic cameras, there is LOMO, which still has a large
fan base today. Photographers who use it share their pictures on websites such as
Lomography.com. Of course, they also know that it is the name of a former Soviet machine,
short for Leningrad Optical Mechanical Association in Russian. Or there is SPAR. Many people
shop here, but most do not know where the name comes from, or even think it comes from the
German word for "save". But that is not quite the case. The company is originally Dutch, and
its name was first DE SPAR, which stands for Door Eendrachtig Samenwerken Profiteren Allen
Regelmatig, meaning a free association of independent wholesalers and retailers organised into
a chain of stores. And the SPAR logo features a pine tree because that is what the word means
in Dutch. Then there are some acronyms that are not really acronyms at all, as they do not even
have to be written in all capital letters. They are more like acronyms created with the intention
to make something that sounds good. For example, the National Biscuit Company, founded in
1898, realised as early as 1901 that Nabisco was a much better choice for a name. For the
American Oil Company, Amoco is a clear and logical abbreviation. Qantas, short for
Queensland and Northern Territories Air Service, also sounds good. The name of Sabena,
another airline, includes the "initials" of Société Anonyme Belge d'Exploitation de la
Navigation Aeriénne. Airbnb originally started as "Air bed and breakfast", as the owners rented
out three inflatable beds. Well, the word ‘air’ remained, but ‘bed’ and ‘breakfast’ took on the
form ’bnb’. Toshiba, one of the world's first, if not the world's first, consumer electronics
company, started out as Tanaka Seizo-Sho in 1875, and five years later it entered a partnership
with Hakunestu-Sha. The former was then renamed Tokyo Denki, the latter Shibaura
Engineering Works. The merger of the two gave birth to the name Toshiba in 1939. Geico
stands for Government Employees Insurance Company. Adidas comes from the name of the
founder Adolf (Adi) Dassler. The name of Garmin, a GPS company, comes from the first name
of founders Gary Buller and Min Kao.

3.6. If the acronym is provocative

This is actually very similar to the previous point: the abbreviation has a meaning on its own –
in this case, a provocative meaning. The best known such company is French Connection U.K.
The abbreviation has been “used in correspondence between the company's "London and Hong
Kong offices" for decades. The parent company was abbreviated FCUK and the subsidiary
FCHK. The use of the almost-swear acronym for marketing purposes was the idea of an
advertising manager who recognised the potential of the situation. But what gave the mantra its
wit was that it was much more than a provocative acronym. FCUK fashion was not just one of
many witty T-shirt slogans; it became the company's new identity. Iain Webb, Elle's fashion
director, recalls: »When I first saw it [the FCUK fashion logo] I was shocked that such a short
advertising message could be so provocative. It perfectly expressed the culture-conscious tastes
of modern youth.« Fashion followers took the opportunity to express a personal message
through their brand choice. In four years, FCUK doubled its sales volume and tripled its
profits,” writes Wipperfürth in his book (2005, p. 100).

4. WHEN ACRONYMS DO NOT WORK

Based on the above, there are quite a few arguments for a company to choose an acronym, but
these are rather special situations. However, there are also many arguments against it:
1) There is no way of knowing what is behind the acronym. And it is safe to assume that when
consumers see it, they will guess. What is USG? And SLM? And SPX?
2) While the former long name meant something (or someone), the abbreviation no longer
does. Advertising agencies in particular fall into this trap. So J. Walter Thompson becomes
JWT, Doyle Dane Bernbach becomes DDB, Foote, Cone & Belding becomes FCB, Young

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 83rd International Scientific Conference on Economic and Social Development - "Green Marketing" – Varazdin, 2-3 June, 2022

& Rubicam becomes Y&R. But the client is confused: who is it working with, JWT, DDB,
FCB or Y&R? It is strange that advertising agencies seem to fail to understand the
importance of brand names.
3) Revenues are decreasing. When House and Garden, a magazine dedicated to home
decorating and gardening, was renamed HG in 1987, subscribers began cancelling in
droves, and in five years, the magazine was shut down. A decade later, the owner relaunched
the magazine. And under what name? House and Garden (Rivkin-Sutherland 2004).
4) The same acronym means several things. There is MTV, for example. In Hungary, it can
mean two brands, and both are TV channels: Music Television and Magyar Televízió
(Hungarian Television). Or there is the example of the WWF: some people associate it with
the World Wildlife Fund, but others do not associate it with animal protection at all, but
with wrestling, with the World Wrestling Federation. Therefore, the former has sued the
latter, which changed its acronym to WWE (which stands for World Wrestling
Entertainment), emphasising that it is part of the entertainment industry.
5) The acronym sounds unfortunate. As Wiseman writes (2009), people whose initials are PIG,
BUM and DIE die three years earlier than the average age. This could also be a lesson for
brands. "For example, when General Aniline & Fillém changed its name to GAF, it did not
take into account that gaf sounds the same in English as gaffe. The choice of the name GAF
was really a big blunder." (Ries-Trout 1997, 90.)
6) The specific combination of letters takes on a different meaning. It is also possible for an
abbreviation to gain a new meaning. For example, an ambulance service was called the
AIDS Ambulance Service. The term was used to refer to the following words: attitude,
integrity, dependability, and service. However, AIDS began to mean something else in
people's minds and they thought that the ambulance service only transported people with
the AIDS disease – and many people did not want to be treated together with people with
AIDS. So the name had to be changed and the ambulance service became AME (Rivkin-
Sutherland 2004).
7) People start making fun of the acronym. As a matter of fact, it is bound to happen anyway.
Not necessarily because the consumer is unaware of the meaning of the acronym, but
because there must be another, a funnier form of it.
• FIAT: ”Fix It Again Tony” (referring to the fact that FIATs need to be serviced
regularly)
• IBM: ”I Blame Microsoft” or ”I Buy Macintosh”
• SABENA: ”Such a Bad Experience, Never Again”
• SAP: ”Sanduhr Anzeige Programm” (referring to the long wait when charging)

All in all, the situation is that an acronym is more of a bad choice than a good one, and is only
recommended in exceptional cases. This is illustrated by the case of the brand name FYROM,
which for many years was the official international name of a European country. It is no wonder
that the country's leaders lobbied constantly in all forums to stop using it. And what did
FYROM stand for? Former Yugoslav Republic of Macedonia. That is, Macedonia – but they
were not allowed to communicate that name, mainly because of pressure from the Greeks: they
say that the southern part of Macedonia is in Greece. But the more important argument is that
the (brand) name Macedonia has a huge value: it is linked to Alexander the Great. And it makes
a big difference which country Alexandros is historically associated with, or what country is
visited by the tourists. So Macedonia had to use FYROM for a long time. In 2018, however,
there was a change: an agreement was reached with Greece, and the Macedonian parliament
voted to call the country North Macedonia. Which is, let us face it, certainly better than
FYROM.

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Or there is the brand name W&D, symbolizing the two founders: Wilsdorf and Davis. Of
course, with that name, the brand probably does not ring much of a bell. It has not really made
them famous. But they did become famous with the name they invented to conquer the global
luxury market: Rolex.

5. CONCLUSION
After all the examples, it is worth summarising what is in favour of using an acronym and what
is against it, or when it might be worth using it and when it might not. In addition to what has
been discussed earlier, we draw on the study by Machado and Pichaki (2015) here, who
conducted primary research in social media groups on branding, asking questions such as
whether the use of initials in brand names, logos and corporate identity is functional or
meaningless; whether respondents support the use of initials in branding; and what are the
factors of success and failure in the choice of initials for brand names. The following emerged
from the responses of the marketing and design professionals commenting:
When can you use acronyms successfully?
• Initials can greatly simplify very long or complicated company names; in this case, a
pronounceable abbreviation is recommended;
• Initials can be an effective re-branding technique for established, well-known brands and
companies;
• Initials are more flexible and can be better adapted to brand repositioning or brand
extensions;
• Initials can be effective when they are part of a holistic branding approach, where they are
used as an integral part of other brand elements;
• Initials are acceptable when they are used in combination with the actual name, in
conjunction with a logo (when a visual symbol complements the brand name);
• Initials sometimes resemble real words (e.g. France Connection UK – FCUK) which carry
meaning and can therefore be used to further develop marketing campaigns.

When to avoid acronyms:

• Initials are not easily recognisable if the brand they represent is not already known, as the
mere use of letters does not convey associations (in this sense, initials are meaningless in
themselves);
• Successful brand names and logos grab attention, arouse curiosity and contribute to brand
awareness. Initials have difficulty serving these purposes;
• Memorable names and logos contribute to brand recall; significant doubt arises if initials
are easy to remember;
• Brand names must be easy to pronounce and understand; initials do not facilitate these
aspects;
• The repetitive use and pronunciation of initials can lead to brand inconsistency and
controversy, as people forget that they are nothing more than literal abbreviations of the
company name;
• Initials cannot reflect brand values and therefore cannot be used strategically in branding;
• Initials favour anonymity over identity (individual characteristics);
• Initials should be avoided in the case of start-ups;
• Logos with initials are often very similar and therefore considered ineffective in creating
differentiated positioning;
• A separate graphic logo (or visual symbol) is considered more effective than a logo based
on initials; the former is memorable, likeable, and able to convey meaning, symbolism and
messages with high visual value, whereas abbreviations are not.

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As can be seen above, marketers, branding, creative and design professionals themselves tend
to argue that acronyms should be avoided. This makes it particularly surprising why many of
them still choose acronyms when it comes to brand naming. Further research is needed to
resolve this discrepancy, which may provide useful insights for both theorists and practitioners.

LITERATURE:
1. Addict blog 2011. Mit rejtenek a márkanevek? (“What do brand names hide?”)
http://addict.blog.hu/2011/11/24/mit_rejtenek_a_markanevek, Published: 24.11.2011.,
Retrieved: 01.11.2018.
2. Athaide, G.A. - Klink, R.R. 2012. Creating Global Brand Names: the use of sound
symbolism, Journal of Global Marketing, Vol. 25 No. 4, pp. 202-212
3. Bloom, D. A. 2000. Acronyms, abbreviations and initialisms. BJU International, 86. évf.,
pp. 1-6.
4. Charmesson, H. 1988. The Name is the Game: How to Name a Company or a Product,
Homewood: Dow-Jones-Irwin.
5. del Río, P. - Vázquez, R. - Iglesias, V. 2001. The role of brand name in obtaining differential
advantages, Journal of Product and Brand Management, Vol. 10 No. 7, pp. 452-465.
6. Flowers, B. 2020. The Naming Book – 5 Steps to Creating Brand and Product Names That
Sell. Irvine, Enterpreneur Media
7. Healey, M. 2009. Mi az a branding? (“What is Branding?”) Budapest, Scolar Kiadó.
8. Hillenbrand, P. - Alcauter, S. - Cervantes, J. - Barrios, F. 2013. Better branding: brand
names can influence consumer choice, Journal Of Product and Brand Management, Vol.
22 No. 4, pp. 300-308.
9. Interbrand 2022. Best Global Brands, https://interbrand.com/best-global-brands/,
Retrieved: 13.02.2022.
10. Kapferer, J.-N. 1985. Réfléchissez au nom de votre société, Harvard L’Expansion, No. 38,
pp. 104-118.
11. Keller, K. L. 2003. Strategic Brand Management: Building, Measuring, and Managing
Brand Equity, 2nd ed., Upper Saddle River, NJ: Prentice Hall
12. Keller, K-L. - Heckler, S. - Houston, M.J. 1998. The effects of brand name suggestiveness
on advertising recall, Journal of Marketing, Vol. 62, pp. 48-57
13. Kiss Csaba 2017. A Müszi legendája (“The legend of Müszi”). Marketingtitkok.hu,
http://marketingtitkok.hu/2017/09/19/a-muszi-legendaja/, Published: 19.09.2017.,
Retrieved: 01.11.2018.
14. Kohli, C.S. - Harich, K. R. - Leuthesser, L. 2005, Creating brand identity: a study of
evaluation of new brand names, Journal of Business Research, Vol. 58, pp. 1506-1515.
15. Kohli, C.S. - Suri, R. 2000. Brand names that work: a study of the effectiveness of different
types of brand names, Marketing Management Journal, Vol. 10 No. 2, pp. 112-120.
16. Kovács L. 2019. Márka és márkanév – Márkakutatás és nyelvészet – Metszéspontok,
lehetőségek, kihívások. (“Brand and brand name – Brand research and linguistics –
Intersections, opportunities, challenges.”) Budapest, Tinta Könyvkiadó
17. Machado, J. C. – Pitsaki, I. 2015. Functional or meaningless?: A debate on the use of initials
in brand names and designs. 10th Global Brand Conference of the AM’s Brand, Corporate
Identity and Reputation SIG. 2015. 27-29 April, Turku, Finland
18. Middleton, A. 2004. Death by Acronym, Marketing Magazine, Vol. 109 No. 13, pp. 8-8.
19. Miller, J. 2019. Brand New Name – A Proven Step-By-Step Process to Create an
Unforgettable Brand Name. Canada, Page Two.
20. Morris, E. 2004. From Altoids to Zima. The Surprising Stories Behind 125 Famous Brand
Names. New York, Fireside

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21. Olins, W. 2004. A márkák. A márkák világa, a világ márkái (“On Brand”). Budapest,
Jószöveg Műhely – British Council.
22. Petty, R. 2008. Naming names: trademark strategy and beyond: part one – selecting a brand
name, Journal of Brand Management, Vol. 15 No. 3, pp. 190-197
23. Ries, A. – Ries, L. 2002. The 22 Immutable Laws of Branding. How to Build a Product or
Service to a World-Class Brand & The 11 Immutable Laws of Internet Branding. New York,
Harper Collins
24. Ries, A. – Ries, L. 2009. War in the Boardroom. Why Left-Brain Management and Right-
Brain Marketing Don’t See Eye-to-Eye – and What to Do About It. New York, Collins
Business.
25. Ries, A. – Trout, J. 1997. Pozicionálás. Harc a vevők fejében elfoglalt helyért.
(“Positioning: The Battle for Your Mind”) Budapest, Bagolyvár Könyvkiadó
26. Rivkin, S. – Sutherland, F. 2004. The Making of a Name. The Inside Story of the Brands We
Buy. New York, Oxford University Press.
27. Robertson, K. 1989. Strategically Desirable Brand Name Characteristics, Journal of
Consumer Marketing, Vol. 6 No. 4, pp. 61-71
28. Sas István 2015. Ezt nem adom, ez disznósajt! (“I'm not giving you this, it's ‘pig cheese’!”)
Budapest, Kommunikációs Akadémia.
29. Watkins, A. 2019. Hello My Name is Awesome – How to Create Brand Names That Stick.
Oakland, Berrett-Koehler Publishers
30. Wipperfürth, A. 2005. Eltérített márkák. A marketingmentes marketing. (“Brand Hijack:
Marketing Without Marketing”) Budapest, HVG Könyvek.
31. Wiseman, R. 2009: 59 Seconds. Think a Little, Change a Lot. London, MacMillan
32. Yadin, D. 2002. The International Dictionary of Marketing – Over 2000 Professional Terms
& Techniques. London, Kogan Page

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 83rd International Scientific Conference on Economic and Social Development - "Green Marketing" – Varazdin, 2-3 June, 2022

INTERPERSONAL RELATIONS AND THE IMPORTANCE OF

INTELLECTUAL CAPITAL AS A COMPETITIVE ADVANTAGE OF
THE ORGANIZATION
Anica Hunjet
University North, Croatia
anica.hunjet@unin.hr

Petra Ostojic
University North, Croatia
peostojic@unin.hr

Sanja Mihelic
University North, Croatia
samihelic@unin.hr

ABSTRACT
In the conditions of globalization, the availability of information from all parts of the world is
almost unlimited and at the reach of everyone. Competition and the struggle for good employees
is stronger than ever. Brain drain is a major threat to organizations and nations. An important
task for organizations is to find new approaches to retaining and attracting competitive
employees. One of the main criteria is to create a pleasant working environment and encourage
quality and harmonious interpersonal relationships in organizations. For this reason, the focus
of organizations is on creating interpersonal relationships through various joint events such as
team building and a fair reward system. The paper analyzes the concepts of intellectual capital,
interpersonal relations, socially responsible business. The paper shows how important
interpersonal relationships are for employees in doing their job. How do organizations invest
in intellectual capital? The results of the research, presented in this paper, show the level of
informing the Croatian public about intellectual capital and the impact of interpersonal
relationships on employee loyalty to stay in the organization.
Keywords: Intellectual Capital, Interpersonal Relationships, Socially Responsible Business

1. INTRODUCTION
Organizations today have the task of attracting, but even more so retaining the existing
workforce. The existence of any organization, regardless of the size and the segment in which
it operates in the market, has been called into question due to the growing flexicurity, proximity
and openness of the labor market. Globalization and new technologies have enabled the rapid
flow of information and easier identification of quality employees. Brain drain is a major threat
not only to the state but also to organizations. Organizations have the task of finding new
approaches to retain, but also attract competitive employees. One of the main criteria is to create
a pleasant working environment and encourage quality and harmonious interpersonal
relationships in organizations. The work environment greatly affects the motivation of
employees, willingness to cooperate, and thus the success of the organization. It is impossible
to look at human work without looking at the intellectual capital of each individual who works
in this organization. The questions answered in the paper are: What is the importance / impact
of interpersonal relationships in the workplace? How do organizations invest in intellectual
capital? Accordingly, two hypotheses have been set:
• H1: The impact of interpersonal relationships is important to create an organization’s
competitive advantage
• H2: Organizations are aware of the importance of intellectual capital and invest in it.

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The paper includes a theoretical part and a research part in which the analysis of the conducted
online research is presented. The theoretical part of the paper uses methods of descriptive,
comparative, deductive and synthetic analysis. In the research part of the paper, the authors
conducted a survey in March 2022 by sending an online questionnaire to employed participants.
In addition to the introduction and conclusion, the concept of intellectual capital is presented at
the beginning. The third part of the paper deals with interpersonal relationships while the fourth
one refferes to organizational structure and socially responsible business. The fifth , last part of
the paper, refers to the data obtained from the analysis of the conducted online public opinion
in Croatia. In conducting the research, an online questionnaire sent to 95 respondents was used
as an instrument. The aim of the research was to find out how much the Croatian public is
informed about intellectual capital, what is the impact of interpersonal relationships on
employee loyalty to stay in the organization and how the organization achieves creation and
good interpersonal relationships.

2. INTELLECTUAL CAPITAL
There is no single definition of intellectual capital. The emergence of intellectual capital is
associated with the emergence of the New Economy when in 1991 Thomas A. Stewart
published an expert article How Intellectual Capital Is Becoming America's Most Valuable
Asset. According to Thomas Stewart, the definition of intellectual capital would be that
"Intellectual capital is something you can't touch, but it makes you richer every day" (Juršić,
2020). In the literature related to intellectual capital, some authors believe that the roots of
intellectual capital can be found in the work of Adam Smith, in the 1976 book The Wealth of
Nations (HGK monografija, Kolaković). Kolaković states that the founder of intellectual capital
was Frederich W. Taylor, who published the work in 1911:“The Principles of Scientific
Management” (Kolaković, 2003). According to the authors Sundać and Fatur Krmpotić,
intellectual capital refers to the ability of people to use information to solve complex problems
and adapt to change by relying on knowledge that can be turned into value (Sundać, Škalamera-
Alilović, Babić, 2016). Milović, Mustapić and Moslavac-Forjan believe that knowledge and
information are products of the human intellect that represent intangible assets. By using them
and sharing them with others, their value is achieved (Milović, Mustapić, Moslavac-Forjan,
2016). The intellectual capital components of any organization are useful for maintaining
wealth based on knowledge, reliability, and value. Therefore, the authors recommend that
organizations around the world must emphasize the development of intellectual capital
components for the long-term survival of the value chain. They state that national and regional
public policies must be reformed to include intellectual capital components in their economies
(Ali, Hussin, Haddad, Al-Araj i Abed, 2021). In today's conditions, the knowledge and skills
of employees and intellectual capital become the main competitive advantage and represent the
first source of added value to the organization. The intellectual capital of an organization
consists of various elements, such as knowledge, patents, business skills, information about
customers and suppliers, processes. Peter Drucer wrote in the 1990s that we are entering a
knowledge society, where knowledge is the basic economic source, and in his numerous
researches he realized that modern organizations operate in a knowledge society. Therefore, in
such conditions, the basic economic resource is no longer capital or labor but knowledge
(Sundać, Fatur, 2004). The acquisition of knowledge and skills in an organization can be
organized through formal or non-formal forms of learning and education. "Formal education is
education that is conducted in various accredited educational institutions according to verified
programs that provide recognized diplomas and qualifications. Non-formal education can be
defined as organized teaching and learning that is more or less pedagogically and didactically
designed, by which an individual acquires some knowledge or acquires skills and which meets
additional or alternative learning needs.

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Non-formal education most often expands and upgrades existing knowledge and skills acquired
through formal education and adopts those knowledge and skills that were not encountered
during formal education (Perin, Terihaj, 2019). Buterin and Katavić consider that knowledge is
increasingly recognized as a basic economic resource and that knowledge management is a
complex and dynamic process for which organizations must establish clear management goals
that are unique to them. They agree with Zaied, Hussein and Hassan that some of the goals of
knowledge management are:
• "enabling faster and better flow of information, improving the process of knowledge sharing
in all business units,
• enabling better communication between employees in the organization and in the global
system,
• enabling better and more efficient functioning of business processes ".

Also, only the systematic collection and use of knowledge in the organization creates
intellectual capital. The mentioned capital is a new type of corporate assets that need to be
managed responsibly with regard to the emergence and use of new technologies in solving
increasingly complex problems in the organization's operations. (Buterin, Katavić, 2018)

3. INTERPERSONAL RELATIONS AND THEIR INFLUENCE ON BUSINESS

The Croatian Encyclopedia defines interpersonal relations as: “everyday relations and problems
of human society, in which, in addition to situations of agreement between people, there are
disagreement and conflict between individuals and social groups. The main reason for
disagreement is the different perceptions of the same situation. " (Hrvatska enciklopedija, 2021)
E. Mayo, the founder of the School of Human Relations, conducted experiments / research to
improve productivity. The most famous experiment on changing lighting in the workplace is
better known as the Hawthorne experiment, a study conducted at the Western Electric
Company, which investigated the relationship between lighting conditions and employee
productivity. Employees were divided into two groups. The first group of employees worked
under the same lighting conditions, while the second group was gradually turned off. Research
has shown that both groups of employees have increased their productivity
(yestherapyhelps.com, 2022). After further research into the relationship between performance
and other physical variables (those that produce fatigue and monotony), he found that work and
job satisfaction depended heavily on the informal social pattern of the workgroup, while
physical conditions or financial incentives had little motivational value. People will be formed
into working groups and this can be used to manage for the benefit of the organization. In
conclusion, it has been shown that human labor also depends on social issues and content
(Hernaus, 2016). Interpersonal relationships are one of the main factors of satisfaction when
choosing an organization and staying in it. The key to interpersonal relationships is in
communication. Communication among employees is key to achieving business goals. It is a
business communication that connects different segments of the organization: sales and
consumption, logistics but also human resources (Bolfek, Milković, Lukavac, 2017).
Interpersonal relationships are affected by the level of knowledge, experience and skills of
employees. The first scientist who scientifically try to define the knowledge, experience and
skills of employees was Frederick Taylor, who published his work in 1911:“The Principles of
Scientific Management”. (Kolaković, 2003) Taylor is credited with introducing the concept of
scientific work organization or scientific management. He considered it necessary to observe
the work of an individual employee in order to discover how it is possible to increase the
efficiency of production. According to him, it was important to separate the executive functions
of production from the creative and thought.

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He contributed to a clearer understanding of the principles of standardization of work and the

system of incentives and rewards for employees (Hrvatska enciklopedija mrežno izdanje,
2022). Information, ie their processing, plays a key role in decision-making in the organization.
In order for information to contribute to the decision-making process, Dess and Picken in
Sundać, Škalamera-Alilović, Babić, state that a "culture of awareness of the business
environment" must be built. It can be achieved by directing five elements:
1) Priority - the priority of the organization must be the collection and sharing of information
about the business environment
2) Participation - builds on the first element and applies to all employees in the collection and
sharing of information, especially those who communicate with customers, suppliers and
competitors
3) Focus - the information that the organization collects must be relevant and relevant to the
organization
4) Process - the organization must have established internal processes by which information
will be transmitted and delivered in a fast, accurate and responsible manner to those who
need it
5) Motivation - it is important that employees are motivated to participate in contributing to
the betterment of the organization. In doing so, the organization can use incentives, rewards,
motivational speeches. (Sundać, Škalamera-Alilović, Babić, 2016)

In order for five principles to work, workplace relationships need to be at a high level. In 2019,
during the 10th Regional Virtual Career and Knowledge Days, the MojPosao portal conducted
a survey to determine the situation on the labor market in Croatia and the region. The research,
in which about 4.000 respondents participated (over 1.000 participants from Croatia), included
partner portals from the region Posao.ba, Infostud.rs and Vrabotuvanje.com.mk. According to
the obtained data, of the respondents from Croatia, 51% of employed and 43% of unemployed
persons joined the survey, while 6% of respondents are studying. The research showed that 2/3
(69%) of Croats pointed out good interpersonal relations as the most important factor when
choosing a job. In second place is the amount of salary (62%), and in third place is working
hours. This showed that the most important factor in choosing a job is interpersonal
relationships. (MojPosao.hr, 2019) Authors Trancă and Neagoe believe that positive language
is a key element in the development of interpersonal relationships, especially in the practice of
helping professionals (Trancă, Neagoe, 2018).

3.1. Creating good interpersonal relations

Team building also contributes to creating good interpersonal relationships, because nowadays
managers are becoming aware that it is more important and productive to have competent
employees who are well connected and cooperate well than those who will do their part
independently, although competently. Team building enables more open communication
among employees, contributes to a better working atmosphere. During team building,
employees are exposed to new experiences and ideas, which often highlight creative
individuals, whose creativity was unknown until then, but important in the business
environment, build healthier business relationships and open opportunities for joint problem
solving and create better mutual trust resulting in better productivity.

4. ORGANIZATIONAL STRUCTURE AND SOCIALLY RESPONSIBLE BUSINESS

Corporate Social Responsibility (CSR) is a business concept in which organizations, on the
basis of voluntary action without legal pressure, strive to operate in accordance with the needs
of the society in which they operate. It relates to the way it is produced, the resources it uses,
the way it uses them, how the organization's actions affect the environment, how it treats its

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employees and how it affects the community in which it operates (Vrdoljak, Raguž, Hazdovac,
2014). It is characteristic of each organization separately and there is no single method of
applying CSR in organizations because each organization is characterized by different business
conditions, circumstances and environment. For this reason, each organization should create its
own CSR implementation strategy in accordance with its own business processes, business
culture, way of doing business and the environment in which it operates (Glumac, 2018). "The
most effective is the CSR that is set strategically so that its implementation benefits both the
organization and the society in whose interest it is implemented. That is why strategic initiatives
should be led by the organization's management or executive director, in order to create
corporate sustainability and lasting values for the organization." (Matešić, Pavlović, Bartoluci,
2015) It is a model of corporate community, according to which the organization is defined as
a socio-economic system in which goods are achieved through the cooperation of stakeholders
in order to achieve competitive advantage. This is achieved by incorporating CSR into the
corporate governance system in a way that leadership is guided by the pursuit of value creation,
commitment to learning, innovation, partnerships, the introduction of performance monitoring
and reporting (Matešić, Pavlović, Bartoluci, 2015). Glumac states that employees: “are
considered the main asset of the organization because they achieve results and represent the
organization in the market. For this reason, he states that neglecting their expectations and needs
can lead to unstable business and / or poor business and a negative reputation. It follows that
the relationship between the organization and its employees has an impact on the relationship
between the organization and the client. This will largely depend on the impression the
organization leaves on the client regarding the relationship it has with its employees. Clients'
trust in the organization is seen through CSR activities through which the organization seeks to
improve working conditions in order to increase the satisfaction of its employees and thus
consequently affect the competitiveness of the organization in the market in which it operates.
(Glumac, 2018)

5. ANALYSIS OF CONDUCTED RESEARCH

The second part of the paper refers to the research conducted on informing the Croatian public
about intellectual capital, ie the desire for training and the impact of interpersonal relationships
on employee loyalty to stay in the organization. The online questionnaire was divided into five
sections, which sought to investigate how individuals are aware of the intellectual capital they
possess, whether they are willing to further education, how many employers are willing to
contribute to the development of intellectual capital. The first set of questions referred to
general questions about the individual accessing the questionnaire, the second set of questions
related to information related to participants' willingness to improve and acquire new
knowledge, the third set of questions related to the importance of interpersonal relationships for
employment or stay or change of employer and work environments. The fourth and fifth set of
questions referred to what extent interpersonal relationships contribute to the trust and loyalty
of the organization in which they are employed and how the organization achieves and creates
good interpersonal relationships. The questionnaire was completed by 92 respondents, of whom
76.9% were women and 23.1% were men. Most respondents belong to the good group of 46-
65 years (65.2%), most of whom work in the public sector (53.9%). Most 60% of respondents
have been working in the organization for more than 10 years. The majority of respondents,
58.9%, have a university degree. The second set of questions related to issues on education and
intellectual capital. In the last year, 56.7% of respondents have been educated. Of the total
number of respondents, 27% go to training several times a year, while on the other hand 25.8%
go once a year or 22.5% do not go at all, and 24.7% go to training once every five years.

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Respondents most often cited the desire to acquire new knowledge and skills, the need for work,
the development of their own abilities and talents, the possibility of advancement, the
monitoring of trends and innovations in their field, personal progress, exchange of experiences.
When it comes to knowledge of the term intellectual capital, respondents, 62.9% of them
pointed out that it is knowledge that exists within the organization, 53.9% of investments and
development potential of the organization, 37.1% intangible value of the organization. It can be
seen from Picture 1 that none of the respondents consider intellectual capital to be a cost, which
confirms the thesis about the importance of intellectual capital. It is also a positive result that a
small number of respondents, 2.2% of them believe that intellectual capital is a natural resource.
The results of the answer to this question show a very good understanding of the concept of
intellectual capital.

Picture 1: Question 10: Can you state what in your opinion is intellectual capital? (multiple
answers possible)
(Source: Authors)

A number of 46.6% of respondents think that the organization in which they work pays enough
attention to employees and the development of intellectual capital, while 53.4% think the
opposite. When it comes to trainings, half of the respondents stated that they have been to
trainings in the last year, 75.5% of them decided on trainings independently and 24.5% of them
were educated by the decision of the employer. Also, half of the respondents believe that the
organization in which they are employed pays enough attention to employees and intellectual
capital development, which suggests that there is still a lot of room for intellectual capital
development and investment in employee training and care. The second hypothesis (H2:
Organizations are aware of the importance of intellectual capital and invest in it) is not fully
confirmed since the research results show that organizations are aware of the importance of
intellectual capital, but still do not invest enough. The third set of questions, which referred to
the competitiveness of the organization, showed that 48.9% of respondents believe that the
organization in which they work is more competitive than others. Respondents cited: quality
and knowledge, market speed, modernization, tradition and human potential, no competition,
intellectual capital, employee care, customer satisfaction, large number of highly educated
employees, gives better chances for advancement, has a competitive advantage and business
heritage, the possibility of employee training, continuous work on improvements, a positive
approach to customers. Contrary to the above, the results of the second half of respondents are
worried, since 51.1% believe that the organization in which they work is not more competitive
than others. The reasons given were: negative staff selection and poor management, bad image
of the organization, sluggishness and bureaucracy, appointments according to unprofessional

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criteria, lack of continuous training of all individuals, knowledge is not valued and valued. As
one of the parameters of the organization's competitiveness, the authors asked a question related
to monitoring customer satisfaction, to which 65.2% answered that they monitor their
satisfaction, while the remaining 34.8% said they do not monitor. As methods for monitoring
customer satisfaction, respondents stated: surveys, cooperation, customer care, price and
quality, adaptation to customer requirements, through research, through quality systems, direct
contact with customers, thanks, complaints, remarks. The fourth set of questions relates to
interpersonal relationships and communication among employees. When asked with whom they
take a break from work, 61.1% of respondents answered that they take a break with colleagues,
while only 1% of respondents spend their free time after work with colleagues. When it comes
to mood in the workplace, 90.9% of respondents answered that they are in a good mood at work.
60% of respondents have a good business relationship with colleagues, 38.8% have an excellent
business relationship with colleagues, while 1.2% of respondents have no business relationship
with colleagues at all. 52.2% of respondents have a correct business relationship with the boss,
34.4% have an extremely good relationship, while 13.3% communicate with the boss only when
necessary. A number of 60.9% respondents believe that their superiors are an example of good
practice when it comes to encouraging good interpersonal relationships, and 30.1% of them
consider their superiors to be a bad example. Examples of good practice were: socializing,
teamwork, easy communication and support, fully open and fair business relationship,
socializing outside of work, sensitivity to private issues, the ability to talk, team building, good
interpersonal relationships, caring for employees in many ways, rewards for work done. As
negative examples, respondents stated: no communication, lack of understanding of operations
and scope of work, hierarchy is rigid, superiors at a higher hierarchical level do not know what
subordinates do and do not show interest in it, which creates a bad business climate and
dissatisfaction with various institutions and basic information, poor management, no one
communicates with anyone at work, no socializing at work or outside, insufficient
encouragement and creating a climate that would contribute to colleagues being more
interconnected, tolerant and intimate as the job requires, insufficient flow of information , bad
relationships and intolerance are encouraged. The last set of questions referred to the creation
of interpersonal relationships, relationship with colleagues, exchange of information between
colleagues, feedback on work, communication with superiors. When asked on what the
relationship with colleagues is based on, 62.2% of respondents stated that it is mutual respect,
32.2% that it is trust, 2.2% competition and 3.3% distrust. Communication with superiors and
colleagues is open to 86.7% of respondents in which they can express their opinion without
being criticized and 13.3% of respondents do not dare to express their opinion due to criticism,
so they consider such communication closed. As positive examples of open communication,
respondents stated: freedom of opinion, openness, daily communication, acceptance of
proposals for improvement, consultations, open door policy, everything is correct, democratic
management of society, good team, critically discussed topics, fair atmosphere, they can always
talk openly about problems and be heard, opinions are respected, problems are solved together.
As negative examples of communication, respondents most often stated: there is no
independence in making any decision, every initiative is attacked and criticized, everything I
do requires a mistake to criticize, there is no answer to the proposal and everything goes as
before, no communication, mostly they solve things when too many problems have already
accumulated, opinion is not respected, initiative is not valued, there are no clear criteria for
possible progress. When asked what kind of information exchange is in the organization, 52.2%
of respondents answered that it is continuous, open and fast, 40% that it is periodic and selected,
and 7.8% that it is rare. 35.6% of respondents receive feedback on their work regularly, 35.6%
only if they request it and 28.9% of respondents do not receive feedback on their work.

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The analysis of the last two sets of questions showed the importance that interpersonal
relationships have on the competitiveness of the organization. The answers given by the
respondents in the research clearly confirm the hypothesis (H1: The impact of interpersonal
relationships is important for creating competitive advantage of the organization) that the
impact of interpersonal relationships on creating competitive advantage of the organization is
significant and that good success depends on good interpersonal relationships. The analysis
shows that in most organizations, superiors are aware of the importance of interpersonal
relationships and are an example of good practice. On the other hand, the analysis also showed
the need to invest in interpersonal relationships and their development as well as the importance
of awareness of the influence that superiors have in their creation and providing examples of
good practice.

6. CONCLUSION
With adequate knowledge management, organizations ensure their survival in the market,
increase profitability and the ability to react quickly to changes in the environment. Although
there are various theories about knowledge management, it still represents an insufficiently
researched branch of science. The development of an organization is influenced by
interpersonal relationships. Employees are social beings, not just a group of individuals, who
act as a group in the workplace. However, cooperation sometimes needs to be stimulated (for
example, the selection of collaborators). It is important to point out that individual problems in
the workplace have their roots in social problems, because the private life that takes place at
home significantly affects work productivity and feelings and work can not just be separated
from each other because man is not a robot. Work is not just a means of making money - it is
the price we have to pay to have money and it can also be a source of human pleasure. Money
is just one of the means of stimulating employees. Disharmonious relations within the work
environment are often the reasons for numerous strikes, not just low wages. Employee
satisfaction feelings at work have a big impact on work productivity. Mental fatigue, unlike
physical fatigue, is more detrimental to productivity. It is necessary to allow employees to say
what is bothering them. Work and leisure cannot be completely separated. The work
environment has a big impact on employees - from the look of the ambiance (whether cold
colors, minimal decoration or warm colors, plants in offices, photos of loved ones or pets at the
desk), but also very important employee relationship. It is easier and more pleasant to work
with cheerful and optimistic associates who are sociable, cheerful, enthusiastic and ambitious
because such an environment will encourage us to work together and we will want to work
more and better to achieve success but also to achieve common results for the organization in
which we operate. Given the small sample of respondents who responded to the survey, there
is a limitation in the results of the survey that can provide concrete data, but the analysis of the
sample showed that the involvement of employers in the "lower ranks" of the organization they
lead. Knowing the names of your employees is the most important characteristic of knowing
and caring for employees, because everyone's name is most important to everyone. This does
not make the employee feel like a "number", which contributes to better work and a sense of
belonging. Those employers who take into account the needs and respect employees achieve
higher productivity than those who do not, which means that it should be in the interest of
employers to have a humane attitude towards employees because it would lead to higher
productivity, ie higher profits and lower the number of conflicts between levels. The analysis
showed that organizations that have implemented knowledge management with the use of
adequate tools are more successful than the competition and make higher profits and increase
business performance at lower cost. From the above, the conclusion is that it is no longer
questionable whether organizations need to manage knowledge, but that it is important to find
an adequate way to implement it and how to implement it in their business.

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The results of the research should encourage managers in senior and senior positions in
organizations and decision makers to invest in the knowledge and skills of their employees as
well as in the importance of interpersonal relationships and work atmosphere and thus the
competitiveness of the organization.

LITERATURE:
1. Ali, M.A., Hussin, N., Haddad, H., Al-Araj, R. and Abed, I.A. (2021) Intellectual Capital
and Innovation Performance: Systematic Literature Review. Risks 9: 170. Retrieved:
6.3.2022. from https://doi.org/10.3390/risks9090170
2. Bolfek, B., Milković, V., and Lukavac, M. (2017) 'Utjecaj interne komunikacije na
zadovoljstvo zaposlenika radnim mjestom', Oeconomica Jadertina, 7(1), pp. 16-27.,
Retrieved: 6.3.2022. form https://hrcak.srce.hr/184194
3. Buterin, R., i Katavić, I. (2018) 'Utjecaj upravljanja znanjem na konkurentsku prednost
poduzeća', Obrazovanje za poduzetništvo - E4E, 8(2), pp. 39-55., Retrieved: 6.3.2022 from
https://hrcak.srce.hr/213868
4. Glumac, M. (2018) 'Društvena odgovornost kao važan aspekt uspješnog poslovanja',
Paragraf, 2(1), pp. 99-124, Retrieved: 6.3.2022. from https://hrcak.srce.hr/207652
5. Hernaus, T. (2016) Teorije organizacije // Organizacija / Galetić, L. (ur.). (2016) Zagreb:
Sinergija-nakladništvo d.o.o., pp. 27-66
6. Hrvatska enciklopedija, mrežno izdanje. Leksikografski zavod Miroslav Krleža, (2021)
Retrieved: 6. 3. 2022.from http://www.enciklopedija.hr/Natuknica.aspx?ID=39829
7. Juršić, M. (2020) 'Intelektualni kapital kao ključni resurs suvremenih poduzetnika',
Specijalistički diplomski stručni, Sveučilište u Zagrebu, Ekonomski fakultet, Retrieved:
5.3.2022. from https://urn.nsk.hr/urn:nbn:hr:148:362555
8. Kolaković, M. (2003) 'Teorija intelektualnog kapitala', Ekonomski pregled, 54(11-12), pp.
925-944., Retrieved: 15.01.2022. from https://hrcak.srce.hr/25671
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Libertas, Zagreb, pp. 25., Retrieved: 6.3.2022. from https://bib.irb.hr/datoteka/
981956.DOP.pdf
10. Milović, T., Mustapić, Z., and Moslavac-Forjan, D. (2016) 'Uloga i važnost intelektualnog
vlasništva u poduzetništvu', Obrazovanje za poduzetništvo - E4E, 6(2), pp. 79-98.,
Retrieved: 6.3.2022. from https://hrcak.srce.hr/170934
11. MojPosao.hr (2019) Pri odabiru radnog mjesta najviše se cijene dobri međuljudski odnosi,
Retrieved: 6.3.2022. from https://www.moj-posao.net/Vijest/78800/Pri-odabiru-radnog-
mjesta-najvise-se-cijene-dobri-medjuljudski-odnosi/55/
12. Perin, V. and Terihaj, S. (2019) 'Cjeloživotno učenje unutar institucije', Acta Iadertina,
16(2), pp. 0-0. Retrieved: 6.3.2022. from https://hrcak.srce.hr/237509
13. Sundać, D. and Fatur, I. (2004) 'Intelektualni Kapital - Čimbenik stvaranja konkurentskih
prednosti logističkog poduzeća', Ekonomski pregled, 55(1-2), pp. 85-96. Retrieved:
6.3.2022. from https://hrcak.srce.hr/14804
14. Sundać, D., Škalamera-Alilović, D. and Babić, M. (2016) Poslovno okruženje i intelektualni
kapital. Rijeka: Ekonomski fakultet Sveučilišta u Rijeci, (monografija)
15. Trancă, Loredana Marcela and Alexandru Neagoe (2018) “The Importance Of Positive
Language For The Quality Of Interpersonal Relationships.” Retrieved: 6.3.2022. from
https://www.semanticscholar.org/paper/THE-IMPORTANCE-OF-POSITIVE-
LANGUAGE-FOR-THE-QUALITY-Tranc%C4%83-
Neagoe/b7247388231955f1d978f91f4ff6023a3ab0e262
16. Vrdoljak Raguž, I. and Hazdovac, K. (2014) 'Društveno odgovorno poslovanje i hrvatska
gospodarska praksa', Oeconomica Jadertina, 4(1), pp. 40-58. Retrieved: 6.3.2022. from
https://hrcak.srce.hr/130001

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17. yes,therapyhelps!.com (2022): Što je Hawthorne efekt?, Retrieved: 6.3.2022. from

https://hr.yestherapyhelps.com/what-is-the-hawthorne-effect-12811

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 83rd International Scientific Conference on Economic and Social Development - "Green Marketing" – Varazdin, 2-3 June, 2022

GREEN PUBLIC PROCUREMENT

Vlatka Kordos
University North, Croatia
vlkordos@unin.hr

Valentina Golubovic
Elementary School “Milan Šorga”, Croatia
vale.golubovic@gmail.com

Ana Globocnik Zunac

University North, Croatia
agzunac@unin.hr

ABSTRACT
The public procurement system is based on ensuring transparent and non-discriminatory
participation of all interested parties, for which the contracting authority is responsible. Public
procurement is known for a set of rules, procedures and principles that must be strictly adhered
to by both contracting authorities and all interested economic operators. In this, the contracting
authority is the one that determines the type of public procurement procedure, specifies, and
conducts the procurement of works, goods or services. Green public procurement is mentioned
as one of the terms that is important because it is through it that contracting authorities seek to
order goods, services or works that have less impact on the environment during their life cycle,
but with the same basic function and quality that would otherwise be ordered. Green public
procurement is a voluntary instrument that encourages environmental protection and
sustainable consumption as well as production, and its importance is emphasized in
international and European strategic documents. The main goal of this paper is to present the
concept of green public procurement, its importance and benefits, key determinants and
benchmarks of this type of goods, works or services and to compare the current application of
public procurement procedures that included the selection of "green" products and services as
just one part of sustainable public procurement.
Keywords: public procurement, green public procurement, environmental protection,
sustainable public procurement

1. INTRODUCTION
Public procurement is a core activity of all types of development policy implementation
(Shakya, 2019). Public procurement as a generator of demand is an extremely important tool
for achieving alternations through social relations, environmental aspects, but also through the
economic system. A significant part of the state budget is used through the public procurement
system, and in this way, it accounts for a large part of state spending (Čusek-Slunjski, Munđar,
2017). Public procurement is one of the significant parts of any business (Thai, 2001).
Therefore, it is important to say that the conduct of public procurement is strictly regulated by
law, which contracting authorities must apply and follow, all with the aim of optimal spending
of money in an economical and efficient way. Economic and legal points of view are the main
parts that must be taken care of by all participants in the public procurement procedure, in other
words, contracting authorities and all interested economic entities. Given that every public
procurement procedure requires the use of certain financial resources, initially in the form of
estimated value, and in order to ultimately obtain properly delivered services, goods or works,
it is crucial to orient and meet economic standards. On the other hand, of equal importance are
the legal frameworks and standards with which contracting authorities must be familiar and

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monitor on a daily basis all new regulations and rules that legally bind them. It is important to
say that through the public procurement system all economic needs are described and
documented within the individual procedure, and conditions are legally prescribed to prevent
and avoid possible behavior contrary to prescribed norms (Ciglević, 2016). Public procurement
also seeks answers to three key questions, namely: what is ordered, why and for whom.
Although, depending on the type of procedure, the public procurement procedure begins on the
day of sending the invitation to tender or the day of sending the invitation to submit initial bids
to the contracting authority, it is preceded by a number of different activities (Raguž, Blažević,
2017). It starts from defining what is ordered, as the basic and main question of whether it is a
matter of procurement of goods, works or services, as well as clear characteristics of what goods
should be delivered, and what kind of works or services. It often happens that the clients only
after the published documentation and after the inquiries of interested parties realize that they
have described the goods, works or services in the wrong or unsatisfactory way (Ciglević,
2016). Precisely because of the above, clients are preceded by a detailed market analysis. The
same method precedes when goods, works or services whose specifications correspond to
"green public procurement" are included in the procedure. If the contracting authorities set as
primary goals the efficient disposal of available financial resources, obtaining the best possible
goods, works or services and at the lowest possible price as defined by the Public Procurement
Act according to the criterion of the most economically advantageous bid, social and
environmental aspects can be set as secondary goals, in other words, the environmental aspect
can be set through the application of green public procurement as only one part of the
sustainable public procurement system.

2. GPP PROCEDURE
Significant consumers who spend about 15 trillion kunas every year, which is about 17% of the
GDP of the European Union, are public administration bodies, in other words, contracting
authorities. Through the purchasing power they possess, they can have a significant impact on
sustainable consumption and production (GPP, 2015). Green Public Procurement (GPP) is
defined as a procedure in which public administration bodies procure goods, works and services
that have a lower impact on the environment during their lifetime than goods, works and
services with the same basic function that they would otherwise order. (National Action Plan
for Green Public Procurement, 2015). Contracting authorities identify tenders that are more
environmentally friendly through techniques such as life-cycle costs, specifying sustainable
production processes and the use of criteria for the award of environmental contracts (A
handbook on green public procurement, 2016). Some of the main benefits of green public
procurement are a cleaner and healthier environment, an increase of the quality of citizens’
lives, a positive impact on launching innovations that provide additional incentives for industry
to develop green products and services, financial savings, especially when looking at costs
throughout the life cycle of the contract, not just the purchase price, reduction of utility bills
through the purchase of products that consume less energy or save water. By reducing the
content of harmful substances in purchased products, waste disposal costs can be reduced as
well. (Leonardis, 2011). Although contracting authorities achieve numerous advantages and
benefits with the application of green public procurement, there are also a number of technical
challenges in the implementation itself. One of these challenges is the lack of clear definitions
of how contracting authorities sometimes do not know exactly how socially and
environmentally acceptable works, goods or services should look like and how to include such
requirements in public procurement procedures in general. Therefore, many clients use the so-
called eco-labels in defining criteria. The next challenge refers to “the purchase price only”
attitude, where the key challenge in the public sector is to change the way people behave within
the departments that decide on the purchase of a product or service.

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These departments most often make decisions about purchasing products and services based on
the purchase price, not considering the total cost over the life of the product or service. Another
technical challenge comes through integration into governance systems, and it talks about how
decentralized organizations require effective governance systems, in order to ensure consistent
implementation of environmental and social initiatives (Ciglević, 2016).

2.1. Strategic framework of the PPL in the Republic of Croatia

All definitions, interpretations, steps and information on green public procurement come from
various strategic documents. Green public procurement is increasingly highlighted in
international and European strategic documents as an important instrument whose application
would influence the "greening" of the market and encourage the development of eco-
innovation. The Republic of Croatia, as one of the members of the European Union, is like any
other Member State obliged, according to European legislation, to determine to what extent and
in what way it will include the PPL criteria in public procurement procedures. Precisely because
of this, the members have been invited to develop national action plans, in order to obtain a
framework for the integration of PPL benchmarks into individual public procurement
procedures (A handbook on green public procurement, 2011). In accordance with the
obligations assumed by the Republic of Croatia, numerous legal regulations and documents
regulating the area of the PPL have been adopted. The National Action Plan for Green Public
Procurement for the period from 2015 to 2017 with a view to 2020 was adopted at the session
of the Government of the Republic of Croatia in August 2015 and is one of the most important
documents adopted by the Republic of Croatia in connection with the PPL. The goal of the
action plan was to include some of the criteria of the Public Procurement Act in 50% of public
procurement procedures by 2020, and the plan is primarily intended for public procurement
entities according to the Public Procurement Act. It can also serve as an incentive for the
introduction of green benchmarks in simple procurement procedures as well as an incentive for
the private sector in Croatia to introduce the practice of green public procurement in their
business. The report for the period from 2015 to 2017 on the implementation of the National
Action Plan of the PPL provides an overview analysis of the implemented measures and
activities in the three-year period of validity of the National Action Plan of the PPL. At the
session of the Government of the Republic of Croatia in May 2021, the Decision on Green
Public Procurement in Central Public Procurement Procedures (NN 49/2021) is significant.
With this decision, the Government of the Republic of Croatia demonstrates its commitment to
climate policy and the policy of the circular economy. The Ministry of Economy and
Sustainable Development has emphasized the importance and role of promoting sustainable
development and integrating environmental protection and climate change policies and
measures into all sectoral policies, and promoting sustainable consumption and production
policies to reduce resource consumption, greenhouse gas emissions and pollutants as well as
waste reduction, and at the same time is the coordinator for the EU Ecolabel1 and EMAS2 eco-
labels and for green public procurement. Waste management plan of the Republic of Croatia
for the period 2017-2022 was also adopted in January 2017, which cites green and sustainable
public procurement as one of the measures to prevent waste.

1 The official eco-label of the European Union, which labels "green" products and services, in other words, those that have a
less adverse impact on the environment during the life cycle compared to similar products and services. The EU Ecolabel is
proof that a product or service meets high environmental standards. (Ministry of Economy and Sustainable Development,
European Union Environmental Protection Label - EU Ecolabel, https://mingor.gov.hr/o-ministarstvu-1065/djelokrug/uprava-
za-klimatske-aktivnosti-1879/eko-oznake/znak- environmental-protection-of-the-european-union-eu-ecolabel / 1420)
2 Environmental management and independent assessment system is intended for all legal entities and natural persons-

craftsmen, in other words, all public and private organizations that perform a certain economic or service activity with a certain
impact on the environment in order to assess the impact of their activity on the environment and improve it. (Ministry of
Economy and Sustainable Development, EMAS, https://mingor.gov.hr/o-ministarstvu-1065/djelokrug/uprava-za-klimatske-
aktivnosti-1879/eko-oznake/emas-1422/1422)

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The latest Public Procurement Act (LPP 2016) states one of the most important changes, and
that is the obligation to use the ENP3 criteria as the only criterion for the selection of bids. This
enables the inclusion of PPT criteria in public procurement procedures, which achieves multiple
positive effects ranging from environmental, social to financial (PPT,
https://zelenanabava.hr/hr-politika/)

2.2. PPL Benchmark

The concept of green public procurement is based on the establishment of precise, clear,
verifiable environmental criteria for goods, works or services. Benchmarks for the PPL are
professional and technical indicators of environmental impact over the life cycle of certain
groups of products and services (Ciglević, 2016). Benchmarks have been developed for those
product or service groups that are largely procured in public procurement procedures. Likewise,
these same products or services have a significant impact on the environment. The benchmarks
were developed by the European Commission (EC) with the Joint Research Center (JRC) and
with representatives of EU Member States. The criteria are not subject to the legislative
procedure but are adopted by the PPL Advisory Group (the EC's advisory body on general
matters of the PPL, which is made up of representatives of the Member States). All benchmarks
are refined and updated depending on changes in the market and changes in European
legislation (Čusek-Slunjski, Munđar, 2017). All benchmarks are designed to be included
directly in the tender dossier and contain information on verification methods. So far,
benchmarks for 21 product and service groups have been developed and are available on the
European Commission's website in 23 official languages (European Commission,
https://ec.europa.eu/environment/gpp/eu_gpp_criteria_en.htm). The main prerequisites for the
creation and development of green benchmarks are technical reports available for each product
group indicating the area, technical characteristics, key environmental impacts during
production, stages of use and end of the product life cycle, existing technologies, related
legislation, market availability and cost considerations (Ciglević, 2016). The benchmarks for
each group of products and services have two levels (National Action Plan for Green Public
Procurement, 2015):
1) Basic criteria - applicable to each contracting authority in the Member States, containing
basic environmental items whose implementation would have a positive impact on the
environment. The benchmarks have been selected and designed in a way that does not
jeopardize significant cost increases and increased administration. These criteria can be
applied with minimal impact on cost or verification process.
2) Comprehensive benchmarks - are applicable to all contracting authorities who are interested
in purchasing the best and most advanced products that are currently available on the
market. Compared to products that have the same or similar functions, these benchmarks
require some cost increase and additional administration. These benchmarks strive to
achieve the best available environmental output.

In order for the procurement procedure to be considered “green” according to the instructions
from the National Action Plan (2015-2017), all basic criteria for the priority product or service
to be procured should be included in the procurement documentation. National Action Plan I
has identified priority groups of products and services most suitable for the implementation of
green benchmarks, such as printing and copying paper, motor vehicles, office and IT
equipment, electricity, telecommunications and mobile telephony services and cleaning
3 The most economically advantageous tender as a concept implies that the contracting authority measures and compares the
economic advantage of an individual tender and compares it with selected criteria related to the subject of procurement that
serve to identify the "best" tender. (Ministry of the Economy, Entrepreneurship and Crafts (2017) Guideline No. 2 Criteria for
selecting the most economically advantageous tender, http://www.javnanabava.hr/userdocsimages/Smjernice_01-ENP.pdf)

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services. These priority groups are the results of the analysis of the practice of other EU Member
States and the consideration of indicators of high representation in the total procurement of
goods and services in the Republic of Croatia according to data from the Electronic Public
Procurement Notice of the Republic of Croatia. The National Action Plan II is awaited for the
next period, which should present and adopt new priority groups (Čusek-Slunjski, Munđar,
2017).

3. SUSTAINABLE PUBLIC PROCUREMENT AND PPL

In their procurement decisions, public authorities in Europe implement not only green public
procurement, but also sustainable public procurement, thus covering different criteria.
Sustainable public procurement consists of several segments, and green public procurement is
only part of the environmental aspect within sustainable public procurement. In addition, green
public procurement has been supported by a number of EU policies as one of the initiators for
sustainable development (Rainville, 2016). Sustainable public procurement has also been
developed through practical attempts to introduce elements of sustainable development into
public procurement procedures (Fisher, 2013). Sustainable public procurement is a process in
which organizations meet their needs for goods, works or services whose application will work
for the benefit of society and the economy while minimizing damage to the environment
(Shakya, 2019). Another definition of sustainable public procurement is a procedure in which
contracting authorities procure goods, works or services taking into account economic aspects:
quality, availability, functionality, best value for money criteria, environmental aspects: "green
public procurement" in terms of the environmental effects that a product or service has during
its existence or provision, social aspects: effects on poverty eradication, equality in the
distribution of resources, working conditions and human rights (Šikić, Turudić, 2017). In
accordance with the above, sustainable public procurement consists of the so-called "three
pillars", which relate to economic development, social development and environmental
protection (UNEP, 2011). Since the primary goal of any public procurement procedure must be
the best value for money and rational spending of budget funds, the goals of sustainable
development are characterized as secondary goals of sustainable public procurement
procedures. By meeting these secondary objectives, sustainable public procurement can
contribute directly to contract performance (for example, when a tenderer reduces carbon
emissions related to the production or delivery of a product or service or employs members of
vulnerable groups), or indirectly by encouraging economic operators to change their business
practices. (Semple, 2015). However, as with any other concept, the implementation of the
principle of sustainable public procurement encounters some criticisms and problems in
practice. One of the main objections is how sustainable public procurement further complicates
the public procurement process, which is inherently complex and not at all easy to implement,
makes it more efficient to spend budget funds and makes public procurement procedures more
expensive. Another objection to this concept is the fear that sustainable public procurement
could lead to differential treatment of domestic and foreign bidders in tender specifications (for
example, emphasizing the importance of recycled content in paper procurement, and knowing
that domestic producers mainly produce paper by recycling, foreign bidders who use mostly
non - recycled raw materials in paper production may be disadvantaged). Also, emphasizing
certificates of sustainable business as one of the conditions for joining the tender may have a
discriminatory effect on bidders who do not have such certificates, as reliance on eco-labels for
products can have the same effect (Šikić, Turudić, 2017). All the above situations and current
complaints could lead to a violation of the main principles defined by law in the field of public
procurement. Overall, all the principles of sustainable development are becoming increasingly
important and will become over time a determinant without which organizations and ultimately
every state will not be able to operate.

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Therefore, sustainable development has been observed as one enormous project, a long-term
process, and a concept of balanced development in the future.

4. CONCLUSION
Sustainable development is generally a project of the future. In recent years, environmental
protection has been one of the main topics of the modern economy. The promotion of activities
for environmental protection and business aimed at sustainable development is represented in
all areas, so great emphasis is placed on green and sustainable public procurement. In recent
years, there has been a growing political commitment to promoting green public procurement
internationally. The most important thing for any public procurement procedure is the
preparatory phase, regardless of whether green public procurement will be included in the
procedure. When choosing a procedure, the contracting authority should be prepared and
consider at what stages the environmental criteria can be applied. Green public procurement
through which more efficient and less harmful goods, work or services are procured, has
significant support in the policies of the European Union, but also of the Republic of Croatia.
If authorities or contracting authorities decide to purchase goods, works or services with a lower
environmental impact, they will greatly contribute to local, regional, national, and international
sustainability goals. Although there are certain prejudices and objections about the possible
problems and consequences that may arise through green public procurement, the successful
practice of European countries nevertheless changes such an attitude and opinion. The potential
benefits of implementing green and sustainable public procurement are known both locally and
globally. By including various criteria with an emphasis on the environmental aspect
represented in this paper as a condition in public procurement procedures, states can
significantly encourage responsible business and improve the well-being of their citizens. The
representation of green public procurement is already evident in numerous concluded contracts.
Further investment, development and promotion of this concept should result in even greater
and better implementation.

LITERATURE:
1. Ciglević, M. (2016). Zelena javna nabava. Porezni vjesnik, br. 7-8.
2. Čusek-Slunjski, M., Munđar, D. (2017). Izazovi i mogućnosti provedbe zelene javne
nabave. Riznica, 10 , 44-47.
3. De Leonardis, F. (2011). Green public procurement: From recommendation to
obligation. International Journal of Public Administration, 34(1-2), 110-113.
4. European Commission, EU GPP Criteria, Environment (https://ec.europa.eu/environment/
gpp/eu_gpp_criteria_en.htm)
5. Fisher, E. (2013). The Power of Purchase. European Procurement & Public Private
Partnership Law Review, 8(1), 2-7.
6. Ministarstvo gospodarstva i održivog razvoja, Znak zaštite okoliša Europske unije - EU
Ecolabel (https://mingor.gov.hr/o-ministarstvu-1065/djelokrug/uprava-za-klimatske-aktivn
osti-1879/eko-oznake/znak-zastite-okolisa-europske-unije-eu-ecolabel/1420)
7. Ministarstvo gospodarstva i održivog razvoja, EMAS (https://mingor.gov.hr/o-
ministarstvu-1065/djelokrug/uprava-za-klimatske-aktivnosti-1879/eko-oznake/emas-
1422/1422)
8. Ministarstvo gospodarstva, poduzetništva i obrta (2017). Smjernice br. 2 Kriteriji za odabir
ekonomski najpovoljnije ponude, (http://www.javnanabava.hr/userdocsimages/Smjernice_
01-ENP.pdf)
9. Ministarstvo zaštite okoliša i prirode (2015). Nacionalni akcijski plan za zelenu javnu
nabavu, za razdoblje od 2015. do 2017. godine s pogledom do 2020. godine
(https://www.azu.hr/media/1154/nacionalni-akcijski-plan-za-zelenu-javnu-nabavu.pdf)

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10. Ministarstvo zaštite okoliša i prirode (2015). Zelena javna nabava, Postupak poticanja
javnih tijela na kupovinu zelenih proizvoda i usluga (https://klima.hr/razno/natjecaji/
Zelena_javna_nabava_brosura_2015.pdf)
11. Publications Office of the European Union (2016). Buying green! A handbook on green
public procurement 3rd Edition (https://ec.europa.eu/environment/gpp/pdf/Buying-Green-
Handbook-3rd-Edition.pdf)
12. Publications Office of the European Union (2011). Buying green! A handbook on green
public procurement 2nd Edition (https://ec.europa.eu/environment/gpp/pdf/Buying_green
_second_edition_2011.pdf)
13. Raguž G., Blažević, Z. (2017.) Bilten javne nabave u Republici Hrvatskoj, Vodič kroz novi
sustav javne nabave. Temporis savjetovanje d.o.o., br. 5, Zagreb.
14. Rainville, A. (2016). Standards in green public procurement–A framework to enhance
innovation. Journal of Cleaner Production, 167, 1029-1037.
15. Semple, A. (2015). The Link to the Subject-Matter: A Glass Ceiling for Sustainable Public
Contracts?, Sustainable public procurement under EU law: New perspectives on the state
as stakeholder, Cambridge University Press, Cambridge.
16. Shakya, R. K. (Ed.). (2019). Green Public Procurement Strategies for Environmental
Sustainability. IGI Global.
17. Šikić, M., Turudić, M. (2017). Održiva javna nabava. Zbornik Pravnog fakulteta Sveučilišta
u Rijeci, 38(1), 419-446.
18. Thai, K. V. (2001). Public procurement re-examined. Journal of Public Procurement, 1(1),
9-50.
19. UNEP. (2011). Buying for the better world: A guide on sustainable procurement for the UN
system. Paris, France: UNEP.
20. Zelena javna nabava, Strateški okvir (https://zelenanabava.hr/hr-politika/)

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 83rd International Scientific Conference on Economic and Social Development - "Green Marketing" – Varazdin, 2-3 June, 2022

INTERDEPENDENGCE OF STAKEHOLDERS IN A TOURIST

DESTINATION ACCORDING TO "ZERO" ENVIRONMENTAL
IMPACT
Dijana Vukovic
University North, Jurja Krizanica, Varazdin, Croatia
dvukovic@unin.hr;di.vukovic @gmail.com

Irena Zavrl
FH Burgeland, Austria
Irena.Zavrl@fh-burgenland.at

Anica Hunjet
University North, Jurja Krizanica, Varazdin, Croatia
ahunjet@unin.hr

ABSTRACT
The sharp increase in tourism in the Republic of Croatia has resulted in the emergence of mass
tourism that has negative effects on the natural, social and cultural environment. As a reaction
to mass tourism, there was a need to apply the principles of sustainable tourism. Today, due to
the rising economic standard of citizens of developed countries, the trend of traveling
throughout the year is growing, and the travel period in the pre- and post-season is becoming
increasingly popular. Tourists are increasingly environmentally aware, and seek authentic
experiences, contact and connection with the local community, and appreciate the ecological
preservation and cleanliness of the environment, and the delivery of integrated tourism
products involved a larger number of stakeholders to achieve consistency of green marketing
goals. The main goal of the paper is to point out the need to apply a systematic approach to
stakeholder involvement in achieving sustainability of the tourist destination.
Keywords: green marketing, tourism, sustainable development, stakeholders, stakeholder
interconnection

1. INTRODUCTION
The issue of environmental responsibility in all branches of the economy, as well as in all
spheres of life, is becoming an unavoidable topic today. However, we often witness activities
and behaviors that are exactly the opposite of what is considered environmentally friendly, and
often some actions are presented as environmentally responsible, although they are not. Such
situations are especially noticeable in tourism, given that destinations that present themselves
as ecological are very popular, it is expected that destinations, and hotels that emphasize
environmental responsibility will be more sought after and visited. Also, there are more and
more European Union funds that provide support for environmentally responsible projects, so
this is one reason why what is not environmentally responsible is declared as environmentally
responsible tourism. How environmental sustainability is viewed in the short term, and how it
is not an existential issue, and environmentally responsible behavior often reduces economic
benefits (also, observed in a shorter period of time) raises the question of whether
environmental responsibility in tourism in Croatia is really at the level of which is presented or
is just a "marketing trick" that has the function of attracting as many tourists. On the other hand,
there are hotels on the Adriatic coast that are part of well-known hotel chains, so it can be
expected that all hotels in a chain have the same strategy in terms of sustainable development
and environmental responsibility.

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Therefore, the aim of this paper is to consider and point out various aspects of environmental
sustainability in the hotel industry, but also in tourism, in which the hotel industry is an integral
part, and the main goal of the paper is to point out the positive and negative consequences of
insufficient application of green marketing in sustainable tourism development in Croatian.

2. ECOLOGICAL PROBLEMS IN TOURISM

Life in modern society is based on the principles of a market economy, aimed at achieving the
highest possible profit in all industries, including tourism. In the desire to make as much money
as possible, attention is often not paid to the negative effects that can result from such an
approach. Intensive development of tourism and constant increase in the number of tourists
inevitably leads to potentially negative effects on the environment. Namely, the expansion of
tourism and tourist movement has led to the degradation of many tourist destinations. The
increase in the number of tourists imposes the need for the construction of new tourist facilities
(hotels, restaurants, accommodation facilities) whose expansion requires the improvement of
the infrastructure of the tourist destination, and its careful planning. Capacity building is
accompanied by disturbance of the natural environment and the creation of various types of
waste. The need to build different facilities that are necessary for the functioning of a tourist
destination can lead to a destination that has the potential to be ecological, loses ecological
features. Awareness of the importance of the environment for tourism development has long
existed. In the 1980s, nature protection movements emerged that insisted on the implementation
of tourism development responsibilities. Thus, (Wearing & Neil, 2013) define ecotourism as a
type of tourism that involves traveling to relatively untouched and unpolluted nature in order
to study and enjoy the landscape, its flora and fauna, but also cultural heritage. Sustainable
development is impossible without the involvement of all actors in tourism development and it
has the task of uniting economic, social and environmental policies to meet the needs of current
tourists, domicile population, nature needs, and which will not jeopardize the ability of future
generations to meet tourism needs and / or needs. life in the destination. A sustainable tourist
destination is an integral tourist resource where all components of a sustainable tourist
destination are interconnected. No component of a sustainable tourist destination can function
independently (Vuković, 2018: 138):
• the unity of natural and anthropogenic values, and the protection of cultural and natural
resources affects the positioning of a sustainable tourist destination in the global tourism
market. Evaluating natural, anthropogenic and ethno-professional values are the basis for
planning sustainable development in tourism.
• Diversity and authenticity of the tourist offer - Diversity and authenticity in a sustainable
tourist destination can be included through various forms of tourist offer. The diversity and
authenticity of the tourist offer can be observed through three basic categories: the diversity
and authenticity of the destination space, the diversity and authenticity of the event, the
diversity and authenticity of tourism. During his life, a person has free time that he wants
to spend in a way that satisfies some of his inner needs: to acquire new knowledge, creative
creativity, hobbies, learning about the traditions and way of life of the domicile population.
The diversity and authenticity of a sustainable tourist destination offers consumers in
tourism the opportunity to develop their own creativity and personality through programs
of diversity and authenticity.
• comfort, ie available accommodation and food capacities today must be better and of better
quality than living and eating at home.
• availability and propulsiveness of a sustainable tourist destination - built infrastructure and
communication are one of the most important factors as they shorten the time spent from
the place of tourist demand to the place of tourist offer, which reduces the total cost of
tourism.

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• The kindness and hospitality of the domicile population creates a sense of comfort and
contributes to the creation of greater satisfaction..

3. THE ROLE AND IMPORTANCE OF GREEN MARKETING IN SUSTAINABLE

DEVELOPMENT
The first way in which marketing can achieve the sustainability of tourism in the Republic of
Croatia within its function is green marketing. It is clear from the model of sustainable
development that green marketing, ie one that focuses on environmental issues, is actually part
of sustainable marketing. Implementing a green marketing strategy very often involves
focusing on specific individual activities such as promoting green products and characteristics,
or designing less environmentally invasive products. However, the modern understanding of
green marketing implies avoiding the use of one-off environmental initiatives solely for the
purpose of public relations and creating projects that are multidisciplinary from a macro
perspective (Kilbourne, 1998). Green marketing is defined as the study of all efforts related to
the consumption, production, distribution, promotion and packaging of products, in a way that
is sensitive and consistent with environmental concerns. (Dahlstrom, 2010: p. 6) The American
Marketing Association (AMA.org Dictionary, 2014) calls green marketing both the marketing
of environmentally safe products and the marketing of products designed to reduce negative
effects on the physical environment or improve its quality. . As an illustration of the
development of definitions of green / sustainable / environmental marketing from the 1970s to
the present, it is worth noting three important definitions (selected from Dangelico and
Vocalelli, 2017: 1268, Kotler and Armstrong, 2012: 582): “green marketing is a holistic process
responsible for identification , anticipating and meeting the needs of consumers and society in
a profitable and sustainable way ”(Peattie, 1995); “Marketing products that are considered
environmentally safe” (AMA, 2012); "Sustainable marketing calls for socially and
environmentally responsible activities that meet the needs of consumers and businesses, while
protecting the environment and strengthening the ability of future generations to meet their
needs" (Kotler and Armstrong, 2012). In any case, in theory it is holistic an integrated approach,
which, when properly applied, seeks to reconcile the satisfaction of consumer needs and the
requirements of reducing environmental degradation. Otmann (2008) listed five simple rules of
green marketing with the aim of capitalizing on market opportunities:
• Think and act holistically - it is no longer enough to focus only on functional benefits;
• Take advantage of the opportunities that green marketing provides in the form of involving
consumers on an emotional level, while building brand value;
• The way one communicates is a critical element of success (and helps to avoid “green
washing”);
• Eco-innovations are new ways to improve sales results;
• Strive for "zero" environmental impact.

As the popularity of environmental care grows, so does the demand for green products, which
is a clear motivation for companies to start thinking strategically about green marketing. In
addition, Chen (2010) cites five other reasons why companies should develop green marketing:
aligning with environmental pressures, creating a comparative advantage, improving corporate
image, seeking new markets or opportunities, and expanding production value. Green
marketing can be applied at three levels: tactical, quasi-strategic, and strategic (Polonsky and
Rosenberger, 2001). Therefore, it is clear that due to the tactical and quasi-strategic approach
to environmentally oriented initiatives, there is skepticism and consumer distrust. Strategic
"greening" presupposes a strategic approach and coordinated efforts of the company to integrate
environmental problems into all its functional parts. Green marketing is the subject of many
controversies due to which consumers lose confidence in the sincerity of the company's

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intentions to be responsible through this function, so the authors emphasize that it must be
complemented by the activities of other components of sustainable marketing. As a good
example of a company that implements green marketing at the strategic level, Toyota can serve
with its hybrid car Prius (Financial Times, 2014). Toyota has established an eco-technology
development division, not in response to legal and regulatory requirements, but to set the
direction for the entire industry and thus gain a unique competitive advantage. In the very
beginnings of the Prius market, the results were not enchanting, but with a combination of rising
fuel prices, reduced production costs, and thus product prices and the development of the image
of a desirable and trendy car, sales results surprised the entire market. Many attribute their
success to understanding the needs of green consumers who sought not just an “economical
vehicle” but a kind of revolution in which they could participate, and Toyota delivered them
not a car but a very bold statement of a certain lifestyle. Although strategic greening is the
"right" dimension of green marketing, an effective approach to modern marketing is
significantly different from reducing the harmful effects of products and companies because it
involves integrated transformational change, which creates value for individuals and societies
as well as the natural environment. it is impossible to imagine the sustainable development of
tourism in the Republic of Croatia.

3.1. The importance of green marketing for tourists

Marketing as we follow and know it today was created by a radical change in the company's
focus on the development of production and products according to consumer desires and needs,
and the focus in the problem is the consumer in tourism. The initiative to raise awareness of the
problem of "unsustainable" development of the Planet, which came from the institutional level,
introduced changes in the behavior of market segments, ie tourists whose concerns about
environmental protection and sustainable development began to change their behavior. Thus,
sustainable business has received another new motive, which comes from the market, in the
form of demand for more sustainable solutions. Many tourism companies look at "sustainable
tourism consumers" solely through their profitability, but this should by no means be the case
with sustainable marketing. It is necessary to understand and know how consumers in tourism
think and decide, and to fit this into the overall intentions of more responsible business.
Kilbourne and Carlson (2008) emphasize that the key to the problem of consumption is the
anthropometric value system at the core of the Western dominant social paradigm and argue
that all micro-changes in consumption patterns are doomed if the environment and society are
a radical resource. don't change. The reason for the relatively benevolent understanding of
contemporary problems of society and the environment on the part of consumers lies in the fact
that they perceive them as something that is far in the future and therefore should not be too
worrying at the moment. Therefore, they often do not incorporate future outcomes and
consequences into the present decision-making process (Polonsky, 2011). In developing its
programs, sustainable marketing must look for ways to offer solutions to consumers that are
sustainable, but because of this problem not necessarily communicated as a major
differentiation advantage because it does not guarantee recognition by consumers. With the
development of responsible versions of the marketing approach, the concepts of green and
ethical consumerism have developed, a form of consumption in which the consumer in tourism
takes into account not only their own good, but also social and environmental values, ideals and
ideologies (Uusitalo and Oksanen, 2004). Accordingly, ethical consumerism is a buying
behavior that reflects concerns about unethical and unfair global trends such as child labor,
underpaid work, human rights violations, etc., while green consumerism refers to concerns
about environmental issues. Sustainability-oriented consumer research in tourism includes
different concepts of sustainable purchasing behavior and consumption, and it bears different
names.

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Thus, research finds names such as: green, greener, sustainable, pro-ecological, pro-social,
environmentally conscious, altruistic, ecological, ethical or alternative consumption. Research
questions and topics in this area can be divided into four different groups (Wells et al., 2011):
• Profiling consumers in tourism with regard to sustainability concerns in order to create
meaningful market segments (Straughan and Roberts, 1999),
• Profiling types of consumers in tourism in order to understand how they can be motivated
for more sustainable consumption (Jacskon, 2005),
• Testing the acceptability of premium prices for more sustainable products (Laroche, Bergon
and Barbaro-Forleo, 2001),
• The goal of determining the background of frequent and significant discrepancies between
the expressed will of consumers in tourism to make their consumption more sustainable and
their actual behavior in relation to the perceived value of the destination (Vuković, 2018).

Looking through history, the impact on the environment has largely been a byproduct of human
need for physical comfort, mobility, entertainment, power, status, personal safety, maintaining
tradition and the like, so people have created technologies and organizations to fulfill such
desires. Only recently, according to Stern (2000), has there been a change in which
environmental concerns have become a relevant influence in decision-making and consumers
in tourism behave desirable in order to have a positive impact on the environment. Such
behavior, according to the author, can be intent-oriented, where the focus is on the attitudes and
motives of consumers in tourism to improve the environment, and it is explored to understand
how they can be changed; or it can be oriented to the impact which is then reduced to
environmental activism, non-activist behavior in the public sector and the like. The impact of a
particular behavior can be differentiated from its intention associated with that behavior, which
is extremely important in considering this area. It would be intuitive to conclude that clear
intentions and attitudes result in consistent behavior, however this is not the case in case of
environmental concerns, more precisely the results of the conducted studies are inconsistent.
For example, Simmons and Widmar (1990) demonstrated a statistically significant positive
association between environmental care and waste recycling while Schlagemilch et al (1996)
suggested a very weak association between attitudes and behaviors in environmental care
issues, while Vining and Ebreo (1990) ) did not find any connection. Inconsistencies in results
are interpreted differently by different authors. Carrigan et al (2011) point out that most studies
aimed at exploring the gap between attitudes and behavior are deprived of respect for the social
context, social processes, and structures in which behavior occurs. Consumption is a social
activity that reflects social life and status. For example, being an ethical consumer is much
easier if you live in an area full of "ethical, fair trade" retailers, organic resellers and various
social assistance initiatives, than if you live in an uninhabited area, scarce in all segments of
content. In the latter, even very strong intentions will not result in behavior. Kollmus and
Ageyman (2002) have very thoroughly analyzed the different models and factors that define
the gap between intentions and behaviors in environmental care. They came to the conclusion
that there is no single model that adequately explains the reason why people who have a strong
concern and intention to protect the environment, do not achieve this by their behavior.
Analyzing existing published studies to determine why environmental and social values may
have a weak impact on purchasing decisions, Young et al (2010) concluded that the reasons lie
in brand strength, culture, demographics, financial strength, habits, lack of information,
lifestyle, personality or trade-off of ethical factors. Another relevant phenomenon that occurs
in consumers in tourism, and is related to sustainable and responsible products, is the
ambivalence of consumers and tourists - having both positive and negative impressions. Chang
(2011) suggests two possible explanations; because they can have both positive and negative
perceptions of green products at the same time, and / or because their negative perceptions can

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independently predict ambivalent attitudes. The research concluded that negative perceptions,
such as skepticism that is significant in ambivalent attitudes, have a statistically significant
impact on attitudes about green products. This conclusion suggests that tourists, for example,
due to skepticism about the real impact of green products, or the fact that their contribution is
minor in relation to the size of the problem, due to such an attitude, even having awareness of
the problem, do not respond to stimuli behavior that is consistent with sustainability (in this
case ecology).

4. RESEARCH METHODOLOGY
The objectives of the paper are to deepen the understanding of stakeholder interests and the
effects of stakeholder interests on the sustainability of forms of tourism denotated through the
application of green tourism. According to the concept of sustainability in tourism, conflicts
among stakeholders are the result of unequal power and inequality in the realization of interests
in the development of tourism. In accordance with the above, the hypotheses of the paper are
defined:
• Hypothesis H1: Green tourist destination marketing is unique in terms of sustainability.
• Hypothesis H2: Green and sustainable tourism preserves the atmosphere and integrity of
the site and questions the appropriateness of tourism development in the destination.
• Hypothesis H3: Green marketing in tourism involves relevant stakeholders in destination
development, benefits them and respects their sensitivity.

Modern scientific knowledge of sustainable tourism insists on tailor-made management, which

respects the specifics of resources and space in which tourism takes place and respects the
dynamic interests of different stakeholder groups, with the most vulnerable groups local
community and tourists willing to compromise. The set hypotheses enable the structuring of
existing knowledge about the complexity of stakeholder interests within the paradigm of
sustainability and opens questions whose answers require a comprehensive review of the
literature and further research on this topic. The research was conducted on an appropriate
intentional sample consisting of representatives of local governments, tourist boards,
employees in travel agencies, representatives of hotels, family farms, LAGs and local people
who in accordance with business activities and life in the tourist destination recognized and
respected aspects of sustainability. application of the concept, the relationship between
stakeholders, the use of EU funds, green tourism, demographic policy, excessive investment in
the destination and the establishment of a unique marketing model of management and
implementation of sustainability based on elements of green marketing. The sample consisted
of 326 respondents. Sample structure: representatives of local governments (3.99%), tourist
boards (9.20%), employees in tourist boards (15.03%), representatives of hotels (23%), family
farms (11.04%), LAG (14.11%), local population (23.63%). For the purpose of testing
hypotheses, a survey was made and the Likert scale was used, which consists of 5 statements,
and investigates whether respondents express a positive or negative attitude towards an object
of attitude. Values were added to the statements. Grade (1) disagree at all, grade (2) disagree,
grade (3) neither agree nor disagree, grade (4) agree, grade (5) completely agree. In order to
test the set hypotheses, a non-parametric equality test of continuous probabilities used for the
purpose of testing hypotheses was selected. In essence, the above is equivalent to setting the
mean and standard deviation. The mean square deviation of numerical values from the
arithmetic mean is small, which leads to the conclusion that the obtained results of the
arithmetic mean represent small results. Before testing the research hypotheses of this doctoral
thesis, it is necessary to test the level of reliability of measurement scales with the Cronbach
Alpha coefficient. Crombah alpha less than 0.6 is considered unsatisfactory reliability and
greater than 0.7 represents satisfactory reliability.

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From table no.1. it can be seen that the Cronbach Alpha coefficient is 0.799, which means that
the measuring scales used have a high level of reliability.

Arithmetic Minimum – Cronbach

N SD
middle maksimum Alpha
The originality of green marketing 326 4,30 0,9 1–5
Destination integrity protection 326 4,27 0,9 1–5
Connection with tradition 326 4,26 0,9 1–5
0,799
Destination development control 326 4,98 0,1 1–5
Involvement of all stakeholders in 3,96 1,2
326 1–5
management
Note: ratings are given on a Likert scale of 1 - 5 (1 - least important, 5 - most important) SD - standard deviation
Table 1: Cronbach Alpha coefficient
(Source: own research)

In table no. 1. the Cronbach’s Alpha coefficient is shown. The results of the Cronbach's Alpha
coefficient were tested on five particles: "Green marketing strategies applied in the destination
must be adapted to the destination, ie the originality of green marketing strategies must be taken
into account during development", "Green marketing strategies have the function of protecting
destination integrity", " Green marketing strategies are linked to the tradition of the destination
"," Control of destination development is possible only in accordance with nature protection ","
Involvement of all stakeholders is necessary in the management process "and show that
Cronbach's Alpha coefficient is 799, which indicates high reliability of the measuring
instrument. . The student's t test tested the difference in the assessment of knowledge of the role
and importance of green marketing strategies in relation to whether they participated in
destination management and whether respondents assess whether the destination or tourism
companies have the potential to implement green marketing strategies. Significance levels were
set at α = 0.05. The T test shown in Table 2 has the task of determining the difference between
the mean values of those who believe that they do not have the potential to develop green
marketing strategies and those who believe that they have the potential to develop.

Table following on the next page

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Assessment of the role and importance of green marketing in the concept of sustainability

Arithmetic mean 95% range P*

(standard deviation) reliability
Difference t (df)
No Have
From To
potential potential
Green marketing
synergy of
economic benefits, 3,16 (1,1) 3,82 (1,1) -0,658 -1,0 -0,4 -4,2 (251) <0,001
care for the
environment
Green marketing -
community 3,64 (1,0) 4,27 (0,9) -0,632 -0,9 -0,4 -4,8 (251) <0,001
involvement
Offer local food
prepared in the 3,79 (1,0) 4,34 (0,9) -0,553 -0,8 -0,3 -4,3 (251) <0,001
traditional way
Offering local food
prepared in the
traditional way The
use of renewable 3,69 (1,0) 4,21 (0,9) -0,523 -0,8 -0,3 -3,9 (251) <0,001
energy sources is a
necessary element
of sustainability
Waste recycling
3,49 (1,1) 4,13 (1,0) -0,642 -0,9 -0,4 -4,6 (251) <0,001
reduces costs
The use of
rainwater
3,54 (1,1) 4,18 (1,0) -0,640 -0,9 -0,4 -4,5 (251) <0,001
contributes to
sustainability
Greening
contributes to the
3,42 (1,1) 4,12 (0,9) -0,706 -1,0 -0,4 -5 (251) <0,001
harmony of staying
in nature
A quality-based
tourist offer takes
3,51 (1,1) 4,25 (0,9) -0,740 -1,0 -0,5 -5,2 (251) <0,001
care of the
environment
Green tourism
preserves the 3,51 (1,1) 4,10 (1,0) -0,783 -1,1 -0,5 -5,4 (251) <0,001
integrity of the site
Green tourism takes
care of future 3,67 (1,0) 4,29 (0,9) -0,619 -0,9 -0,4 -4,6 (251) <0,001
development
Green tourism
involves all
3,88 (1,1) 4,47 (0,8) -0,587 -0,8 -0,3 -4,7 (251) <0,001
stakeholders at the
destination level
Zeleni turizam
donosi korist svim
dionicima bez
3,51 (1,2) 4,07 (1,0) -0,756 -1,1 -0,5 -5,0 (251) <0,001
obzira na njihove
međusobne
konflikte
Green tourism
benefits all
stakeholders
3,57 (1,0) 4,12 (1,0) -0,556 -0,8 -0,3 -4,0 (251) <0,001
regardless of their
conflicts with each
other
Table 2: T test for hypothesis testing
(Source: own research)

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The estimates shown in Table 2 suggest that the average values are higher for all respondents
who estimate that the destination has the potential to develop and implement green marketing
strategies to protect nature and the environment of the tourist destination, following the results:
"Green marketing must ensure synergy of economic gain and care for the environment
”(difference -0.658, 95% confidence range difference from -1.1 to -0.4, Student's t-test, p
<0.001); "Green marketing ensures community involvement" (difference -0.632, 95%
confidence range difference -0.9 to -0.4, Student's t-test, p <0.001); "Local food offer prepared
in the traditional way" (difference -0.553, 95% confidence range difference from -0.8 to -03,
Student's t-test, p <0.001); "Green tourism includes all stakeholders at the destination level"
(difference -0.587, 95% confidence range difference -0.8 to -0.3), Student's t-test, p <0.001) In
accordance with the presented results, it can be concluded that tourism is influenced by different
individuals and groups that are stakeholders and at the same time affects them. Stakeholder
theory derives from the literature of strategic management, and is applied in tourism to define
who they are, what their role and interests are in relation to tourism development and to identify
which effects of tourism need to be supported and eliminated. The link between stakeholder
theory and the sustainability paradigm is reflected in tourism management. Stakeholders own
and control various resources that are valorized in tourism, which creates their interdependence.
Tourist resources are scarce. In order for future generations to be able to use them, tourism
valorization needs to be managed taking into account the economic and socio-cultural needs of
stakeholders and the need to protect the environment, ie by applying the concept of
sustainability. Exploring the interests of stakeholders contributes to understanding their idea of
the appropriate direction of tourism development, which gives management the opportunity to
find ways and means to regulate and direct tourism. The management of a tourism organization
or destination should be aware of the fact that it always has the opportunity and duty to manage
tourism that benefits stakeholders. Given the benefits that green marketing has in the overall
environment, in the future will be successful those tourist destinations that plan, organize,
implement and control the marketing strategies of all stakeholders in the integrated tourism
product. Tourists perceive the destination differently from the local population and in order to
encourage more responsible tourist behavior, it is necessary to conduct green marketing
activities that begin by informing tourists about local customs, local environment and ecology,
as well as encouraging the arrival of those tourists who will respect the local tradition.

5. CONCLUSION
Green marketing in sustainable tourism is focused on the natural and socio-cultural
environment of the destination and socially responsible business of all stakeholders involved in
the delivery of integrated tourism products and ethical business. The future of sustainable
tourism can be positively influenced by the implementation of green marketing, which will be
based on making marketing decisions that are environmental, social and economic. Green
marketing strategies represent a fundamental component in the development of sustainable
tourist destinations. By implementing green marketing strategies based on sustainability goals,
assessing, managing and controlling progress in achieving sustainability goals, tourist
destinations are strengthening their capacities and becoming more competitive in the global
tourism market. The implementation of green marketing activities and the effects of sustainable
tourism are a permanent process that continuously monitors the changing environment of the
tourist destination, which means that internal control is necessary so that the goals of green
marketing activities can monitor environmental policy and legislation.

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LITERATURE:
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Community Social Marketing Approach to Sustainable Living. Journal of Business Ethics,
100(3), pp. 515–534.
2. Dahlstrom, R. (2010) Green marketing management. Cengage Learning
3. Dangelico, R. M., Vocalelli, D. (2017) “Green Marketing” An analysis of definitions,
strategy steps, and tools thorugh a systematic review of the literature, Journal of Cleaner
Production, Vol. 165, pp. 1263-1279. https://doi.org/10.1016/j. jclepro.2017.07.184 (date
of access: 122.05.2022.)
4. Jackson, T. (2009). Prosperity without growth: economics for a finite planet. London; New
York: Earthscan.
5. Kilbourne, W. E., & Carlson, L. (2008). The dominant social paradigm, consumption, and
environmental attitudes: can macromarketing education help?. Journal of Macromarketing,
28(2), pp. 106-121.
6. Kollmuss, A., & Agyeman, J. (2002). Mind the gap: why do people act environmentally
and what are the barriers to pro-environmental behavior?.Environmental education
research, 8(3), pp. 239-260.
7. Kotler, P. (2011) Reinventing Marketing to Manage the Environmental Imperative, Journal
of Marketing, Vol. 75, p. 132- 135. https://doi.org/10.1509/jmkg.75.4.132 (date of access:
08.05.2022.)
8. Kotler, P. i Armstrong, G. (2012) Principles of Marketing, 14th ed., Pearson Education,
Inc., publishing as Prentice Hall, One Lake Street, Upper Saddle River, New Jersey
9. Kumar, V., Rahman, Z., Kazmi, A. A., & Goyal, P. (2012). Evolution of sustainability as
marketing strategy: Beginning of new era. Procedia-Social and Behavioral Sciences, 37,
pp. 482-489.
10. Kumar, P. (2014), “Greening retail: an Indian experience”, International Journal of Retail
and Distribution Management, Vol. 42 No. 7, pp. 613-625.
11. Laroche, M., Bergeron, J., & Barbaro-Forleo, G. (2001). Targeting consumers who are
willing to pay more for environmentally friendly products. Journal of consumer marketing,
18(6), pp. 503-520.
12. Ottman, J. A. (2008). The five simple rules of green marketing. Design management review,
19(4), pp.65-69
13. Peattie, K. (1995). Environmental marketing management: Meeting the green challenge.
London: Pitman.
14. Peattie, K. (1999). Rethinking marketing: shifting to a greener paradigm. Greener
marketing: a global perspective on greening marketing practice, pp.57(70).
15. Peattie, K. (1999). Trappings versus substance in the greening of marketing planning.
Journal of Strategic Marketing, 7(2), pp.131-148.
16. Peattie, K. (2001). Golden goose or wild goose? The hunt for the green consumer. Business
Strategy & the Environment (John Wiley & Sons, Inc), 10(4), str. 187–199.
17. Polonsky, M. J., & Rosenberger III, P. J. (2001). Reevaluating green marketing: a strategic
approach. Business Horizons, 44(5), pp. 21-30.
18. Schlegelmilch, B. B., Bohlen, G. M., & Diamontopolous, A. (1996). The link between green
purchasing decisions and measures of environmental consciousness. European Journal of
Marketing, 30(5), pp. 35–55.
19. Simmons, D., & Widmar, R. (1990). Motivations and barriers to recycling: Toward a
strategy for public education. The Journal of Environmental Education, 22(1), pp.13-18.
20. Straughan, R. D., & Roberts, J. A. (1999). Environmental segmentation alternatives: a look
at green consumer behavior in the new millennium. Journal of consumer marketing, 16(6),
pp. 558-575.

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21. Vining, J., & Ebreo, A. (1990). What makes a recycler? A comparison of recyclers and
nonrecyclers. Environment and behavior, 22(1), pp.55-73.
22. Vuković, D. (2018): Perceived value of a sustainable tourist destination in terms of quality,
Doctoral dissertation, University of Rijeka
23. Wearing, S., & Neil, J. (2000). Refiguring self and identity through volunteer tourism.
Society and Leisure, 23(2), 389e419.
24. Wearing, S., & Neil, J. (2003). Expanding sustainable tourism’s conceptualization:
ecotourism, volunteerism and serious leisure. In S. F. McCool, & R. N. Moisey (Eds.),
Tourism, recreation and sustainability: Linking culture and the environment (pp. 233e254).
Wallingford: CABI
25. Wells, V. K., Ponting, C. A., & Peattie, K. (2011). Behaviour and climate change:
Consumer perceptions of responsibility. Journal of Marketing Management, 27(7/8), pp.
808–833.

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 83rd International Scientific Conference on Economic and Social Development - "Green Marketing" – Varazdin, 2-3 June, 2022

BITCOIN AS A SUBSTITUTE FOR CURRENT CURRENCIES

Ismet Voka
European University of Tirana,
Faculty of Economics Business and Development, Albania
ismet.voka@uet.edu.al

Filipos Ruxho
Universum College, Kosovo, Faculty of Business and Management, Albania
filip.ruxho@universum-ks.org

ABSTRACT
The purpose of this study is to examine the hypothesis whether Bitcoin, this decentralized digital
currency, can become a successful alternative to other currencies that are currently
consolidated in the market as well as regulated through legislation. For this purpose, we will
use descriptive analysis based on standard deviation which is used to analyze Bitcoin volatility
by calculating daily logarithmic returns as well as monthly logarithmic returns, expressed as a
percentage. To test this hypothesis, a comparison is made between the volatility of Bitcoin with
the volatility of gold and the euro currency, while the base currency for comparison is the US
dollar, which is considered a global base currency.
Keywords: Bitcoin, digital currency, virtual currency, cryptocurrency

1. INTRODUCTION
The emergence of innovative digitized financial channels, instruments, systems and assets is
transforming the world of money and finance at a rapid pace, creating new paradigms for
financial transactions and creating alternative exchange channels. Although commerce and
communication are now digital, something that has hardly changed over the years and the
internet revolution is the broker of any trade, currency. Bitcoin, this decentralized digital
cryptocurrency, without a central bank, is one of the most discussed phenomena in recent years.
Bitcoin was launched in 2009 by Satoshi Nakamoto who is a nickname for an individual or a
group of people. Although cryptocurrencies already represented a well-known concept as early
as November 2008, Satoshi Nakamoto published a document "Bitcoin: an electronic peer-to-
peer cash system". The peer-to-peer network described was a breakthrough because it did not
rely on trust between agents but on IT advancements, making Bitcoin the first digital
cryptocurrency decentralized in transaction execution, which operates without the mediation of
the authorities. Rather, it relies on proof of computer-generated cryptographic work. Nakamoto
has referred to Bitcoin as an electronic payment system, but over time many individuals have
begun to call it a cryptocurrency or simple currency because of its features. Bitcoin introduced
the world with new possibilities regarding the way payments are made, data management and
most importantly, the concept of decentralization. Acceptance of this currency was relatively
slow at first, although the media widely disseminated the idea of Bitcoin as a decentralized
digital currency. Two of the new aspects that Bitcoin introduced are: the concept of non-
oversight by any regulatory or governmental authority, allowing free market-value exchanges
based on supply-demand, and the possibility of having a new electronic payment system
without intermediaries, creating the advantage of being faster, cheaper and more secure through
technology. Although, Bitcoin has benefits, there are also some obstacles in increasing its
popularity and acceptance in the market. Currency is decentralized which means that it has no
control by regulatory or governmental authorities and can therefore be linked to illegal
activities. Given that Bitcoin is spreading widely, the possibility of increasing regulation is also
expected to occur which destroys the idea of decentralization.

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The high level of currency volatility and lack of trust from financial institutions also weakens
users' trust in Bitcoin and makes it a dangerous instrument. The purpose of this paper is to
examine the functions of Bitcoin as well as find a way to determine whether or not it is money
from an economic perspective. To answer the research question, we must first analyze the
functioning of Bitcoin and then understand how Bitcoin can manage to replace current
currencies.

Research question: Is Bitcoin money?

Hypothesis:
• H0: Bitcoin is not money
• Ha: Bitcoin is money

2. LITERATURE REVIEW
There is a lot of feedback about Bitcoin and cryptocurrencies. Since the creation of Bitcoin,
many people have argued that this could be the first global currency. Optimistic groups also
claim that Bitcoin will radically change payments, the economy and even politics around the
world. Dr. Garrick Hileman, an economics historian at Cambridge University, explained in an
interview with CNN his optimistic views on Bitcoin and referred to it as nothing less than an
economic miracle, which would inevitably shape the finance sector in the long run. Pessimistic
groups, on the other hand, label Bitcoin a "hoax" and claim that Bitcoin will collapse inevitably
and spectacularly, including Paul Krugman, a professor at Princeton University named
important of 2015 (The Economist, 2015) .In 2013 Krugman wrote an article in the New York
Times called 'Bitcoin is harmful', where he argues that Bitcoin can never be successful. Bitcoin
is one of the most widely used virtual currencies in recent years worldwide. A virtual currency
is an unregulated form of digital money which is not used or guaranteed by a central bank and
which can act as a means of payment to carry out transactions. These transactions often do not
incur any fees and do not involve banks. Recently, Bitcoin virtual currency has paved the way
for a new generation of decentralized, peer-to-peer virtual currencies - often referred to as
cryptocurrencies. Following the recent rise of this currency, a dozen virtual currencies have
been introduced that have followed the path of Bitcoin. Virtual currencies can be purchased on
an exchange platform using conventional currencies. Using this portfolio, consumers can send
Bitcoins online to anyone who wants to accept them or convert them into conventionally
denominated currencies (such as Euros, Pounds or Dollars). New Bitcoins have been created
online using software-intensive software known as 'Bitcoin miners'. This program allows
customers to "mine" (extract) small amounts of currency through the solution of deliberately
complex algorithms. However, the increase in money supply is fixed so only small amounts are
issued over a period of time.

2.1. Money, Currency and payment system

Currency is a generally accepted form of money which includes coins and banknotes issued by
a government and circulating within an economy. Used as a medium of exchange for goods and
services, currency is the basis for trade "(Investopedia, 2017). This definition is closely related
to the definition of money as" an asset generally accepted as payment for goods and services or
for the settlement of (Cecchetti, 2008). Bitcoinin, is known as a currency despite being
decentralized but still can not be used as ordinary money. But to exchange money for goods or
services, they must be included in a payment system, which is a system that allows the transfer
of money between payers and payers through a mechanism based on paper money or electronic
payments. (Businessdictionnary, 2017). Electronic payments can be made in several forms:
credit card, debit card , electronic funds transfers which are part of bank money as well as e-
money which is the payment method for Bitcoin.

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2.2. Digital currencies, virtual, cryptocurrencies

Digital currency is a term that represents all non-physical currencies (a system that is not based
on paper money) that have the same characteristics as other physical currencies, but that allow
transactions and transfer of ownership immediately (Wikipedia, 2018). Digital currencies can
be divided into two categories: virtual currencies and cryptocurrencies. For the purposes of this
paper, the definition of the European Central Bank for virtual currencies will be used (2012):
"A virtual currency is a type of unregulated, digital money, which is usually issued and
controlled by its developers and used and accepted by members of a separate virtual community
". Cryptocurrency is a digital asset that also serves as a medium of exchange for conducting
cryptography-based transactions. These assets can be considered as an alternative to the
currencies of different countries. Most cryptocurrencies are basically a piece of software that
allows users to perform transactions between them according to a decentralized model.

2.3. Is Bitcoin money?

Bitcoin is commonly referred to as a cryptocurrency or as a virtual currency, or as money for
short, as perceived by its users and supporters. Blockchain technology has enabled bitcoin to
be introduced into the system with the transformative ability to decentralize the payment
process. But does this mean that digital currency will succeed in replacing traditional currencies
to serve as an alternative form of money? To answer this question, let us first discuss the three
functions of money: the exchange instrument, the measure of value, and the preservation of
value.

• An exchange tool is an instrument that buyers give to sellers when they buy goods and
services. For money to function as a medium of exchange, a government approval decree
requires Bitcoin to introduce some new aspects in terms of use as a means of payment for
goods and services. For the first time the concept of cryptocurrency appeared which does
not need a regulatory authority. The possibility of a new payment system was created that
avoids all intermediaries with the advantage of being faster, cheaper and more secure. But
despite these innovations, Bitcoin has not yet reached a level of widespread use for many
reasons, the most important of which is the non-acceptance as legal tender by Central Banks.
• Value measurment (ability to be used as a measure of the value of goods and services).
Value measure is a numerical monetary unit of measurement of the market value of goods
and services. In other words, it is something that can be used to announce prices and record
debts. Bitcoin still does not seem to have reached this milestone to have goods and services
that are measured in Bitcoin, as most items are priced only against the dollar or other
traditional currencies. The extreme volatility of this cryptocurrency still poses a barrier for
Bitcoin to be used as a measure of value.
• Value conservation is the ability to allow individuals to defer purchases of goods and
services to a future date. Manufacturers of goods and services sell their products by
converting them into money, which would later be used to buy goods and services from
others. But money can also be used as a store of value, as one of the forms of wealth. As
for Bitcoin whether it fulfills this function or not, we will test it.

3. METHODOLOGY AND EMPIRICAL APPROACH

The purpose of this paper is to examine the functions of Bitcoin as well as find a way to
determine whether or not it is money from an economic perspective. The chosen way to get an
answer is by testing one of the main functions of money, and precisely the function of
preserving value. Is Bitcoin a stable currency, which manages to maintain its value in the
future?

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3.1. Methodology
The study is based on measuring stability or volatility by applying the standard deviation of
daily logarithmic returns as well as monthly logarithmic returns expressed as a percentage. We
have calculated the daily returns by taking the prices of two consecutive days. That's why we
call it daily returns. Then, we apply a logarithm to the ratio between these two values which is
a common way to measure changes in the financial industry. This value tells us whether the
price of the currency has moved a lot or not from the previous day. While we have calculated
the monthly returns by first considering the average monthly price for the respective month
based on the prices of each day and then we act again the same as with the daily returns.
Standard deviation is a method used to determine the amount of variation of a set of data values.
A low standard deviation indicates that the data points tend to be close to the group average,
while a high standard deviation indicates that the data points are scattered over a wider range
of values. It explains the possibility that the value of a Bitcoin unit will remain stable over time.
Value stability is important for the functioning of foreign exchange because without having a
forecast for future value, users can not save money today for future purchases. We apply this
standard deviation to the daily logarithmic returns calculated over a period of time, respectively
for one year, and we have expressed the value in percentage. The standard deviation is
calculated using the following formula:

𝑛
1
𝑠=√ ∑(𝑥𝑖 − 𝑥̅ )
𝑛−1
𝑖=1

Where:
• s is the standard deviation,
• n is the number of units of choice
• 𝑥𝑖 are the values of the variable x (which in our case is the logarithmic daily / monthly
return of a unit (Bitcoin, Euro, Gold) from January 1 to December 31 of the respective year,
compared to one USD unit)
• 𝑥̅ is the arithmetic mean of the variable for the given year

The variables taken in the study are the daily price of a unit of Bitcoin, Euro and Gold compared
to a unit of USD for the period 2015 - 2018. This time period is justified as the period when
Bitcoin became more popular, having a larger number of users. To test the hypothesis we make
a comparison between the stability of Bitcoin with the stability of the euro currency as well as
gold. Gold has been selected, as it is considered an asset that represents the ideal money for all
those who do not like fiat coins. Fiat currencies is also included in the comparison as a real
competitor of virtual currencies. The Euro currency has been selected as an important
international currency. The base currency for comparison is the US dollar, which is considered
a global base currency. The statistical program SPSS Statistic Subscription was used to analyze
the data.

4. DATA ANALYSIS
In this section we will illustrate a descriptive analysis of the price of Bitcoin, for a period of
time 2015-2018, where for each year based on the daily price for each day of the year, through
the SPSS program we make an analysis, which includes the minimum, maximum , average and
standard price deviation as well as daily and monthly returns during the year under review.

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Table 1: Year 2015

Descriptive Analysis
N Minimum Maximum Mean Std. Deviation
Daily Return 365 -24.71% 17.16% 0.0812% 3.60852%
Daily Price𝑥𝑖 365 177.28 465.50 272.1783 59.35540

Monthly Return 12 -31.58% 27.44% 1.8380% 16.70295%

Average Monthly Price 12 233.497 424.523 271.779 57.995149

Figure 1: Bitcoin price in 2015 (USD / Bitcoin)

Source: Coindesk 2018

Table 2: Viti 2016

Analizë descriptive
N Minimum Maximum Mean Std. Deviation
Daily return 366 -18.05% 10.41% 0.2217% 2.53968%
Daily price𝑥𝑖 366 358.77 978.01 567.4683 138.82064

Monthly return 12 -13.36% 33.20% 5.5345% 11.17084%

Average monthly price 12 403.485 824.775 566.955 140.231

Figure 2: Price of Bitcoin 2016 (USD / Bitcoin)

Source: Coindesk 2018

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Table 3: Year 2017

Descriptive Analysis
N Minimum Maximum Mean Std. Deviation
Daily Return 365 -18.30% 22.64% 0.7291% 4.84596%
Daily Price𝑥𝑖 365 775.98 19343.04 3981.8808 3990.41383

Monthly Return 12 -4.79% 66.20% 24.2086% 21.14198%

Average Monthly Price 12 911.25 15065.27 3965.943 4057.003

Figure 3: Price of Bitcoin 2017 (USD / Bitcoin)

Source: Coindesk 2018

Table 4: Year 2018

Descriptive Analysis
N Minimum Maximum Mean Std. Deviation
Daily Return 243 -18.00% 13.17% -0.2803% 4.68157%
Daily Price𝑥𝑖 243 5848.26 17135.84 8560.7810 2235.99843

Monthly Return 8 -31.98% 5.08% -10.1700% 12.79429%

Average Monthly Price 8 6677.822 15065.278 9265.073 2891.761

Figure 4: Price of Bitcoin 2018 (USD / Bitcoin)

Source: Coindesk 2018

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From the presented results we see that Bitcoin is incredibly volatile not only from year to year,
but also from day to day. In the period under review, in the time frame of 4 years, we have an
incredibly high price variation, from 177.28 Bitcoin / $ in 2015, reaches a maximum of
19343.04 $ / Bitcoin in December 2017 and then falls again at an incredibly fast pace, proving
once again the extreme rising and falling values of this cryptocurrency. The highest volatility
has resulted in recent years, namely in 2017 and 2018, where the standard deviation reaches
very significant values up to $ 3990 / Bitcoin or 4.84596%, which means that the price per day
can fluctuate by $ 3990 from the average price over the year.

4.1. Results of comparing the volatility of Bitcoin with the currencies Euro and Gold
From the calculations we arrive at these results.

Table 5: Results
Standard Deviation %

Year 2015 Year 2016 Year 2017 Year 2018

Daily Monthly Daily Monthly Daily Monthly Daily Monthly
Return Return Return Return Return Return Return Return

Euro 0.75% 2.81% 0.51% 1.50% 0.45% 1.59% 0.46% 1.97%

Gold 0.88% 3.11% 1.01% 4.32% 0.68% 2.41% 0.54% 2.76%

Bitcoin 3.60% 16.70% 2.54% 11.17% 4.85% 21.14% 4.68% 12.79%

The price volatility of the Euro appears to be very low, with a standard deviation of 0.4-0.75%
maximum from day to day, which in absolute value translates into a change of 0.02-0.05 $ / €
and the maximum volatility is presented in the year 2015 in a change from the average value of
2.81% from month to month. Approximate values for peace and gold, where the standard
deviation for daily returns in the years under review has reached up to 0.88%. From the results
we can clearly see that Bitcoin is an incredibly volatile cryptocurrency compared to the
consolidated currencies taken in comparison. The daily volatility of Bitcoin is higher than the
monthly volatility of the Euro and Gold reaching approximately a standard deviation of 5% for
daily returns and 21% for monthly returns. With such volatility we can say that it fails to
perform the function as a store of value. Too high a change in price makes users unsure whether
they will get richer and richer or poorer using Bitcoin as money. As for the future, it is still
uncertain.

5. CONCLUSIONS AND RECOMMENDATIONS

The purpose of this paper was to answer the main question posed: whether Bitcoin, this
decentralized digital currency, can become a successful alternative to other currencies that are
currently consolidated in the market as well as regulated through legislation. Comparing the
characteristics of Bitcoin with the definitions used for money we conclude that although Bitcoin
is widely reported as money, it does not meet the criteria of the definitions used to be money.
Bitcoin cannot be used as an exchange tool because it has not yet reached a level of widespread
acceptance and use for many reasons. Bitcoin can not be considered as a measure of value,
because it still does not seem to have managed to have goods and services which are measured
with Bitcoin, as most items are priced only against the dollar or other traditional currencies.

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From the results of the analysis to test the function of Bitcoin as a store of value, it has been
proven that using Bitcoin is more risky than the cases when we use other types of assets due to
high volatility from day to day. But despite the volatility, Bitcoin already behaves similarly to
fiat currencies in China, the US, Japan and some European Union countries. If it follows a
downward trend in volatility, it can reach and become a functional alternative to fiat currencies,
at least in some countries. It remains the choice of everyone based on the risk they are willing
to take, to use Bitcoin as an alternative to money or not as long as this currency is not banned
in their state. What we can say is that, nowadays, since cryptocurrencies are still not perceived
as fiat currencies trust around Bitcoin has the biggest impact on its price and spread. It is
important to note that the more people believe in the success of Bitcoin and the more money
they are willing to invest in it, the more the value of this cryptocurrency grows.

LITERATURE:
1. Jack, W. S. (2014). "Risk Sharing and Transactions Costs": Evidence from Kenya’s Mobile
Money Revolution. American Economic Review 104, 183-223.
2. Adhami, S., Giudici, G., & Martinazzi, S. (2018, November–December). Why do
businesses go crypto? An empirical analysis of initial coin offerings. Journal of Economics
and Business, 100, 64–17. doi:10.1016/j.jeconbus.2018.04.001
3. Burak, A. (2021). "Fintech Payment Trends in 2021: Six Experts Weigh In". Payments
Journal.
4. Capo, G. (2021, January 3). "Ligji i ri do të nxisë modernizimin e pagesave". (R. B. Albania,
Interviewer)
5. Adrian, T. a.-G. (2019). "The Rise of Digital Money". Washington, DC: IMF Fintech Note
No. 19/01, International Monetary Fund
6. Federal Reserve Bank of Boston (2014), ` Bitcoin as Money?`, Current Policy Perspecive,
No. 14-4, Stephanie Lo and J. Christina Wang
7. Baur, D. G., Hong, K., & Lee, A. D. (2018). Bitcoin: Medium of exchange or speculative
assets? Journal of International Financial Markets, Institutions and Money, 54, 177–189.
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Finance, 50, 1 - 19.
9. Choi, H. (2021). Investor attention and bitcoin liquidity: Evidence from bitcoin tweets.
Finance Research Letters, 39, 101555.
10. Conlin, T., & McGee, R. (2020). Safe haven or risky hazard? Bitcoin during the Covid-19
bear market. Financial Research Letters, 35, 101607.
11. Dyhrberg, A. H. (2016). Hedging capabilities of bitcoin. Is it the virtual gold? Finance
Research Letters, 16, 139–144.
12. Faghih Mohammadi Jalali, M., & Heidari, H. (2020). Predicting changes in Bitcoin price
using grey system theory. Financial Innovation, 6(1).
13. Figa-Talamanca, G., Focardi, S., & Patacca, M. (2021). Common dynamic factors for
cryptocurrencies and multiple pair-trading statistical arbitrages. Decisions in Economics
and Finance.
14. Giudici, P., & Abu-Hashish, I. (2019). What determines bitcoin exchange prices? A
network VAR approach. Finance Research Letters, 28, 309–318.
15. Hazlett, P. K., & Luther, W. J. (2020). Is bitcoin money? And what that means. The
Quarterly Review of Economics and Finance, 77, 144–149.
16. Hudson, R., & Urquhart, A. (2021). Technical trading and cryptocurrencies. Annals of
Operations Research, 297(1-2), 191–220.
17. Kliestik, T., Valaskova, K., Lazaroiu, G., Kovacova, M., & Vrbka, J. (2020). Remaining
financially healthy and competitive: The role of financial predictors. Journal of
Competitiveness, 12(1), 74-92.

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18. Liu, X. F., Jiang, X., Liu, S., & Tse, CH. K. (2021). Knowledge Discovery in
Cryptocurrency knowledge discovery in cryptocurrency transactions: A survey. IEEE
Access, 9, 37229–37254.
19. Lopez-Cabarcos, M. A., Perez-Pico, A. M., Piñeiro-CHousa, J., & Sevic, A. (2021). Bitcoin
volatility, stock market and investor sentiment. Are they connected? Finance Research
Letters, 38, 101399.
20. Shen, D., Urquhart, A., & Wang, P. (2019). Does twitter predict Bitcoin? Economics
Letters, 174, 118–122.
21. Stix, H. (2021). Ownership and purchase intention of crypto-assets: Survey results.
Empirica, 48, 65–99.
22. Urquhart, A., & Zhang, H. (2019). Is Bitcoin a hedge or safe haven for currencies? An
intraday analysis. International Review of Financial Analysis, 63, 49–57.
23. Zhu, P., Zhang, X., Wu, Y., Zheng, H., Zhang, Y., & Trinidad Segovia, J. E. (2021).
Investor attention and cryptocurrency: Evidence from the Bitcoin market. PLoS ONE,
16(2), e0246331.

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HYDROGEN UTILISATION AS A KEY FACTOR FOR ACHIEVING

ENERGY SYSTEM DECARBONISATION
Dalibor Pudic
Croatian Energy Regulatory Agency, Croatia
dpudic@hera.hr

Eraldo Banovac
Croatia
eraldo.banovac@zg.t-com.hr

ABSTRACT
In addition to renewable energy sources, large-scale production and utilisation of hydrogen
are key prerequisites for the “green” energy system that should be implemented in the EU by
2050. The paper describes the role of hydrogen used as an energy carrier and presents different
types of hydrogen with respect to its origin. A review of the EU's regulation relevant for
decarbonisation and hydrogen utilisation is given in the paper. The Croatian Hydrogen
Strategy until 2050 adopted by the Croatian Parliament on 25 March 2022 is described.
Furthermore, the European Hydrogen Backbone, which is of crucial importance for future
hydrogen supply in Europe, is elaborated. A complete realisation of the EU's plan of an
intensive hydrogen utilisation, with the achieved cost-effectiveness of the renewable hydrogen
production, implies that the hydrogen network could become the most relevant gas network in
the future.
Keywords: Croatian Hydrogen Strategy, decarbonisation, hydrogen, hydrogen infrastructure,
natural gas, renewable energy sources

1. INTRODUCTION
The gradual heating of Earth's surface, oceans and atmosphere (global warming) is a
consequence of greenhouse gases (primarily carbon dioxide) predominantly emitted by human
activities. The European Union (EU) strives to act as a leader in achieving the goals of reducing
greenhouse gas emissions set by the Paris Agreement – a legally binding international treaty on
climate change (2015). The Paris Agreement was adopted by 196 parties in Paris on 12
December 2015. It includes commitments from all countries to reduce their emissions and work
together with the aim of limiting global warming well below 2 °C, preferably to 1.5 °C. The
Paris Agreement was reached because the stance that it is necessary to take decisive actions
against evident global warming and rapid climate change had finally prevailed (Banovac,
2018). Since the start of the Industrial Revolution, the emissions of carbon dioxide have risen
due to energy transformations, among other causes. Therefore, in the context of global energy
policy the goal of creating “green” energy system as a crucial component of the decarbonised
economy of the future is of utmost importance. According to Banovac et al. (2017), the future
global energy strategy should utilise resources in a reasonable manner in order to ensure the
long-term goals, which are of the interest for the whole society, rather than short-term economic
goals. Renewable energy sources and wide-scale hydrogen production & utilisation are crucial
for achieving the EU’s goal of becoming climate-neutral by 2050. Targeting the 2050 climate-
neutrality, on 8 July 2020 the European Commission adopted a document titled “A hydrogen
strategy for a climate-neutral Europe” (hereafter: The hydrogen strategy) presenting its vision
of hydrogen as a factor in the implementation of successful decarbonisation of various sectors
by 2050. Although The hydrogen strategy relates to a longer period, relatively fast actions are
envisioned: installing at least 6 GW of renewable hydrogen electrolysers in the EU by 2024 and
40 GW by 2030.

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Furthermore, on 19 May 2021 the European Parliament adopted the Resolution on a European
strategy for energy system integration, which focuses on the concept of an efficient integrated
system that connects energy sources and infrastructure necessary to support decarbonisation.
Both aforementioned documents are aimed at decarbonising the European energy system. Used
as a fuel, hydrogen burns completely clean, i.e. without harmful emissions. It is possible to store
it in large quantities for a longer period. Therefore, with the stored amounts of hydrogen
(energy) it is possible to handle seasonal fluctuations in demand. Hydrogen can be transported
by pipeline, lorry or ship. Furthermore, a diversified hydrogen production is possible in those
locations where it is the most efficient. The share of hydrogen in the EU's energy mix is
currently around 2% (95% of which is produced using fossil fuels) (A European Strategy for
Hydrogen, 2021). However, less than 1% of the produced hydrogen is used as an energy carrier.
This will change completely because renewable energy could account for up to 100% of the
EU's energy mix in 2050 (of which hydrogen could account for a share of up to 20% overall).
In fact, wide-scale hydrogen production and utilisation is the sine qua non for achieving a deep
decarbonisation of the EU's energy sector.

2. HYDROGEN CHARACTERISTICS
The use of renewable energy sources, hydrogen and biogas (as a neutral carbon footprint fuel)
is crucial for the decarbonisation of the energy system. It is estimated that, with enough
investment, hydrogen could abate up to 37% of energy-related greenhouse gas emissions
(Global Gas Report, 2020). Hydrogen is obtained in various ways and can be used:
• in its pure form (i.e., as pure hydrogen) – as it is the case with its recent global consumption,
which takes place mainly in the oil refineries and in the synthesis of ammonia in the
production of fertilizers,
• blended with natural gas (and biomethane) – which is an advantage since existing pipelines,
gas storage facilities and gas appliances can be used (note: some TSOs across the EU
Member States have already been experimenting with blending small amounts of green
hydrogen),
• via gaseous or liquid derivatives (synthetic methane, synthetic diesel, methanol, ammonia).

Hydrogen is 3.8x less dense than natural gas and travels faster through a pipeline than natural
gas (Stegher, 2021). It can be used as a raw material with numerous industrial applications, as
a fuel in industrial and chemical processes, maritime, air and heavy road transport as well as
for thermal applications and stored energy aimed to use for balancing the energy system.
However, the widespread use of hydrogen in the context of decarbonisation of the energy
system will not necessarily be easy. This means that in practice various restrictions (of a
technical nature or those resulting from regulations) may arise. It is possible to repurpose
existing gas pipelines for long-distance transport of renewable hydrogen, build a separate
system for renewable hydrogen or use hydrogen blended with natural gas (with the possibility
of different ratios in the mixture of hydrogen and natural gas). Nevertheless, a functional
hydrogen market and official categorisation of hydrogen types have yet to be established.
Therefore, a future EU’s hydrogen regulation should also prescribe harmonised terminology to
be used in all Member States, with definitions of all types of hydrogen and a harmonised use of
classification for low-carbon hydrogen and renewable hydrogen. Due to the lack of an official
categorisation, hydrogen is typically categorised according to its origin into grey hydrogen,
blue hydrogen and green hydrogen (Figure 1). Despite the different names and different
production methods, the chemical composition (H2) and properties of the derived hydrogen
remain the same. It should be accentuated that the colour coding used in the classification does
not reflect the actual colour (or other properties) of the product, only the production process
used to obtain the hydrogen.

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Notwithstanding the potential confusions that may arise from using a colour-coded
classification of hydrogen, it is still widely used in the hydrogen industry and by mass media
and will, therefore, be further elaborated.

Figure 1: Types of hydrogen marked based on the different methods of its production

Grey hydrogen is produced in one of the high-temperature technological processes using fossil
fuels, but the carbon dioxide emissions produced in the process are neither captured nor stored.
Blue hydrogen (common alternative name: low-carbon hydrogen) is derived from natural gas
through the process of steam methane reforming (SMR). The carbon dioxide emissions
produced in the process are captured and stored underground using the Carbon capture,
utilisation and storage technology (CCUS). Although blue hydrogen has been promoted as an
acceptable low-emission energy option, it was called into question by a recent study in which
the lifecycle greenhouse gas emissions of blue hydrogen accounting for emissions of both
carbon dioxide and unburned fugitive methane is examined (Howarth and Jacobson, 2021):
“Perhaps surprisingly, the greenhouse gas footprint of blue hydrogen is more than 20% greater
than burning natural gas or coal for heat and some 60% greater than burning diesel oil for heat,
again with our default assumptions“. This claim certainly implies the need for further research
on blue hydrogen. Green hydrogen is obtained by electrolysis of water using electricity
produced from renewable sources.

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This type of hydrogen is also called renewable hydrogen, which is carbon neutral because the
greenhouse gas emissions in the process are approximately equal to zero. Green hydrogen has
the biggest decarbonisation potential – it matches the EU's climate neutrality goal completely.
The colour coding used in the classification is more nuanced than mentioned previously (for
instance, brown hydrogen produced from coal is also used).

3. THE EU'S LEGISLATION RELATED TO DECARBONISATION AND

HYDROGEN UTILISATION
After December 2019 when the European Green Deal was presented, the European Commission
launched new significant initiatives, despite the COVID-19 crisis that has limited many
activities worldwide. To support a clear hydrogen production, on 8 July 2020 the European
Commission presented the aforementioned hydrogen strategy, in parallel with an EU strategy
for energy system integration. The EU strategy for energy system integration focuses on the
model of an integrated energy system that connects energy sources and infrastructure to support
decarbonisation, while ensuring clean energy for citizens, strengthening the competitiveness of
the European economy and creating new jobs. Furthermore, the European Parliament adopted
on 19 May 2021 the Resolution on a European Strategy for Hydrogen. Aiming for clean
hydrogen production, this Resolution emphasizes that the transition to a climate-neutral energy
system should be planned carefully, taking into consideration that existing starting points and
infrastructure differ across the Member States that should be flexible when designing support
measures including State aid measures. The aforementioned ‘clean hydrogen production’ refers
to hydrogen produced by electrolysis of water using “green” electricity (i.e. renewable
hydrogen) or to hydrogen produced by biogas reform or biochemical conversion of biomass
provided the process is carried out in accordance with the requirements regarding sustainability.
The EU strives to use clean alternative fuels opting for the gradual reduction of the use of fossil
fuels to zero and ensuring industry competitiveness. Renewable hydrogen has untapped
potential to be such an alternative. The renewable hydrogen sector is estimated to have the
potential to create 10,300 jobs for every billion euros invested (with additional jobs in the
renewables sector). Nevertheless, even within the concept of decarbonisation, the use of natural
gas with the application of CCUS technology, biogas and low-carbon hydrogen could be
acceptable in the transition period. The Resolution on a European Strategy for Hydrogen
emphasizes that there is a discrepancy between the different definitions of pure hydrogen used
by different actors and that the distinction between renewable hydrogen and low-carbon
hydrogen must be clear. In addition, the use of two names for the same category of hydrogen
("renewable" and "clean") should be avoided. In this regard, it is emphasized that the term
'renewable hydrogen' is a science-based option for that category of hydrogen. The European
Parliament believes that the classification of different forms of hydrogen should be determined
according to a science-based assessment (stepping away from the usual colour-coded approach)
and emphasizes the urgent need for standards and certification at the level of the EU as well as
at the global level. In the context of considering the characteristics of the future hydrogen
market, the question of the competitiveness of renewable hydrogen also arises. The Resolution
on a European Strategy for Hydrogen stresses that renewable hydrogen, which is crucial for
energy transition, could become competitive before 2030, "provided that the necessary
investments and an adequate regulatory framework are in place and renewable energy is
competitive”. The European Parliament urges the Commission to help those involved to pool
their know-how and investments. Furthermore, the importance of hydrogen valleys in different
regions across the EU and their important role in initiating the production and application of
renewable hydrogen was emphasized. Figure 2 shows the EU's regulation relevant to the
decarbonisation and hydrogen utilisation.

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Figure 2: The EU's regulation relevant to the decarbonisation and hydrogen utilisation

The EU aims for a significant use of renewable hydrogen, which also has a broader international
dimension. As a matter of fact, it is possible to diversify the supply and establish stable and
secure supply chains of hydrogen by the joint action of the EU and neighbouring
countries/regions. For instance, North Africa, which is close to Europe, could export cost-
competitive hydrogen to Europe due to its significant potential for green electricity generation.

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There is a growing interest in using renewable hydrogen. Therefore, various development

programs have been established in many countries. For instance, the US and China as countries
with leading economies invest significantly into research of future hydrogen use. In the EU,
several Member States (France, the Netherlands, Germany, Portugal and Spain) already have
national hydrogen strategies, and the other member states could have them soon (Asset Study,
2020). A cost-effective energy transition implies consideration of possibilities for repurposing
the existing gas infrastructure, with the construction of new hydrogen infrastructure. After
2030, it is possible that there will be a decline in natural gas demand at the level of the EU. This
factor could influence repurposing the existing gas infrastructure into the infrastructure
necessary for significant cross-border hydrogen transport. The EU will treat the hydrogen
infrastructure as a part of its infrastructure planning activities. These activities can also be
carried out in the frame of monitoring the implementation of the Ten-Year Network
Development Plans (TYNDPs) and the revision of the trans-European energy network. Finally,
the idea of creating a liquid hydrogen market, in which hydrogen would be traded as a
commodity, is imposed, with the possibility of easy entry of new entrants into such a market.
To achieve this, the hydrogen infrastructures, managed by the neutral network operators, should
be available to all without exception. In addition, it will be necessary to define a market model,
and to adopt the rules for connecting electrolysers to the network as well as the rules for third
party access (TPA). The gradual development of the hydrogen ecosystem in Europe is
envisioned, taking into account the existing differences in different sectors and regions. A
hydrogen strategy for a climate-neutral Europe describes three phases related to the
development of the hydrogen ecosystem in Europe (Table 1).

Phases Period Main related facts

At least 6 GW of renewable hydrogen electrolysers and the production of

up to 1 million tonnes of renewable hydrogen are planned in the EU with
First from 2020 up to
the purpose of decarbonisation of the existing hydrogen production. In the
phase 2024
first phase, manufacturing of electrolysers should be increased, including
large ones (up to 100 MW).

Hydrogen should become a factor in an integrated energy system. By 2030,

the EU should install at least 40 GW of renewable hydrogen electrolysers
and achieve the production of up to 10 million tonnes of renewable
hydrogen. It is assumed that during the second phase, renewable hydrogen
will gradually become cost-competitive with other forms of hydrogen
Second
from 2025 to 2030 production. Renewable hydrogen will play a role in balancing the electricity
phase
system based on renewable sources (converting electricity into hydrogen
where electricity from renewable sources is cheap and plentiful, and
providing flexibility to the system). Hydrogen will be used for both daily
and seasonal energy storage and will provide reserves and temporary
reserves, all with the impact on increasing security of supply.

From 2030 onwards and towards 2050, technologies for renewable

hydrogen production should reach maturity and start being applied widely
Third from 2030 onwards in sectors where alternatives to decarbonisation are not possible or are less
phase and towards 2050 cost-effective. A large increase in the production of renewable electricity is
planned in the long-lasting third phase. Approximately 25% of that energy
could be used to produce renewable hydrogen by 2050.

Table 1: Development of the hydrogen ecosystem in Europe

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To achieve a large-scale hydrogen utilisation and ensure that the entire hydrogen supply chain
meets the needs of the future European economy, more research will need to be carried out, and
many innovations will need to be applied. A comprehensive model of hydrogen utilisation does
not exist. Methodologies for assessing the impact of hydrogen technologies and their value
chains on the environment will need to be developed, and the corresponding lifecycle
greenhouse gas emissions will need to be analysed. A hydrogen strategy for a climate-neutral
Europe emphasizes that hydrogen is crucial for achieving the EU's carbon neutrality by 2050.
However, hydrogen has only a small share in the EU's energy mix nowadays. That is why it
should be used to a much greater extent in the near future. Since hydrogen is still mostly
produced from fossil fuels, decarbonisation of the existing hydrogen production should be
carried out.

4. CROATIAN HYDROGEN STRATEGY

The Energy Development Strategy of the Republic of Croatia until 2030 with a view to 2050
emphasizes that hydrogen should be considered as an important fuel of the future and that new
hydrogen production technologies will play an important role in achieving energy transition.

4.1. The Decision on initiating the procedure for drafting the Croatian Hydrogen Strategy
At the 45th session, held on 25 February 2021, the Government of the Republic of Croatia
adopted the Decision on initiating the procedure for drafting the Croatian Hydrogen Strategy
from 2021 to 2050 (hereafter: Decision). The Government of the Republic of Croatia adopted
the Decision based on Article 38 (3) of the Act on the System of Strategic Planning and
Development Management of the Republic of Croatia (Official Gazette, 123/17) and Article 6
(4) of the Regulation on guidelines for drafting strategic planning acts of national importance
and importance for local and regional self-government units (Official Gazette, 89/18). The
Decision instructs the Ministry of Economy and Sustainable Development to draft the Croatian
Hydrogen Strategy. In the Decision, the Government of the Republic of Croatia stipulates that
the Croatian Hydrogen Strategy will prescribe a national vision of the development, research,
production, infrastructure and use of hydrogen and the hydrogen economy, taking into account
the goal of climate neutrality from the European Green Deal as well as the national goals related
to the development of infrastructure for alternative fuels. Furthermore, the Decision states that
the goals of the Croatian Hydrogen Strategy are hydrogen production decarbonisation and the
use of hydrogen as a substitute for fossil fuels. According to the Decision, the Minister of
Economy and Sustainable Development should appoint an expert working group to draft the
Croatian Hydrogen Strategy, and the Ministry of Economy and Sustainable Development
should prepare a communication strategy and communication action plan for the strategic
planning act with the aim of an appropriate informing, communication, and visibility of the
policy planning process.

4.2. The Croatian Hydrogen Strategy until 2050

Obeying the aforementioned governmental decision, the Ministry of Economy and Sustainable
Development prepared the Draft Proposal of the Croatian Hydrogen Strategy, which was in
public discussion in February 2022. The Croatian Gas Association (further: CGA) gave
suggestions for a draft improvement on 23 February 2022 (Journal PLIN, vol. 22. No. 1, 2022).

The CGA advocates for a moderate and sustainable energy transition with a significant share
of hydrogen in the energy mix, assuming the Croatian Hydrogen Strategy should:
• be economically relevant and financially viable,

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• outline a stimulating framework for the development of hydrogen economy in the coming
years as well as to intensify the activities of potential stakeholders such as energy
companies, investors and project developers, including initiatives and innovations in the
segments of research, development and education.

Finally, on 25 March 2022 the Croatian Parliament adopted the Croatian Hydrogen Strategy
until 2050 (Official Gazette, 40/22), thereby classifying the Republic of Croatia in the group of
EU member states that have national hydrogen strategies. The strategy contains the following
main segments that determine the guidelines for the development of a hydrogen-based economy
in the Republic of Croatia: vision of the development of the hydrogen-based economy;
development potential and opportunities for hydrogen utilisation; strategic goals for the
development of hydrogen utilisation in the economy; implementation; implementation
monitoring, reporting and evaluation; financing; concluding remarks. Taking into consideration
the contents of the Croatian Hydrogen Strategy until 2050, it should be pointed out that this
strategy document is primarily oriented towards green hydrogen (i.e. renewable hydrogen).
Despite the fact that this document adequately describes the current situation and trends in a
global hydrogen economy as well as in the hydrogen production – transport – storage – usage
chain, the following important remarks should be pointed out:
• In addition to renewables and hydrogen, natural gas will play an important role in the energy
transition process. Hydrogen and natural gas (with the implementation of the CCS
technology intended for CO2 removal) should not be viewed as competitive, but as
complementary energy sources in the energy transition process. Hydrogen and natural gas
should be observed integrally because the first step will be hydrogen blended with natural
gas and then transporting this mixture through pipelines, with a future conversion of the
existing gas pipelines to transport hydrogen, and transforming gas companies into energy
companies, which will imply high costs. Therefore, it is realistic to expect that natural gas
and hydrogen will go “hand in hand" in the following years. Croatia belongs to a small
group of the EU’s member states that produce natural gas, which is a clear Croatian
comparative advantage. This fact should have been emphasized in the introductory part of
the Croatian Hydrogen Strategy.
• The safety of hydrogen use is also not emphasized enough in the document. The
flammability range of hydrogen (the range of concentrations in the air between the lower
and the upper flammability limits) is wider compared to other common fuels (methane,
propane, petrol). Since the issue of security is extremely important in all segments of the
hydrogen chain, it will be necessary to develop security regulations/standards at the EU
level, in which Croatia should actively participate and introduce them into the energy
system. Therefore, the document should have covered a chapter on planned activities related
to the safety issues of hydrogen use and the process of adopting the necessary regulations
and standards.

5. EUROPEAN HYDROGEN BACKBONE

Taking into consideration the importance of gas infrastructure for the European energy
transition, a group of eleven gas infrastructure companies (Enagás, Energinet, Fluxys Belgium,
Gasunie, GRTgaz, NET4GAS, OGE, ONTRAS, Snam, Swedegas and Teréga) published in
July 2020 a document titled ‘European Hydrogen Backbone’ (Wang et al., 2020). In this
document, the group proposed a plan for the development and construction of the hydrogen
transport infrastructure across Europe (hereafter: EHB) (Pavlović and Banovac, 2020). The plan
envisions connecting ten countries (Germany, France, Italy, Spain, the Netherlands, Belgium,
Czech Republic, Denmark, Sweden, Switzerland) by the hydrogen network. The purpose of the
EHB is to transport hydrogen produced using “green” electricity (from wind and solar power

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plants) and hydrogen imported from territories outside the EU. Realisation of a full hydrogen
potential will depend on the development of well-connected hydrogen markets in the future,
which is conditioned by a developed transport infrastructure (adequate capacities of newly built
hydrogen networks as well as significant capacities of existing gas networks repurposed for
hydrogen transport). In addition, the adoption of a comprehensive regulation for hydrogen is a
prerequisite for significant use of hydrogen and the establishment of an efficient hydrogen
market. According to the initial EHB plan, a mature EHB could be created by 2040, with
repurposed gas pipelines of significant capacity (commonly used for gas transport over longer
distances) as a backbone of the system. Furthermore, the initial document states that a dedicated
EHB (2040 layout) requires an estimated total investment of €27-64 billion based on using 75%
of repurposed natural gas pipelines connected by 25% new pipeline stretches. Considering that
retrofitted infrastructure represents only around 50% of the total investment, there is no doubt
about the value of using existing pipelines. The entire EHB project would be implemented
gradually. As early as 2030, the pipeline network could have a total length of 6,800 km,
connecting the hydrogen valleys (H2 valleys, abbreviated H2Vs) and would consist mainly of
the repurposed gas pipelines. It is planned that consumers from central Europe be connected
around 2035 to the regions with abundant potential for producing renewable hydrogen
(including the solar and wind power plants in the South of France as well as the offshore wind
farms in Denmark). Finally, a fully functional EHB with a total length of 22,900 km is planned
for 2040, with the possibility of further extending the system depending on developments in the
hydrogen market. It should be emphasized that the EHB concept is conceived as an open
initiative. Therefore, the initial group invited other gas infrastructure companies from Europe
and neighbouring regions to join the initiative. New members joined the initiative causing the
updated EHB that should connect 21 countries by 2040. Since the extended EHB plan of April
2021 (Wang et al., 2021) significantly increased the planned total length of hydrogen pipeline
infrastructure, the total investment costs required to build the EHB are higher. Creating the
EHB has an estimated investment cost of €43 to €81 billion (Gas for Climate / Priorities for the
EU hydrogen legislation, 2021). The expanded plan states that the EHB will contain 69% of the
repurposed existing gas infrastructure and 31% of the newly built, with a lower investment per
kilometer of pipeline planned than was the case in the initial EHB plan from July 2020. The
expanded plan envisions that most of the EHB’s infrastructure will consist of smaller pipelines
(24 or 36 inches), while the initial plan included only a cost estimate for 48-inch pipelines. The
conversion of smaller pipelines is cheaper, which reduces total investment costs. Furthermore,
the construction of the EHB is accelerated by the expanded plan in which it is planned that the
EHB, connecting the emerging hydrogen valleys, will have a total length of 11,600 km by 2030,
which is significantly more than in the initial plan (6,800 km).

6. NECESSARY INVESTMENTS
Among the Group of Twenty (G20) and the European Union, 11 countries have policies that
support investment in hydrogen technologies in place and 9 countries have national roadmaps
for hydrogen energy (IEA Report: The Future of Hydrogen, 2019). Large investments are
needed to ensure sectoral adaptation to the intensive use of hydrogen. Cumulative investments
in hydrogen would amount to €180-470 billion in the EU by 2050 (A hydrogen strategy for a
climate-neutral Europe, 2020). Up to 2030, investments in electrolysers could range between
€24 and €42 billion. Investments of €65 billion will be needed for hydrogen transport,
distribution and storage, and hydrogen refuelling stations. The EU’s programmes and financing
instruments, such as the Recovery and Resilience Facility, Horizon Europe, the Connecting
Europe Facility, InvestEU, including the new strategic EU investment window, the European
Regional Development Fund, the Cohesion Fund, the Just Transition Fund and the ETS
Innovation Fund can foster the cohesive development of a hydrogen economy across the EU

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signifiable. Public-private partnerships (local and regional) also have an important role in that
sense. A more detailed explanation of the EU’s programmes and financing instruments is
interesting but is outside the scope of this paper. Realistically, with the EU's declared support
for investment in the "hydrogen economy", the dynamics and realized level of investment will
also depend on the real costs of hydrogen production. The cost of renewable and low-carbon
hydrogen is 2.5 to 5.5 €/kg, and the cost of producing hydrogen from fossil fuels is about 1.5
€/kg, “whereas the current electricity mix in most Member States would produce electricity-
based hydrogen with higher emissions than fossil-based hydrogen“ (A European Strategy for
Hydrogen, 2021). Furthermore, the BNP Paribas study (2020) shows that renewable hydrogen
could become competitive with natural gas by 2040, with an assumed gas price of 15 €/MWh
and at the EUA price of 100 €/t (European Union Allowance – EUA means the tradable unit
under the European Union Emissions Trading Scheme – EU ETS). The study considered
scenarios for gas prices of 10 €/MWh and 15 €/MWh because it was assumed that the
decarbonisation of the EU's energy system would cause a decrease in gas demand, so a price of
20 €/MWh seems unlikely.

7. CONCLUSION
Following the agenda of the Paris Agreement, the EU aims to be 'climate-neutral' by 2050. By
adopting several strategic documents in the last few years, the EU gave an impetus to achieving
a climate-neutrality across Europe as well. Within such a concept, in addition to renewable
energy sources, innovations and expecting development and use of new technologies, hydrogen
represents the energy of the future that can make a significant contribution to decarbonisation.
As a matter of fact, a deep decarbonisation of the energy system is not possible without a large-
scale hydrogen usage. With the implementation of hydrogen investment plans related to the
construction of hydrogen pipeline networks that will connect demand and supply in a cost-
effective way, with taking into consideration the trade on the hydrogen market and hydrogen
import, the creation of a comprehensive EU hydrogen regulation is a prerequisite for successful
development of a future European hydrogen infrastructure and a liquid pan-European hydrogen
market. Taking the aforementioned into account, it is possible that fossil fuels will not be a part
of the EU’s energy mix in the not-too-distant future. However, in a certain (transitional) period,
natural gas will continue to be used in Europe as the fossil fuel with the lowest CO2 emissions.
This will likely be the case until 2050, with the assumption that natural gas could be of great
importance in the context of security of supply by 2040. This will also be affected by the fact
that hydrogen blended with natural gas can reduce emissions of gases that affect global warming
and cause climate change. Hydrogen, biogas, and natural gas with the implementation of CCUS
technology could play a significant role during the transformation process of the global energy
system with the aim of its decarbonisation.

LITERATURE:
1. Banovac, E. (2018): Prirodni plin – bitan energent 21. stoljeća, Plin, Vol. 18, No 4, pp. 4-
8.
2. Banovac, E., Stojkov, M., Kozak, D. (2017): Designing a Global Energy Policy Model,
Proceedings of the ICE - Energy, 170(EN1), pp. 2-11.
3. Howarth, R.W., Jacobson, M.Z. (2021): How Green is Blue Hydrogen? Energy Sci Eng.,
pp. 1-12. DOI: 10.1002/ese3.956
4. Hrvatska strategija za vodik do 2050. godine, „Narodne novine”, br. 40/22.
5. Komentari HSUP-a o Nacrtu Prijedloga Hrvatske strategije za vodik od 2021. do 2050.
godine, 23. 02. 2022. Plin, vol. 22, br. 1, ožujak 2022.

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 83rd International Scientific Conference on Economic and Social Development - "Green Marketing" – Varazdin, 2-3 June, 2022

6. Pavlović, D., Banovac, E. (2020): Natural Gas as a Geopolitical Factor of Energy

Transition, in: 35th International Scientific & Expert Meeting of Gas Profesionals,
Proceedings, October 21-23, 2020, Virtual Meeting, pp. 1-12.
7. Stegher, A. (2021): Future of Gas and Gas Infrastructures in the EU: A Focus on Low-
carbon Gases, in: 36th International Scientific & Expert Meeting of Gas Professionals,
Proceedings, June 16-18, 2021, Opatija, Croatia.
8. A European Strategy for Energy System Integration. European Parliament resolution of 19
May 2021 on a European strategy for energy system integration (2020/2241(INI)).
P9_TA(2021)0240.
9. A European Strategy for Hydrogen. European Parliament resolution of 19 May 2021 on a
European Strategy for Hydrogen (2020/2242(INI)). P9_TA(2021)0241.
10. A hydrogen strategy for a climate-neutral Europe. Communication from the Commission
to the European Parliament, the Council, the European Economic and Social Committee
and the Committee of the Regions, COM/2020/301 final. European Commission, Brussels,
8.7.2020.
11. An EU Strategy for Energy System Integration. Communication from the Commission to
the European Parliament, the Council, the European Economic and Social Committee and
the Committee of the Regions, COM(2020) 299 final. European Commission, Brussels,
8.7.2020.
12. Asset Study (2020). Hydrogen generation in Europe: Overview of costs and key benefits.
Publications Office of the European Union, July 2020.
13. BloombergNEF, International Gas Union, SNAM. Global Gas Report 2020.
14. Deep Decarbonisation: Green Hydrogen, Net Zero and the Future of the EU-ETS. Mark
Lewis, BNP Paribas Asset Management, October 2020.
15. European Hydrogen Backbone: How a dedicated hydrogen infrastructure can be created.
Authors: A. Wang, K. van der Leun, D. Peters, M. Buseman. July 2020.
16. Extending the European Hydrogen Backbone: A European hydrogen infrastructure vision
covering 21 countries. Authors: A. Wang, K. van der Leun, D. Peters, M. Buseman. April
2021.
17. Gas for Climate / Priorities for the EU hydrogen legislation. June 2021.
18. Odluka o pokretanju postupka izrade Hrvatske strategije za vodik od 2021. do 2050. godine.
Vlada Republike Hrvatske, 45. sjednica, 25. veljače 2021.
19. Paris Agreement, United Nations, 2015.
20. Strategija energetskog razvoja Republike Hrvatske do 2030. s pogledom na 2050. godinu,
„Narodne novine”, br. 25/20.
21. The European Green Deal. Communication from the Commission, COM(2019) 640 final.
European Commission, Brussels, 11.12.2019.
22. The Future of Hydrogen. Report prepared by the IEA for the G20, Japan. International
Energy Agency (IEA). June 2019.

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EVIDENCE ON PRE-PANDEMIC OUTBOUND TOURISM DEMAND

DETERMINANTS IN OECD COUNTRIES
Blanka Simundic
University of Split, Faculty of Economics, Business and Tourism
Cvite Fiskovića 5, Split, 21000, Croatia
blans@efst.hr

ABSTRACT
This paper examines how origin country socio-economic factors determine outbound tourism
demand. The analysis is performed within a panel of 32 Organisation for Economic Co-
operation and Development (OECD) countries throughout the 2010–2019 period. The dynamic
panel data estimation technique is employed. Besides the income and price as mostly present
pull factors of outbound tourism demand in empirical research, this paper analyses the effects
of former outbound tourism demand and the socio-economic uncertainty on outbound tourism
demand. The international departures and expenditures proved to be positively affected by the
net income level, while the loss in international competitiveness has negative effects on the
number of departures, while, consequently, expenditures are rising. A particular implication of
the results would be that regardless the rise in the economic uncertainty in the origin country,
its tourism departure levels show growth persistence, while the expenditure levels drop. This
shows that the influence of previous tourism experience is higher than the influence of negative
expectations in the economy. This could be of unambiguous importance for origin country’s
policy makers and domestic tourism development as well as for destinations that seek new
tourism source markets.
Keywords: tourism demand, expectations, net national income, price competiveness, propensity
to travel

1. INTRODUCTION
The effect of COVID-19 pandemic highlighted the weight of tourism in the global economy
and proved its established important role in driving global, national and local socio-economic
development through its contribution to employment, infrastructure development, and export
revenues (Peeters et al., 2018). In 2020, almost 90 percent of worldwide countries exhibited
sharp contraction in economic activity and the world economy shrank by about 3 percent (WB,
2022) in comparison to 2019, while the imposed restrictions on international mobility incited
the drop in the number of international tourists by 73%, the worst year-drop ever on record for
tourism (UNWTO, 2022a). As a result, according to WTTC (2022), the tourism sector
underwent losses of almost USD 4.8 trillion, with its global contribution to GDP declining by
50.4% compared to 2019 to reach only USD 4.7 trillion in 2020, which is relative to a 3.3%
GDP decline of the global economy. In 2020, 62 million jobs in tourism sector were lost,
leaving just 272 million employed across the tourism sector globally. Although the short-term
outlook for global tourism economy is mixed due to an uncertainty regarding the economic and
other shockwaves in 2020s, over the long-term period the sector is predicted to continue its pre-
pandemic growth path in all tourist regions (OECD, 2020). This is reasonable to expect since
tourism is prone to be more vulnerable in comparison to other economic activities during the
periods of external tremors, while after the crisis it is prone to recover faster. This was
particularly evidenced during the global financial crisis in 2008 and 2009, when international
tourism arrivals and receipts decreased relatively more in comparison to global GDP decrease
in 2009 but rebounded quicker, already in 2010 (UNWTO, 2011). Consequently, tourism
practitioners and experts hold a positive attitude towards the tourism industries' recovery after
COVID-19 pandemic (Zhong, Sun, Law & Li, 2022).

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This is supported by the growth trends in international tourism demand already in the 2021 and
2022. The data on international tourist arrivals show that global tourism has experienced a mild
4% upturn in 2021, with 15 million more international tourist arrivals than in 2020 but remained
72% below the levels of the pre-pandemic year 2019 (UNWTO, 2022a). Based on the latest
available data provided by UNWTO (2022b), the global international tourist arrivals more than
doubled (+130%) in January 2022 compared to 2021. This evidence on international tourism
recovery trends shows that international tourism demand recovers quickly after the crisis.
Pascariu, Ibănescu, Nijkamp & Kourtit (2021) identified tourism activities as very sensitive to
the onset of economic or other types of crisis, while Celini and Cuccia (2015) proved that the
tourism industries' after-shock recovery level is higher in comparison to the most of traditional
economic sectors (agriculture, industry, or commerce). According to OECD (2020) significant
socio-economic, political, environmental and technological trends remain to affect the tourism
sector. In order to predict and discuss the recovery levels of international tourism demand the
notion of its determinants is important. According to Seo, Park and Boo (2010) outbound
tourism demand represents potential inbound tourism demand in other countries. The tourism
demand literature is biased towards studies that analyse inbound tourism demand while
neglecting outbound tourism, mostly due to the economic benefits added from inbound tourism
receipts as against the capital leakage that is incurred from outbound tourism (Balcilar,
Aghazadeh & Ike, 2021). However, the push drivers of tourism demand define international
tourisms’ recovery and growth abilities since they are the essential factors in the first stage of
tourism-decision process (Candela & Figini, 2012). This is the stage when the budgeting of the
personal income and decision about international travel within the population of origin country
is conducted. Hence, when tourism demand’s first stage of decision process is concerned push
factors in the origin country are prior to pull factors in a destination. According to OECD (2020)
forward-looking public policies are needed to shape the development of sustainable and
competitive tourism destinations. This is imperative since tourism sector plays important role
in the global economic growth and development (Balcilar et al., 2014; Eugenio-Martín, Morales
& Scarpa, 2004; Roudi, Arasli & Akadiri, 2019; Sequeira & Nunes, 2011). Having this in mind,
the aim of this paper is to discuss and analyse the socio-economic determinants of outbound
tourism demand in OECD countries, the largest global source market of outbound tourism.
Resulting from the previously presented issues this paper adds value to the existing empirical
literature in several ways. Firstly, by introducing the element of expectations and forgoing level
of outbound tourism as push factors of international tourism, the paper investigates the broader
effects of socio-economic outbound tourism demand determinants, in addition to commonly
used income and prices in the empirical literature. Secondly, by analysing the effects of
population’s propensity to travel and economic certainty in the environment on tourism
demand, the paper provides new insights about the push factors of outbound tourism for OECD
countries. Thirdly, regarding the mixed results on the influence of prices and expectations on
tourism, this model expanded the analysis by implementing two different outbound tourism
demand indicators (number of departures and international tourism expenditures) to embrace
the socio-economic scope of origin market and capture the relevant effects of those push factors.
Additionally, by employing the panel data analysis a vibrant and more in depth picture of the
relationships between the variables is interpreted, especially as they move through time. The
reminder of the paper is organized as follows. The short literature review is presented in the
second chapter while the third chapter elaborates the sample size, data and the research model.
The fourth chapter offers the discussion on the results of the empirical research, while the fifth
chapter concludes the research and provides policy and further research implications.

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2. LITERATURE REVIEW
Newly, there have been many studies on the topics of tourism development, tourism demand,
and tourism-led growth hypothesis, which is due to the increasing significance of tourism as an
essential source of revenues and foreign exchange earnings (Balcilar, Aghazadeh & Ike, 2021).
International tourism involves outbound and inbound tourism demand. Their evolution since
the 1960s led to a broad literature body on diverse aspects of tourism demand drivers, mostly
related to the tourist origin country, tourist visiting country, and distance and modes of travel
from the origin country to the destination (Lim, 1997; Ahmed, 2015). International tourism
demand is a complex area of research itself. Concisely, for a certain country, it can be defined
as the sum of goods and services that satisfy tourist needs and comprise of outbound and
inbound tourism demand (Šimundić, 2017). International tourism demand is influenced by
numerous elements which are, based on a comprehensive literature review, commonly divided
into the pull and push factors (Pivčević, Kuliš & Šerić, 2016). In the field of tourism demand,
there has been plenty of empirical research about its determinants. For example, Ahmed (2015)
offered an analysis that included 400 empirical research papers on tourism demand in the period
1960-2014. Šimundić (2015, 2017) introduced the novelty regarding the empirical investigation
of tourism demand determinant based only on one group of factors, i.e. push factors in origin
country. Kuliš (2015) and Pivčević, Kuliš and Šerić (2016) followed Šimundić (2015, 2017)
and empirically analysed the pull factors of tourism demand in the receptive region. However,
in tourism demand literature, as noticed by Balcilar, Aghazadeh and Ike (2021), there is a
favorable bias for research in analysing inbound tourism demand while a better understanding
of the determinants of outbound tourism is neglected. Similar conclusion is derived from Rudež,
Paliska and Sedmak (2022), who stated that studies on outbound tourism demand are not rapidly
developing as is the case with research on inbound tourism demand. The empirical studies that
analyze the determinants of outbound and inbound tourism demand, known as push and pull
factors, respectively, are found to be important in order to create a vibrant destination
development strategy based on the recognized drivers of outbound and inbound tourism
demand. In addition, it is of high importance to identify the pull factors of tourism demand at
the panel level with the purpose of policy formulation at the macroeconomic level (Balcilar,
Aghazadeh & Ike, 2021). Rosselló-Nadal and He (2020) state that in accordance with the
tourism economics theory, the most included explanatory variables of outbound tourism
demand in empirical studies have been income and prices. Erjavec and Devčić (2022) state that
the most critical push determinants of tourism demand are: the tourists' income, prices, and
exchange rates. Besides them, they see the accommodation capacity of the receptive region and
trade openness as very important explanatory variables of tourism demand. Dogru, Bulut and
Sirakaya-Turk (2021) noticed that many papers investigated the effects of climate change,
terrorism, immigration, trade policies, tariffs, and visa requirements affecting tourism demand.
Below are some examples of recent research about determinants of outbound tourism demand.
Šimundić (2017) performed a panel analysis for 25 European countries for the period 2002-
2015. Her results showed that the reached level of economic development, word of mouth, and
erstwhile tourism activities positively affect the present outbound tourism in origin market. In
contrast, there is a negative effect if the rise in the household saving rate occured a year earlier,
as well as the negative effects of the fall in origin market competitiveness on outbound tourism.
Gržinić, Šergo and Floričić (2017) investigated the wealth factors that affect outbound tourism
intensity in Europe, on the panel data level, for 31 countries, during 1995-2014. They concluded
that income, saving, stock trading, real effective exchange rate, fuel price, and recession dummy
variable are Euroepan outbound tourism's explanatory variables. More recently, Rudež, Paliska
and Sedmak (2022) conducted panel data models during 17 year period for 35 OECD country.
Their results showed that income in the country of origin, the real effective exchange rate, trade
openness, tourism export per tourist arrival, the country's political stability, the persistence of

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habits, and two dummy variables are all statistically significant outbound tourism demand
determinants. Balcilar, Aghazadeh and Ike (2021) also examined push determinants within a
panel of 32 OECD countries from 1995 to 2016. They found the existence of a long-run
relationship between international tourism expenditure per adult, gross domestic product per
adult, effective exchange rates adjusted relative prices, and employment to adult population
ratio. In contrast, employment failed to be a significant determinant of long-run emitive tourism
demand in OECD countries.

3. SAMPLE, DATA, AND MODEL SPECIFICATION

The stimulus for studying the outbound determinants of tourism demand in OECD countries
lies in the importance of OECD countries in the global tourism market. According to OECD
(2020), its member countries play a prominent role in the international tourism economy,
accounting for more than half (56.9%) of total global arrivals, global travel receipts (61.1%),
and global travel expenditures (50.5%) in 2018. The list of 38 OECD member countries for
which data were collected is shown in Table 1.

No Country Name No Country Name No Country Name No Country Name

1 Australia 11 Finland 21 Korea, Rep. 30 Portugal
2 Austria 12 France 22 Latvia 31 Slovak Republic
3 Belgium 13 Germany 23 Lithuania 32 Slovenia
4 Canada 14 Greece 24 Luxembourg 33 Spain
5 Chile 15 Hungary 25 Mexico 34 Sweden
6 Colombia 16 Iceland 26 Netherlands 35 Switzerland
7 Costa Rica 17 Ireland 27 New Zealand 36 Turkey
8 Czech Republic 18 Israel 28 Norway 37 United Kingdom
9 Denmark 19 Italy 29 Poland 38 United States
10 Estonia 20 Japan - - - -
Table 1: List of countries included in the sample

The dependent variable in this paper is outbound tourism demand. In tourism literature, the
most commonly used indicators to measure tourism demand are tourist arrivals (from an
inbound perspective) or departures (from an outbound perspective), tourist overnights and
tourist receipts (both inbound perspective) or expenditures (outbound perspective), and the
length of stay (Song, Li, Witt & Fei, 2010; Ahmed, 2015; Rudež, 2018). In this paper, outbound
tourism demand is measured from two perspectives: the quantity (number of departures) and
the value (expenditures) perspective, as suggested by Martins, Gan and Ferreira-Lopes (2017).
Finally, the aggregate number of tourism departures and expenditures are estimated relative to
the domestic populations to get per capita indicators, commonly used as measures of tourism
demand in empirical research (Song et al., 2010). Thus, two different indicators to capture
outbound tourism demand used in this paper are tourist expenditures per capita and tourist
departures per capita. The leading independent variables that affect outbound tourism demand
are income, exchange rate, and savings (Šimundić, 2017). The income in the country of origin
is considered among the most important explanatory variables of tourism demand (Dogru, Bulut
& Sirakaya-Turk, 2021; Rudež, Paliska & Sedmak, 2022). Its impact on international tourism
demand is expected to be positive (Erjavec & Devčić, 2022). Balcilar, Aghazadeh and Ike
(2021) pointed out that income in the literature on outbound tourism demand has mostly been
measured by GDP, GDP per capita or average wages. However, following the novelty proposed
by Šimundić (2017), in this study, instead of GDP, the variable used is net national income
(NNI).

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It is proxied by adjusted net national income per capita in current US$. Šimundić (2017)
highlights the argumentation offered by Song, Witt and Li (2008) which states that if the
purpose of analysis of international tourism demand determinants is to model motivational
factors for any type of tourism, net national income is better measure than GDP. Accordingly,
GDP would be measure that is more appropriate if only business trips determinants are
analyzed. This paper considers all types of tourism, thus net national income is used as proxy
for the income level in the origin country. To capture the size of an origin country it is expressed
in per capita values (see Šimundić (2017) for details). Another critical determinant of outbound
tourism demand is the exchange rate, which measures an origin country's price
competitiveness, as suggested by Song, Witt and Li (2009). Ahmed (2015) explains how
changes in the currency exchange rates can considerably impact country’s tourist outflow, as
well as visitors inflows. This study uses the real effective exchange rate (REER) as a proxy
variable for price competitiveness. It represents a nominal effective exchange rate index
adjusted for relative movements in national price or cost indicators of the home country,
selected countries, and the euro area (WDI, 2022). In addition, Papatheodorou (2010) noticed
that papers about international tourism demand often neglected future economic activity
expectations. To solve this issue, Šimundić (2017) suggests employing household saving rate
(HSR) as a proxy variable, indicated by the percentage of household net disposable income of
an origin country. According to Bouis (2021) the rise in the household saving rates essentially
reflects higher precautionary saving in an environment of heightened economic uncertainty,
higher unemployment, and depressed valuations of real and financial assets, thus at the end
reflecting negatively to the overall consumption level. A similar observation is offered by
Rudež (2018), who points out Wang's (2014) conclusion, that savings and savings regimes
significantly impact tourism consumption. While the positive effect of NNI on outbound
tourism demand is undoubtedly expected, the effects of HSR and REER are ambiguous and not
well-defined in the tourism demand empirical research and theory. If HSR rises this is the mirror
to negative expectations in an economy but the effect on OTD can be negative or positive
(Šimundić, 2017). Hence, the drop in the OTD when HSR rises could enlighten the luxury
nature of tourism product for the countries included in the analysis, while the positive effect on
OTD would prove that tourism is necessarily good and that once the person “becomes tourist”
stays always a tourist. In addition, REER shows international (trade) competitiveness and its
rise means the fall of the competitiveness for origin country and the drop in OTD (Šimundić,
2017). Nevertheless, the loss of the competitiveness can make tourists to stay homebased or
even go out of the country, depending if the negative effect of the fall of origin country
currency’s value is outpaced by inelasticity of OTD on the change of prices in the origin country
(see Song, Witt, Li, 2009). Thus, the expected sign is not clear for this variable as well. In
addition, it is expected that the effects of lagged dependent demand are positive, thus
confirming the positive impacts of the previous tourism experience on OTD level. Annual data
for all variables except HSR were obtained from the World Bank's World Development
Indicators database (WDI, 2022). The data for HSR was collected from National Accounts of
OECD Countries (OECD, 2022). The period covered includes 11 years, from 2009, when the
global economic crisis considerably impacted international tourism and caused the decline of
international tourism demand, until 2019, which after a rebound in 2010, was the 10th
consecutive year of sustained growth in international tourism (UNWTO, 2013, 2021). Table 2
summarizes all the variables, their labels, defined proxy variables, expected signs, and
corresponding data sources.

Table following on the next page

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Expected
Variable Label Indicator Source
sign
Outbound tourism International tourism, expenditures (current US$)
OTDexp WDI
demand, expenditure divided by the total population
International tourism, number of departures
Outbound tourism
OTDdep divided by the total population and then WDI
demand, departures
multiplied with 1,000,000
Adjusted net national income per capita (current
Net national income NNI + WDI
US$)
Household saving Net household saving, percentage of households
HSR +/- OECD
rate net disposable income
Real effective
REER Real effective exchange rate index (2010 = 100) +/- WDI
exchange rate
Table 2: List of countries included in the sample

The models are defined as follows:

𝑂𝑇𝐷𝑒𝑥𝑝𝑖𝑡 = 𝜇 + 𝛾𝑂𝑇𝐷𝑒𝑥𝑝𝑖,𝑡−1 + 𝛽1 𝑁𝑁𝐼𝑖𝑡 + 𝛽2 𝐻𝑆𝑅𝑖𝑡 + 𝛽3 𝑅𝐸𝐸𝑅𝑖𝑡 + 𝛽4 𝑂𝑃𝐸𝑁𝑖𝑡 + 𝛽5 𝐻𝐶𝑖𝑡

+ 𝛼𝑖 + 𝜀𝑖𝑡

𝑖 = 1, 2, 3 … 37, 38; 𝑡 = 2009, 2010, … 2018, 2019 (1)

𝑂𝑇𝐷𝑑𝑒𝑝𝑖𝑡 = 𝜇 + 𝛾𝑂𝑇𝐷𝑑𝑒𝑝𝑖,𝑡−1 + 𝛽1 𝑁𝑁𝐼𝑖𝑡 + 𝛽2 𝐻𝑆𝑅𝑖𝑡 + 𝛽3 𝑅𝐸𝐸𝑅𝑖𝑡 + 𝛽4 𝑂𝑃𝐸𝑁𝑖𝑡 + 𝛽5 𝐻𝐶𝑖𝑡

+ 𝛼𝑖 + 𝜀𝑖𝑡

𝑖 = 1, 2, 3 … 37, 38; 𝑡 = 2009, 2010, … 2018, 2019 (2)

where i=1, 2…, N counts for each country in the panel and t=1, 2…, T refers to the time period.
Moreover, µ denotes for an intercept, γ is a parameter of lagged dependent variable and β1, β2,
β3, β4, β5 are the parameters of exogenous variables. It is assumed that εit are IID (0,σ2ε ). αi
represents unobservable individual-specific effect that is time invariant and it accounts for any
individuals. Descriptive statistics of the data is presented in Table 3.

Variable Mean Std. dev. Min Max N n T/T-bar

OTDexp 1026.322 1170.379 61.4191 7471.829 325 33 9.84848
OTDdep 1022.994 746.414 47.41894 4128.629 407 38 10.7105
NNI 29561.64 16965.09 4209.642 80639.39 415 38 10.9211
HSR 5.110117 5.649383 -17.2452 18.79845 379 35 10.8286
REER 98.85456 10.09506 69.41596 152.969 374 34 11
Table 3: Descriptive statistics
(Source: author's calculations using the data of WDI (2022) and OECD (2022))

4. METHODOLOGY, RESULTS, AND DISCUSSION

As Muštra, Šimundić and Kuliš (2017) explain, it is essential to confirm that there is no problem
of multicollinearity among independent variables prior to model estimation. Therefore, a
correlation matrix is computed because there is no specific test for multicollinearity in panels
(Škrabić Perić, Rimac Smiljanić & Kežić, 2022). As the highest correlation coefficient among
independent variables (NNI, HSR, REER) does not exceed the value of 0.5, it can be concluded
that there is no possible problem of multicollinearity in subsequent model specifications
(Baltagi, 2008).

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Variable OTDexp OTDdep NNI HSR REER

OTDexp 1.000
OTDdep 0.6817* 1.000
NNI 0.4914* 0.7692* 1.000
HSR 0.1656* 0.1965* 0.3179* 1.000
REER 0.0385 0.0589 0.1656* 0.0833 1.000
Table 4: Correlation matrix
(Source: author's calculations using the data of WDI (2022) and OECD (2022))

In this paper, the panel methodology is used to perform empirical research. According to Dogru,
Bulut and Sirakaya-Turk (2021), panel data analysis has been the most predominant empirical
technique employed in modeling tourism demand. Due to the combination of pooled-cross-
sectional data and time-series data of the same units under examination, panel data provides the
opportunity to capture information that could not be otherwise captured while having added
benefits of the reduction of multicollinearity and increase in degrees of freedom (Wooldbridge,
2010, as cited in Dogru, Bulut and Sirakaya-Turk, 2021). Škrabić Perić, Šimundić, Muštra &
Vugdelija (2021) perceived that in latest empirical papers, differenced generalized method of
moments (GMM) (Arellano & Bond, 1991), and system GMM (Blundell & Bond, 1998) are
most commonly performed. Škrabić Perić (2019) reasoned that the system GMM showed
superior properties in simulation studies. So, using statistical software Stata 17.0, in this paper
the model of determinants of outbound tourism demand is computed using a two-step Blundell
and Bond GMM estimator, and the results are presented in the following tables. First, in Table
5, the results of the model of outbound tourism demand where OTDexp (expenditures) is a
proxy dependent variable are presented.

Variable Model 1a Model 2a Model 3a Model 4a

L.OTDexp 0.789*** 0.785*** 0.802*** 0.796***
(0.00362) (0.00381) (0.00374) (0.00441)

NNI 0.0171*** 0.0183*** 0.0162*** 0.0176***

(0.000545) (0.000571) (0.000637) (0.000613)

HSR -8.845*** -11.55***

(1.109) (1.077)

REER 3.502*** 3.163***

(0.605) (0.522)

_cons -267.3*** -252.3*** -613.5*** -556.0***

(20.54) (26.84) (56.99) (59.36)
Number of observations 292 268 266 252
Number of groups 33 31 30 29
Number of instruments 20 21 21 22
Sargan test (p-value) 0.1397 0.2709 0.1501 0.1599
AB2 test (p-value) 0.2502 0.2527 0.2497 0.2532
Standard errors in parentheses, * p < 0.1, ** p < 0.05, *** p < 0.01
Table 5: Empirical results of outbound tourism demand model (dependent variable: OTDexp)
(Source: author's calculations using the data of WDI (2022) and OECD (2022))

Secondly, in Table 6, the empirical results of the outbound tourism demand model where
tourism OTDdep (departures) is the dependent variable are shown.

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Variable Model 1b Model 2b Model 3b Model 4b

L.OTDdep 0.965*** 0.968*** 0.998*** 0.995***
(0.0146) (0.0140) (0.00607) (0.00768)

NNI 0.00451*** 0.00486*** 0.00244*** 0.00336***

(0.000699) (0.000728) (0.000534) (0.000590)

HSR 1.637** 4.049***

(0.819) (0.615)

REER -0.668 -1.340***

(0.570) (0.511)

_cons -77.54*** -99.09*** 19.19 34.25

(11.10) (12.72) (47.31) (38.65)
Number of observations 367 334 327 304
Number of groups 38 35 34 32
Number of instruments 20 21 21 22
Sargan test (p-value) 0.2151 0.2823 0.0833 0.1393
AB2 test (p-value) 0.3507 0.3590 0.2481 0.2564
Standard errors in parentheses,* p < 0.1, ** p < 0.05, *** p < 0.01
Table 6: Empirical results of outbound tourism demand model (dependent variable: OTDdep)
(Source: author's calculations using the data of WDI (2022) and OECD (2022))

Before discussing the results, it is vital to evaluate the results of the diagnostic tests.
Accordingly, the validity of models (1a)-(4a) and (1b)-(4b) is confirmed. Firstly, the coefficient
of lagged dependent variable is positive, less than 1, and statistically significant at the level of
1%, which confirms the dynamic nature of outbound tourism demand and confirms the proper
usage of the dynamic panel model. Furthermore, the p-value of the Sargan test for over-
identifying restrictions is higher than 0.05. This indicates there is no problem of endogeneity in
any model specification. Moreover, the p-value of the AB2 test is greater than 0.05 in all cases,
which confirms no existence of the problem of autocorrelation. To control for the robustness of
the results we have performed four different models for each of two indicators of outbound
tourism, i.e. departures and expenditures. Hence, we are introducing independent variables
HSR and REER individually in the specific model where the only constant control variable was
NNI, and finally we discuss the results of the fourth model since robustness of the results is
confirmed. The empirical results confirm the positive effects of the NNI on international
departures and expenditures, while the results for HSR and REER are diverse depending on the
independent variable specification. When the outbound tourism proxy is international
expenditure, than the model shows negative HSR effects on OTDexp and positive effects of
REER on OTDexp. On the contrary, the opposite results are revealed in the model when the
proxy for outbound tourism are departures. In this case, OTDdep shows to be positively related
to the rise of HSR and negatively to the change in REER. Those mixed results are already
present in the literature and elaborated in the literature review, while their explanations can be
captured in the essence of tourism travel motivations and specific tourism demand variable used
in the model of outbound tourism. Accordingly, when the price competitiveness of origin
country drops, although the total departures fall, the expenditures rise since the departing tourist
need more own currency for tourism costs in a destination (Song, Witt & Li, 2009; Ahmed,
2015). Furthermore, when the expectations and uncertainty in the origin country rises, and
consumption drops, than the departures still rise, showing persistence of tourism travel,
although the expenditures on travel and when abroad drop (Šimundić, 2017).

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5. CONCLUSION
Tourism demand growth over time shows its persistence despite occasional shocks. This study
indicates the socio-economic nature of outbound tourism and brings new insights to this stream
of literature, and confirms that the present level of income, propensity to consume tourism
product, economic environment and certainty together with the worth of the origin country’s
currency are significant determinants of outbound tourism demand. The level of development
positively affects departures and expenditures, which is in line with the evidence that the OECD
countries are largest tourism source market in the world. In addition, the presented evidences
confirm that tourism product is no longer luxury good, as it was in the middle of 20th Century,
available just for few, but that tourism product is nowadays normal good, available for larger
pool of tourists and consumed by the growing number of tourists. Furthermore, the results
reveal that although the uncertainty may rise, the number of people traveling still rising and
only expenditures are reduced. On the contrary, if the national currency loses its worth, thus
making tourism product abroad more expensive, the departures are reduced although the
expenditures abroad rise, since the travellers need larger budget for the same tourism product.
Hence, the outbound tourism demand is more sensitive on price change and price
competitiveness that on the uncertainty in the environment. This has also been confirmed
recently when the recovery of international tourism after COVID pandemic is concerned. Thus,
the results of this study could be of large importance for tourism destination’s policy makers
especially when such information are used to plan economic activities or development
strategies. In addition, origin countries could use the loss in price competitiveness and develop
stronger domestic tourism to replace the external leakages for outbound tourism. There are
some limitations of this study. The sample and the time period for the analysis could be
enlarged, although the results are reasonable and as such consistent. The further research could
include additional variables to test the same model or use the same models on larger sample
size.

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 83rd International Scientific Conference on Economic and Social Development - "Green Marketing" – Varazdin, 2-3 June, 2022

IMPACT ASSESMENT OF DIGITAL SKILLS ON R&D INVESTMENT

Neva Babic
University North, Croatia
nbabic@unin.hr

Ljerka Luic
University North, Croatia
ljluic@unin.hr

Ante Roncevic
University North, Croatia
aroncevic@unin.hr

ABSTRACT
In nowdays society, especially in the world affected by the pandemic, the need to digitalize all
aspects of the economy and society has grown tremendously in a relatively short period of time.
Digital transformation, digital economy, digital intelligence and all other aspects of digital
society are topical issues nowdays. In order for the digital transformation to be successful, one
of the preconditions is the development of society’s digital skills. Therefore, we are faced with
a situation where digital skills are one of the basic skills sought in the modern society,
supported by the fact that in recent years digitalisation is increasingly being measured by
various indicators to more accurately identify society's development needs in digitalization. On
the other hand, investing in research and development is mentioned in all strategic documents
and plans as a basis for global competitiveness, business and growth. The digital economy is
mentioned in the context of the innovation market and innovators, and as a bridge that should
eliminate certain sore spots in social and economic interactions. In this regard, investment in
research, development and innovation should increase in terms of R&D expenditure in GDP,
which currently stands at around 1% in Croatia according to the World Bank collection.
Numerous indicators have been developed on the state level, but also at the European and
global level, that should measure the success of such ventures. From all this it is clear that
digital skills and investment in research, development and innovation are imperatives for the
European Union and the Republic of Croatia regarding the economic growth and development
and achieving competitive advantage, and that their connection and continuous growth and
development are both key to Croatia's success but also to the society as a whole. Given the
interconnectedness and interdependence of these two concepts and the fact that all economic
and social goals concern investment in research, development and innovation, and
digitalization and digital skills at the same time, this study was conducted through a comparison
of different data sets connected to these two terms, seeking to identify the level and source of
their interdependence and suggest possible improvements.
Keywords: digitalization, digital skills, R&D investment, business intelligence tools

1. INTRODUCTION
In the last two decades, technology has been evolving at a rapid pace, and in the line with
development of technology. Companies face numerous challenges on a daily basis that are
forcing them to make changes. In order for companies and various organizations to keep up
with the times and be competitive in the markets in which they are positioned, it is necessary
to invest in research, development and innovation. (Satalkina, Steiner, 2020) According to
Georgescu et al. (2021), digital transformation requires cultural change as digitalization is more
about people than just technology.

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In the near future it is expected that young entrepreneurs, representing the generation using the
technology from their early age, will just need to work on improving their digital skills on their
path of becoming digital entrepreneurs (Bejinaru, 2021). Babic (2019) states that, in order for
people and employees to keep up with digital transformation nowdays, it is important for them
to continuously improve their digital skills which are no longer regarded as only computer
skills, but include a range of skills that extend from operational to cognitive, social and systemic
skills, collectively referred to as digital literacy. This set of skills enables an individual to
succeed in finding, evaluating and creating information, and they are considered a prerequisite
for young people to successfully enter and stay in the labor market but also be active citizens
of the knowledge society. Since the education system often does not sufficiently respond to the
needs of the labor market for a development of digital skills, cooperation between academia
and industry is necessary to adequately fulfill the needs to develop certain skillsets, but also to
promote entrepreneurship from the earliest stages. In the process of creating innovation
ecosystem, universities should play a huge role and their innovation ecosystem role should help
their stakeholders and collaborating actors but also their policy-makers to act according to this
role in various contexts. (Taxt et al., 2022) For companies, on the other hand, digital skills have
proven to be one of the key factors for the development of innovations, and they believe that
the current working population needs retraining in order to compensate for their lack in
knowledge. According to Milenkova, Lendzhova (2021), developed digital skills of individuals
are not only the main prerequisite for a successful integration in the labour market but also a
condition to become a digital citizen. This tends to get challenging when considering different
perspectives and especially in regard to gender digital gap. The ability to follow changes in
terms of digitalization and improve their digital skills should ensure women’s digital inclusion
and diminish inequalities on many other fields as well (Mariscal et al., 2019). However, by
restructuring business patterns in all industrial sectors, digitalization is becoming the result, but
also the source of innovation, and entrepreneurs are no longer just drivers of change but also
influential factors of digital transformation. According to available research, Satalkina and
Steiner (2020) state that 96% of leaders in the business world consider digital skills to be key
to innovative development and constant growth. The leading countries in Europe in terms of
digital entrepreneurship are precisely the countries whose population’s digital skills are most
developed. Satalkina and Steiner (2020) maintain that this is greatly influenced by external
system conditions such as institutional influence, new market trends and changes in competitive
advantage, but also by social patterns such as digital trust and technology adoption. On the other
hand, when talking about investing in R&D, the main issue is a lack of connection between
departments and a manager’s education about its importance. “Closeness to science” and
awareness about its importance either by doing it or just understanding it are first steps
companies should take when becoming aware of a contribution of basic research to innovation
(Nagane, Sumikura, 2020). Once firms engage in R&D, their size and especially financial
resources are the factors that mostly define their future engagement and performance in it.
According to Perez-Alaniz et al. (2022), for larger-sized firms, a precondition to be engaged in
process and product innovation are their financial resources, however, small-sized firms may
consider R&I only as a counter-measure to when their performance in the market falls, and not
as the opportunity to grow. Cahyadi and Magda (2021) state that there exists a positive and
significant connection between digital readiness, innovation, and 4.0 competitiveness. The
process of research and innovation is changing rapidly, while digital technologies enable
science and innovation to become more collaborative, international and open to citizens. It is
very important that Europe accepts these changes and thus strengthens its position as a lead for
science, new ideas and sustainable investment in the future. (European Commission, 2016) That
the Republic of Croatia is also moving in the direction of science, innovation and research is
indicated by the "National Recovery and Resilience Plan of the Republic of Croatia" (2021),

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which was created in accordance with guidelines and key documents of the European Union.
Its measures are focused on recovering the economy and reducing imbalances primarily through
investment in research and innovation capacity and the application of advanced technologies,
all with the aim of encouraging innovation. On the other hand, as regards to the digitalization
process, the current need to reduce administrative and regulatory burdens and achieve greater
transparency could be accomplished by digitizing various business processes and services
(Government of the Republic of Croatia, 2021). The problem that lies behind the research’s
topic stems from the growing need to develop digital skills due to the current digitalization
process on the one hand, and emphasizing the importance of investing in research, development
and innovation on the other. Due to the above, the subject of this paper is the analysis of the
connection between digital skills and the investment in research, development and innovation,
i.e. linking the development of digital skills with investment in research, development and
innovation at the European Union level. Therefore, the aim of this research is to link digital
skills and investment in research, development and innovation through available models for
monitoring the above. The research question formulated at the beginning of creating the
framework in which the work would move was: Is there a connection between the level of
development of digital skills and investment in research and development? Based on this
question, the following hypotheses were made:
• H1: The level of digital skills development is positively related to business enterprise
expenditure on R&D (BERD).
• H2: Countries with lower digital skills have a higher share of foreign-funded GERD.

2. METHODOLOGY
For the purpose of conducting the research, public databases of the World Bank, OECD,
UNICEF, Central Bureau of Statistics, Digital Economy and Society Index and Eurostat were
analyzed and basic comparisons of the type and scope of data offered and related to the topic
were made. After analyzing the information, it was decided that the data from the Eurostat
public database would be analyzed for the purposes of this paper, since it contains the necessary
information on digital skills and investment in research and development. From the available
Eurostat databases by topics, a database Science, technology, digital society was chosen, as it
contains all the necessary data sets. After the additional analysis of the available frameworks,
the following data was selected:
• A set of data called Digital skills was taken from the Digital economy and society database,
which refers to individuals between the ages of 16 and 74 who have only basic digital skills
and those with better developed digital skills. The data set was taken in such a way that it
contained the total percentage of all individuals in the specified category, the total
percentage of male individuals in the specified category, and the total percentage of female
individuals in the specified category,
• Data sets within the category Research and development were downloaded from the Science
and Technology database, as follows:
- Gross domestic expenditure on R&D (GERD), tables in the category GERD by source
of funds, which show the relative shares of different sources of funds in research and
development, 5 tables showing the percentage of shares of GERD funded by different
sectors: business sector, government, higher education, private non-profit sector and the
rest of the world.
- Business enterprise expenditure on R&D (BERD), tables in category BERD by NACE
Rev. 2 activity and source of funds, which show expenditures of companies for research
and development, category all sectors, amount in millions of euros.

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The scientific methods used in the research are methods of analysis, synthesis and description,
and the data were processed using the POWER BI tool. Downloaded excel tables contained 3
sheets: summary with basic information about a table, structure with a more detailed insight
into the structure of the displayed data, and Sheet 1 with a display of data fields by year. The
data was analyzed and it was noticed that the amount of data varies by country. Excel
spreadsheets have further been refined, leaving only data for the planned analysis framework
by country and all data by year. The above tables were then linked in the three categories
mentioned above with sheets containing different data sets for possible analysis and
comparison. The three described tables were loaded in the Microsoft Power BI software tool
and the first row was set as the column heading. The tables were then linked together by a
country name. Finally, an analysis was made and the results are presented in the next chapter.

3. RESULTS
Due to the large amount of available data, and taking into account the topic of the research and
the link between digital skills and investment in research and development, the following
indicators were used to visualize research results:
• Digital skills: individuals between the ages of 16 and 74 who have basic or better overall
digital skills. This indicator is based on selected activities performed by individuals aged
16 to 74 on the Internet in four specific areas (information, communication, problem
solving, content creation). It is assumed that individuals who have performed certain
activities have appropriate skills, and the indicator could be considered as a replacement for
digital competencies and skills of individuals.
• Gross domestic expenditure on research and development: percentage of GERD (gross
domestic expenditure on research and development) financed by industry, government,
higher education and the private non-profit sector. The fifth source of funding shown is
GERD funded from abroad. Research and development is an activity in which there are
significant transfers of resources between units, organizations, sectors and countries. The
importance of funding sources is recognized in one of Barcelona goals of the Lisbon
Agenda, which considers that the appropriate ratio for research and development is 1/3
financed from public funds and 2/3 from private ones.
• R&D expenditure: measure of intramural R&D expenditure within the business sector
during a given reference period, for all statistical classifications of economic activities and
sources of resources, amount in millions of euros.

It was also noted that the most complete set of data is the data from EU member states, Norway
and Switzerland. Therefore, it was decided that the analysis should be conducted within the
mentioned framework. The ratio of all listed indicators by specific European Union countries,
including Norway and Switzerland, for the observed year 2019 that contained all the data in the
required categories, is shown below.

3.1. Comparison of digital skills development in male and female population by countries
Using the digital skills indicator, the percentage of the population aged 16-74 that has developed
basic or better overall digital skills, according to the Eurostat base unit, is shown below. The
representation is shown separately for men and women.

Figure following on the next page

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Figure 1: Review of the comparison of digital skills development in women and men by
specific countries
(Source: author's work, 2022)

3.2. Relative shares of different sources of funds in R&D

For the purpose of presenting the structure of investments in research and development for the
observed country and year, the indicator gross domestic expenditure on research and
development (GERD) was used: percentage of GERD financed by industry, government, higher
education, private non-profit sector and the rest of the world was shown as a relative share by
sector.

Figure 2: Relative shares of the different sources of funds in R&D

(Source: author's work, 2022)

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3.3. The relationship between relative shares of different sources of funds in R&D and
development of digital skills by countries
After analyzing the level of development of digital skills and gross domestic expenditure on
research and development, the two categories were compared. As a result, a graph representing
the relationship between relative shares of different sources of funds in R&D and development
of digital skills by country, in the observed year, is shown.

Figure 3: The relationship between the relative shares of the different sources of funds in
R&D and development of digital skills by countries
(Source: author's work, 2022)

3.4. The relationship between digital skills development and share of gross domestic
expenditure on R&D by industry
Given the mentioned importance of funding sources, recognized in one of Barcelona goals of
the Lisbon Agenda, pointing out that the appropriate division for research and development is
1/3 of funding from public funds and 2/3 from private funds, a comparison was made between
the level of development of digital skills and relative share of gross domestic expenditure on
research and development financed by industry in the observed year.

Figure following on the next page

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Figure 4: The relationship between digital skills development and share of gross domestic
expenditure on R&D by industry
(Source: author's work, 2022)

3.5. The relationship between digital skills development and investments from abroad
Using the category of funding sources, and in order to compare the rate of digital skills
development and investment from abroad, the relationship between digital skills development
and relative share of gross domestic expenditure on research and development financed from
abroad / the rest of the world in the observed year was analyzed.

Figure 5: The relationship between digital skills development and share of gross domestic
expenditure on R&D financed by rest of the world
(Source: author's work, 2022)

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3.6. The relationship between digital skills development and R&D spending (BERD)
Using the indicator of the level of development of digital skills and the indicator of expenditures
of companies for research and development presented in millions of euros, a comparison of the
level of development of digital skills with the activities of companies related to research and
development was made.

Figure 6: The relationship digital skills development and R&D spending (BERD)
(Source: author's work, 2022)

The survey analyzed only data for the European Union and Norway and Switzerland. For a
more relevant data set and comparison, it would be useful to supplement the data with countries
that are world leaders in R&D investment, but also to take into account the context of each
country when processing results so that certain phenomena could be analyzed and explained
separately. The indicators used are limited to certain frameworks in terms of digital skills and
investment in research and development. For a broader picture and more accurate results, the
research should include several interrelated factors and certainly consider data and indicators
for innovation separately. This could not be done for this research since the data for innovation
activities are available for different years. The results obtained present a need for conducting a
much larger research that would require covering larger data sets in order to obtain a more
detailed picture. Therefore, it is proposed to use these results as a basis for a more detailed study
of a larger set of data that could be used to clarify certain deviations from the overall trends /
results.

4. DISCUSSION
The research results presented in the third chapter are divided into six separate units, depending
on the observed indicators. In the first part, the degree of development of digital skills among
women and men in certain countries is presented. In order to make the graph, a set of data was
used that refers to individuals between the ages of 16 and 74, for those who have only basic
digital skills and those with better developed digital skills. Graph 1 shows that in most cases
men have better developed skills. Women predominate in Latvia, Cyprus, Italy, Slovenia,
Lithuania, Sweden and Finland. Moreover, in Sweden and Finland they exceed a percentage of
75% and more percent. When it comes to men, in the Netherlands and Norway they
predominate with percentages of over 82%. Countries with the lowest numbers of women and
men with developed digital skills are Romania, Latvia and Bulgaria.

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The second part shows the amount invested in research and development divided by sectors for
each country. Business sector investments, public sector investments, higher education
investments, private non-profit sector investments and investments of the rest of the world were
observed. Countries with the biggest business sector investments in research and development
are: Switzerland, Germany, Belgium, Ireland, Sweden, Slovenia and Denmark. Countries
whose business sectors invest the least are: Latvia, Lithuania, Cyprus, Croatia, Bulgaria and the
Czech Republic. For countries that see a decrease of share of investments by the business sector,
the trend of growth of the share of investment by the government or from abroad can be noticed.
The third section represents a comparison of indicators considered in the section 1 and 2.
Namely, graph 3 shows the ratio of investment of different sectors in research and development
and the percentage of digital skills development in certain countries. When we look at the results
obtained, we can see that a number of questions arise. Interestingly, the chart shows that certain
countries with large amounts of dedicated research and development funds invested by business
sector have a low percentage of population with developed digital skills. Such countries include
Romania and Italy. However, there is also an opposite situation, such as with Norway and
Greece, where a population with highly developed digital skills has a low amount of shares of
investment in research and innovation by business sector, and which grows in favour of the
government. Finland and France, like Greece, have highly developed digital skills, which
surpass investments in R&D by business sector. Ultimately, the least investment in all observed
countries comes from higher education and the private nonprofit sector. The chart also shows
that countries with low percentage of digital skills development have high investments from the
rest of the world (Latvia, Lithuania, Croatia). Chapter 4 shows the relationship between digital
skills and the share of investment in research and innovation of a country's business sector. In
this case, there are large oscillations when it comes to digital skills and the order of countries
according to the percentages of business sector investment, which is evident from the digital
skills curve. Namely, Norway, which has digital skills of over 80% and is the strongest in terms
of digital skills development, has amongst lowest shares of GERD financed by industry. A
similar case is with Latvia, the Czech Republic and Lithuania, only the percentages are slightly
lower, but the ratio of digital skills in the population and investment is equal. Luxembourg has
an equal ratio of population with digital skills and GERB financed by industry, and Spain and
Estonia are closest to it in terms of population with digital skills developed and investment ratio
of GERB financed by industry. Chapter 5 shows the relationship between digital skills and the
share of investment in research and development from abroad / the rest of the world. Namely,
in this instance it is visible that countries with the lowest percentage of people with developed
digital skills have a fairly high share of foreign investments (Lithuania, Cyprus, Latvia and
Bulgaria). It can be concluded that the result from the previous chart is not only repeated and
confirmed, but that external and foreign stakeholders have a high level of interest in such
countries. Chapter 6 shows the total investment of companies in research and development in
millions of euros per year in relation to the percentage of digital skills development. It can be
seen that Germany invests the most of all countries (approximately 72,000,000.00 €). Namely,
no other country has invested as much as Germany and has a ratio of money invested higher
than the percentage of the population with developed digital skills. The countries that invest the
least financially, but have a mediocre development of digital skills are Malta, Slovenia,
Slovakia, Croatia, Bulgaria, Luxembourg, Cyprus and Belgium. Following all of the above, we
can conclude that the answer to the research question (Is there a link between the level of digital
skills and investment in research and development?) is that the link exists and there is a visible
and fairly uniform trend for some of the observed categories and countries. However, some
countries show some deviations from the trend, and the political, economic, legal and social
context of each country should be analyzed in more detail in order to explain these deviations.

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It is also concluded that hypothesis H1 (The level of digital skills development is positively
related to the business enterprise expenditure on R&D (BERD) was rejected because there is
no clear link between the trend of the chart showing digital skills development and the one
showing the BERD. Hypothesis H2 (Countries with lower digital skills have a higher share of
foreign-funded GERB) was partially confirmed in most cases in that a decrease in the
percentage of digital skills increases the percentage of foreign-funded GERB, but there are
discrepancies that should be analyzed in isolation.

5. CONCLUSION
Based on the conducted research, it is clear that the countries with the highest level of
development of digital skills are those countries that are highly developed and economically
advanced in other respects. The same percentage of countries shows a significant share of
corporate investment, while this share shifts to forein investments as the level of development
of digital skills per country decreases. The interdependence of digital skills and their impact on
the investment in research and development could not be clearly determined in this way, but
the foundations for a more detailed analysis have certainly been laid. The Eurostat database
analysis conducted for the purpose of this paper identified indicators for digital skills and the
investment in research and development, which consists of gross domestic expenditure on
research and development for different sectors and expenditure of research and development of
companies. The analysis concluded that the interdependence of digital skills and their impact
on investment in research and development could not be clearly defined in this way.

LITERATURE:
1. Babić, A. (2021). 'Digital skills as a perspective of development of the economy and
important digital transformation factor', Ekonomski pregled, 72(1), 59-87. https://doi.org/
10.32910/ep.72.1.3
2. Bejinaru, R. (2021). Key issues of tranzition to digital entrepreneurship. Proceedings of the
International Conference on Business Excellence, 15(1), 91–101. https://doi.org/10.2478/
picbe-2021-0009
3. Cahyadi, A.; Magda, R. (2021.) Digital Leadership in the Economies of the G20 Countries:
A Secondary Research. Economies 9: 32. https://doi.org/doi:10.3390/economies9010032
4. European Commission, Directorate-General for Research and Innovation, Open innovation,
open science, open to the world: a vision for Europe, Publications Office, 2016,
https://data.europa.eu/doi/10.2777/061652
5. Eurostat. (2022). BERD by NACE Rev. 2 activity and source of funds. Retrieved
25/02/2022 from https://ec.europa.eu/eurostat/databrowser/view/rd_e_berdfundr2/default/
table?lang=en
6. EUROSTAT. (2022). GERD by source of funds. Retrieved 25.02.2022 from
https://ec.europa.eu/eurostat/databrowser/view/rd_e_fundgerd/default/table?lang=en
7. EUROSTAT. (2022). Individuals' level of digital skills (until 2019). Retrieved 25.02.2022
from https://ec.europa.eu/eurostat/databrowser/view/isoc_sk_dskl_i/default/table?lang=en
8. Georgescu, I., Androniceanu, A-M., Kinnunen, J., & Dragulanescu, I. V. (2021).
Correlative approach to digitalization and economic growth. PROCEEDINGS OF THE
INTERNATIONAL CONFERENCE ON BUSINESS EXCELLENCE, 15(1), 44-57.
https://doi.org/10.2478/picbe-2021-0006
9. Government of the Republic of Croatia (2021) National Recovery and Resilience Plan 2021
– 2026, available at https://planoporavka.gov.hr/UserDocsImages/dokumenti/Plan%20
oporavka%20i%20otpornosti%2C%20srpanj%202021..pdf?vel=13435491

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10. Mariscal, J.; Mayne, G.; Aneja, U. and Sorgner, A. (2019). Bridging the Gender Digital
Gap. Economics: The Open-Access, Open-Assessment E- Journal, 13 (2019-9): 1–12.
http://dx.doi.org/10.5018/economics-ejournal.ja.2019-9
11. Milenkova, V.; Lendzhova, V. (2021). Digital Citizenship and Digital Literacy in the
Conditions of Social Crisis. Computers 2021, 10, 40. https://doi.org/10.3390/
computers10040040
12. Nagane, H. S., & Sumikura, K. (2020). Which Factors Influence a Company’s Evaluation
of the Contribution of Basic Research to Innovation?. Technology Innovation Management
Review, 10(8): 38-51. http://doi.org/10.22215/timreview/1379
13. Perez-Alaniz, M., Lenihan, H., Doran, J., & Hewitt-Dundas, N. (2022). Financial resources
for research and innovation in small and larger firms: Is it a case of the more you have, the
more you do? Industry and Innovation. https://doi.org/10.1080/13662716.2022.2036597
14. Satalkina, L.; Steiner, G. (2020). Digital Entrepreneurship and its Role in Innovation
Systems: A Systematic Literature Review as a Basis for Future Research Avenues for
Sustainable Transitions. Sustainability 2020, 12, 2764. https://doi.org/10.3390/su12072764
15. Taxt, R. E., Robinson, D. K., Schoen, A., & Fløysand, A. (2022). The embedding of
universities in innovation ecosystems: The case of marine research at the University of
Bergen. Norsk Geografisk Tidsskrift-Norwegian Journal of Geography, 76(1), 42-60.
https://doi.org/10.1080/00291951.2022.2041718

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INFLUENCE OF FANS ON RESULT EFFICIENCY IN FOOTBALL

Hrvoje Ajman
Josip Juraj Strossmayer University of Osijek,
Faculty of kinesiology Osijek, Osijek, Croatia
hajman@kifos.hr

Josip Cvenic
Josip Juraj Strossmayer University of Osijek,
Faculty of kinesiology Osijek, Osijek, Croatia
jcvenic@kifos.hr

Mateo Paulovic
Josip Juraj Strossmayer University of Osijek,
Faculty of kinesiology Osijek, Osijek, Croatia
mpaulovic@kifos.hr

ABSTRACT
Some previous studies suggest that fans have a positive influence on the home teams and the
result of competition. The primary goal of this paper is to test the hypothesis of the positive
influence of fans on players and referees on the football field. We used the term "home field
advantage", meaning that the fans bring the home team an advantage at the game. The study
sample consists of seasons 2019/2020 and 2020/2021 in the 1st Croatian league. The variables
in the study are points won, shots on target, yellow cards, red cards, fouls and fans attendance.
Due to the situation with the COVID-19 pandemic during the 2019/2020 season, almost all
matches were played without spectators, which allowed us to test the hypothesis of the
connection between the "home field advantage" and the presence of fans on the stands.
Statistically significant differences were detected in the variable’s points won by the host, free
kicks by hosts and guests and shots on target by hosts. Statistical analysis indicated that with
the presence of spectators, the home team won 1.76 points, while in the period without the fans
it was 1.44 per game. The results of this study confirm that audience contributes to the
performance of the home team and inferior performance of visiting team, also on performance
and decision-making of referees.
Keywords: Covid-19, football, home field advantage, spectators

1. INTRODUCTION
Football fans are a group of people cheering on a football team. They can be fans of a club or a
national team. The connection between a player and a fan is a complex relationship that is
determined by a number of factors within a player’s performance during a match. The general
effect of the fan's positive shouts on the player is to raise his level of self-confidence,
excitement, and to "raise" his level of adrenaline with the purpose of better performance of
football players. For some players, the audience or fans will be a source of stress, feelings of
discomfort and can cause anxiety and "pressure" which will result in poorer performance. This
special connection between the fans and the players is called the "Fan Effect" (Murrell, Dietz,
1992). The key to the socio-psychological impact on a player’s performance is the connection
between him and the player. The player and their performance is divided into novice athletes,
middle class athletes and elite athletes (Elferink-Gemser, et al., 2010). It is believed that
beginner athletes or young players who meet the audience for the first time will often be
negatively influenced by fans, due to the stress and pressure they must be the best, they will
experience "burnout" and their performance will be worse.

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Middle-class athletes to whom fans can have both positive and negative effects, and elite
athletes who, if they have fans who support them, get the necessary "inner strength" and their
performance will be of better quality. The term "home field advantage" is generally known in
the world of sports, and it is closely associated with the audience or fans on various sports
arenas, fields or tracks. Studies point to the analysis and research of the notion of home field
advantage in all sports both individual and team sports (Legaz-Arrese, Moliner-Urdiales,
Munguía-Izquierdo, 2013). Competitions across Europe and North America were most
frequently researched. The base of research is large but for the purposes of this research, the
following will be singled out: Jones (2015) for baseball; Pollard and Gómez (2013) for
basketball; and several studies from football by Fischer and Haucap (2020), Tilp and Thaller
(2020), Pollard and Gomez (2014) some of which were also conducted in the emerging situation
with the COVID-19 virus pandemic. Furthermore, when defining the term “domestic
advantage”, various factors are taken into account that can be used to describe the term of
research. The most common factors in determining are the fan effect (Inan, 2020); referee
decisions (Boyko et al., 2007), knowledge of the terrain, home team tactics, and the
psychological factor it encompasses in his research (Pollard, 1986). According to Chelladurai
(1994), the population engaged in sports is divided into active and passive populations. The
active population consists of participants in organized sports programs, participants in
recreational programs that are conducted regularly and occasionally. The passive population
consists of television viewers, viewers at a sporting event. Television viewers include the entire
population that watches or listens to a sports program via television, radio or any multimedia
device. Spectators at a sporting event include all spectators who are at the stadium or auditorium
during the match and follow the sporting event. This passive population includes fans. Fans can
be defined as a heterogeneous group of people who are part of the spectators or sports audience
at sporting events. The original idea of forming such a group was to cheer on their team during
a sporting event by cheering or shouting. Lalić (1993) defines organized groups of individuals
as a fan audience whose goal is to identify with their team, specific and ritualized behavior,
special and accepted iconography with the team they support, or to achieve emotional
connection all for the purpose of supporting their team to achieve the better the result on the
battlefields. The presence of spectators at sporting events largely depends on the country and
the popularity of the sport in that country. In Europe, the most popular and most visited sport is
football. Considering the top 5 leagues in Europe (English Premier League, German
Bundesliga, French League 1, Italian Serie A and Spanish League) according to statistics, the
most visited stadiums in 2019 are those in Germany with an average of 42,740 spectators per
sporting event. According to statistical data, the most popular sport in Croatia is also football.
Attendance at the stadium is relatively low, given the capacity of the stadium and the popularity
of the domestic league in the 2019/2020 season. The average attendance of the stadium was
2837 spectators per sporting event while in the season 2020/2021. is 147 spectators lower due
to the ban on spectators attending the stands where they were allowed to attend from the fifth
to the ninth round of the competition.

2. METHODS
The study sample consists of 380 matches played during 2019./2020. season. and 2020./2021.
in the First Croatian Telecom League (HNL), the highest level of competition in Croatian
football. During the two seasons played, 11 clubs participated in 380 games (Dinamo, Rijeka,
Hajduk, Osijek, Gorica, Lokomotiva, Istra 1961, Slaven Belupo, Varaždin, Šibenik, Inter
Zaprešić). The matches are divided into 36 rounds each season, five matches per round. In this
research, the sample of variables consist of home team points, home team shots on target, away
team shots on target, home team yellow cards, visiting team yellow cards, home team red cards,
away team red cards, home team fouls, away team fouls and fans attendance.

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The values of the variables were taken from the Results website (https://www.rezultate.com/)
and processed using notational analysis. For statistical analysis, the program Statistica 13 was
used. For the variables home team and away team win, draw the frequency values were
calculated. For all the other variables the basic descriptive parameters were calculated (mean,
standard deviation). For the determination of the relation between the variables, the T-test for
independent samples was calculated.

3. RESULTS
Using the program Statistica 13, data were processed and compared during the matches with
the presence of spectators and during the time when the spectators were limited to a certain
number (in relation to the capacity of the stadium) or were forbidden to attend the matches. The
primary task was to determine the advantage of the home field through the points won during
all observed matches and to determine whether there is dominance in technical and tactical
terms during matches and whether the audience influences the referee's decisions and the
performance of players by monitoring certain variables. The victory of the home team scores
with 3 points, a draw with 1 point, while the victory of the away team is -3 points. Furthermore,
in order to determine the advantages of the home field during the presence of spectators at the
stadium and during the time when the number of spectators was limited or should not be at the
stadium at all, the variable of points won at home was divided into two groups (PS- with the
presence of spectators = 179 matches and LS- limited number of spectators or without
spectators = 181 matches) whose results are shown in Table 1.

PS L
S
Frequency % Frequency %
Home team win 91 50.838 73 40.331
Draw 42 23.464 41 22.652
Away team win 46 25.698 67 37.017
Total 179 181
Table 1: Frequency of results with the presence of spectators and without the presence of
spectators

In further analysis, statistical data was collected in order to test the advantages of the home field
with the presence of fans or without the presence of fans in stadiums during matches. These
results are shown in Table 2.

PS LS
N1 AS1 SD1 N2 AS2 SD2 t-value df p
Home team shoot on
179,00 10,60 4,30 181,00 9,35 3,70 2,96 358,00 0,00
target
Away team shoot on
179,00 8,54 3,66 181,00 8,38 3,92 0,40 358,00 0,69
target
Home team points
179,00 1,76 1,31 181,00 1,44 1,34 2,31 358,00 0,02
won
Home team yellow
179,00 2,45 1,59 181,00 2,21 1,42 1,49 358,00 0,14
cards
Away team yellow
179,00 2,75 1,50 181,00 2,46 2,16 1,45 358,00 0,15
cards
Home team red cards 179,00 0,10 0,30 181,00 0,12 0,33 -0,63 358,00 0,53
Away team red cards 179,00 0,17 0,42 181,00 0,10 0,30 1,91 358,00 0,06
Home team free kicks 179,00 15,42 4,51 181,00 14,07 4,36 2,89 358,00 0,00
Away team free kicks 179,00 15,21 4,85 181,00 14,19 4,37 2,10 358,00 0,04
Table 2: Descriptive parameters of the observed variables

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Observing the data from Table 2 and statistical analysis it is concluded that in four out of nine
variables a significant difference is determined. By processing the data of the variable home
team shots on target, a significant difference was found during the period without the audience
in relation to the time when the audience was present at the stadium (p-value = 0.00) while in
variable away team shots on target is not found a significant difference. Furthermore, according
to the points won by the home team during the presence of the audience and without the
presence of the audience, there is also a significant difference (p-value = 0.02), 1.44 points are
won by the hosts without the presence of the audience while on the period without the audience
that value was 1.76. In the variables of yellow cards, there are no significant differences for the
home and away teams, as well as for the red cards of the home and away teams. Analyzing
variable free kicks by the home and away teams, it was found a significant difference with
regard to the presence of spectators. The result in the variable free kicks for the home team with
the presence of spectators is 15.42 per game, while in the period without the presence of
spectators the value is 14.07 free kicks per game, which confirms a significant difference (p-
value = 0.00). Also in the variable free-kicks of the visiting team, the average score with the
presence of spectators is 15.21 free kicks per game while during the games without the presence
of spectators the number dropped to 14.19 free kicks, and also a significant difference in that
period was found (p-value = 0.04).

4. DISCUSSION
By processing the statistical data of all matches during the past two seasons of the football
league (seasons 2018./2019. and 2019./2020.) in which matches were played in the presence of
spectators and without the presence of spectators due to the COVID-19 virus pandemic, a
significant difference was determined in several variables. The variables that differ significantly
are the free kicks for the home and away team, the home team shots on target and the home
team's points won. By studying matches without the presence of spectators, the claims of
Pollard and Pollard (2005) were noticed and confirmed, who are guided by the thesis that the
advantage of the home field in sports, and especially in football, is a multidimensional issue.
That is, there are significantly more factors that affect performance during a football match than
statistics show. During their research, they came to the conclusion that there is a spectator
influence on the advantage on the home field. That is, this spectator-related factor exists but is
difficult to isolate and quantify. Comparing the results of their research with this study and the
obtained data, it is established that the 1st HNL in 2002 had a percentage of 68.5% of home
victories, while according to this research this number decreased to 50.84% with the presence
of spectators while without the presence of spectators to 40.33%. Dilger and Vischer (2020)
conducted a study in which they confirmed these theses in the first German league. Namely, the
results of their research during the game with the presence of spectators and the victory of the
home team is 48%, while the percentage after the break of the championship and continued
without the presence of spectators fell to 33%, a drop of 0.44 points per game. Comparing this
research, we confirm the thesis about the loss of the advantage of the domestic field with regard
to the presence of spectators. More precisely, the results are 50.84% with the presence of
spectators, while without the presence of spectators, that number drops to 40.33%. More
precisely, the drop of the home team's points of 0.32 points per game is evident, which makes
a significant difference. Also, by comparing the variable "home team shots on target", Dilger
and Vischer proved that there is a statistically significant difference (p value = 0.002), more
precisely that the home team produce a lower number of shots on target. The results are only
13.33 during the game without the audience in relation to the time in the presence of the
audience which is 15.98 shots per game. Comparing this with the results of this research, whose
results with the presence of the audience are 10.60 shots per game, while without the presence
of the audience, that number is 9.35, which statistically means a significant difference in the

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results. McCarrick et al. (2020) confirm the thesis of a significant difference in free kicks for
both the home team and the away team in a survey conducted on the 15 strongest European
football leagues. The conducted research for free kicks for the home team differs significantly
in the period with the presence of the audience from the period without the presence of the
audience (p value = 0.017). The same conclusion also applies to the variable free kicks to the
away team. Which only confirms the results of this research which also identifies significant
differences between these periods (p value = 0.00 for the home team, p value = 0.04 for the
away team).

5. CONCLUSION
Significant differences in variables of this study can be attributed to the presence of fans,
although this is difficult to isolate and classify. It can be concluded that fans, namely the
audience and their interaction in stadiums contribute to the performance of the home team,
performance and decision-making of match referees.

LITERATURE:
1. Dilger, A., & Vischer, L. (2020). No home bias in ghost games.
2. Elferink-Gemser, M. T., Kannekens, R., Lyons, J., Tromp, Y., & Visscher, C. (2010).
Knowing what to do and doing it: Differences in self-assessed tactical skills of regional,
sub-elite, and elite youth field hockey players. Journal of sports sciences, 28(5), 521-528.
3. Fischer, K., & Haucap, J. (2020). Does crowd support drive the home advantage in
professional soccer? Evidence from German ghost games during the COVID-19 pandemic.
4. Inan, T. (2020). The effect of crowd support on home-field advantage: evidence from
european football. Annals of Applied Sport Science, 8(3), 0-0.
5. Jones, M. B. (2015). The home advantage in major league baseball. Perceptual & Motor
Skills, 121, 791–804.
6. Legaz-Arrese, A., Moliner-Urdiales, D., & Munguía-Izquierdo, D. (2013). Home advantage
and sports performance: evidence, causes and psychological implications. Universitas
Psychologica, 12(3), 933-943.
7. McCarrick, D., Bilalic, M., Neave, N., & Wolfson, S. (2020). Home Advantage during the
COVID-19 Pandemic in European football.
8. Murrell, A. J., & Dietz, B. (1992). Fan Support of Sport Teams: The Effect of a Common
Group Identity. Journal of Sport & Exercise Psychology, 14(1).
9. Pollard, R. & Pollard, G. (2005), ‘Home Advantage in Soccer: A Review of its Existence
and Causes’, International Journal of Soccer and Science 3(1), 28–38.
10. Tilp, M., & Thaller, S. (2020). Covid-19 has turned home-advantage into home-
disadvantage in the German soccer Bundesliga. Frontiers in sports and active living, 2, 165.
11. https://www.statista.com/statistics/207458/per-game-attendance-of-major-us-sports-
leagues/

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INVITED SESSION

Digital Intelligence: The Driving Force of the Digital Economy

and Innovation

Invited Session Editor:

Ljerka Luic, University North, Croatia

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IMPLICATIONS OF DIGITAL WORK ON EMPLOYEE

PRODUCTIVITY AND THEIR DIGITAL EMPATHY
Mia Haramija
University North, Croatia
miharamija@unin.hr

Zeljka Fruk
University North, Croatia
zefruk@unin.hr

ABSTRACT
Digital empathy is a concept that did not originate during the Covid-19 pandemic, but as such
existed several years ago and reached its peak during the Covid-19 pandemic, when millions
of people around the world communicated exclusively electronically. The purpose of this paper
is to determine the level of understanding other people when mutual communication takes place
on-line. Digital empathy is a new segment of the business world that needs to be continuously
built and developed. The aim of the research is to establish that electronic communication
affects the lack of empathy, which is primarily built through physical contact with verbal and
non-verbal communication. The extent to which frequent electronic communication affects
reduced productivity, coldness, and lack of empathy. Is the necessary business information
provided on time, to what extent is there a lack of face-to-face communication and did the
employees of the regional self-government cope with the feeling of loneliness and isolation?
Employees of the regional self-government who worked from home during the pandemic were
selected for the research sample. The research was conducted using the questionnaire method
in a way that explores the opinion of self-assessment of regional self-government employees
who worked from home, and related to their productivity, flexibility in working from home, and
digital empathy. Based on the results of the survey questionnaires, it was determined that
electronic communication affects reduced productivity, coldness and lack of empathy. This
paper provides an overview of the disadvantages of electronic communication, which is
impossible to avoid in the digital age. Building digital empathy is important in creating the
competencies of digital citizens and contributes to increasing digital intelligence. The pandemic
catalyzed the digitalization of society and the implications of digital empathy will be further
explored in future periods.
Keywords: Digital empathy, Digital work, Pandemic, Productivity

1. INTRODUCTION
The beginning of the COVID 19 pandemic brought changes in the labor market, both in the
world and in the Republic of Croatia. In order for employers to protect their workers and not
expose them to the possibility of contracting the new virus, digital work was introduced.
Counties, as units of regional self-government, were not excluded from making decisions to
perform daily work tasks from home. As the change in the performance of daily business
obligations affected employees, whether employees received all the necessary information on
time to perform their work are just some of the issues we are dealing with in the conducted
research. Along with intelligence and emotional intelligence, digital intelligence is becoming
an important aspect of scientific research. Because digital intelligence is a broad field, the
emphasis in this paper is on digital empathy and the implications of digital work on employee
productivity. According to Park (2019), the fourth industrial revolution we are currently in is
advancing artificial intelligence, automation and other digital innovations. What is empathy and
what is the concept of digital empathy?

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Empathy is „the ability to share others feelings and it entails both a cognitive and an emotional
/ affective component“ (Everhart, 2016). Technology brings changes in the way of
communication, but also in digital communication it is necessary to pay attention to empathy,
ie digital empathy. Digital empathy according to Friesem (2016), "seeks to expand the
traditional understandings about empathy phenomena into the digital arena". There are many
more definitions of digital empathy, and for the purposes of this paper, the definition from DQ
Global Standards Report 2019 that digital empathy will be used ”The concept of digital empathy
implies that an individual knows how his online interaction can affect other people's feelings
and recognize what the interaction of other participants is“, ( Park, 2019). It follows that face-
to-face communication immediately recognizes how the interlocutor feels and behaves through
verbal and nonverbal communication, while digital communication relies on an individual's
ability to show empathy for the interlocutor and recognize his feelings through online
communication. Prior to the COVID 19 pandemic, working from home was not so common,
but COVID 19 pandemic requires quick solutions and even faster system adjustments, in this
case rapid adaptation to a different forms of work. Data collected by the OECD show that
countries with comparable data had increased rates of teleworking during the COVID-19
pandemic. Recent research (Luić, Švelec-Juričić, Lasić Lazić, Šantalab, 2020) has shown how
important role school principals play in leading institutions, towards the digitalization of the
work process. Thus, regional self-government units had to adapt to the new way of working,
manage employees, achieve flexibility in work, increase motivation to work, and monitor how
working from home affects employee productivity. It is also necessary to define tasks in a
timely and clear manner. Motivation to work from home and flexibility depend on the available
working conditions, whether the employee has own work space or shares it with family
members, who also work from home, or children attending online classes, what technical
equipment they have, what is the Internet, has the employer provided an employee who does
not have all the necessary conditions with the opportunity to use an official computer? All this
was confirmed in the research (Škoda, Baksa, Luić, 2021) that teacher is the one who in online
learning must create materials for work, support and monitor student reactions, because there
is no part of direct communication in work at home. Previous research (Chung, Seo, Forbes,
Birkett, 2020) confirms this problem that employees do not like working from home because
of lack of interactive communication, lack of equipment or work space and the inability to
clearly set boundaries between business and private obligations, which raises the question of
how balance work from home, increase the productivity of this form of work, and reduce the
feeling of isolation of employees. The Labor Relation Agency lists a number of advantages and
disadvantages of working from home. Some of the benefits of digital work would not be
possible without the advancement of information technology. The possibility of saving on rent
is mentioned as an advantage, but it is also stated that not all jobs can be done from home, so it
is very important to know business processes. The transition to digital work during the
pandemic was sudden, especially in regional self-government units because they are primarily
designed to be accessible to all citizens residing in their area. A recent study (Niebuhr, Borle,
Börner-Zobel, Voelter-Mahlknecht, 2022) notes that due to the rapid process of transition to
work from home due to the pandemic, the technical equipment of many people's homes was
not sufficient to enable them to work efficiently and healthily. If the ratio of work from home
to work in the office increases in the future, technical equipment would need to be improved.
Working from home also affects the health of employees (Tavares, 2017) states that the most
common health problems when working from home are related to stress, increased work and
isolation or depression. The research question of this paper is to increase knowledge about the
circumstances of how working from home affects the productivity of employees in regional
self-government units, and do workers feel empathy during digital work?

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The aim of the paper was to determine how employees of regional self-government units felt
when working from home, whether they felt like they were at work, or did they were more
productive, whether they could separate working hours from private responsibilities, and
whether felt lonely and isolated while performing work duties. In accordance with all the above,
the following hypotheses have been set:
• H1: Working from home negatively affects employee emotions.
• H2: Working from home negatively affects employee productivity.

2. METHODOLOGY / MATERIAL AND METHOD

The research was conducted anonymously through a survey - google form, which was sent
electronically, in compliance with all relevant provisions of the GDPR to publicly available
electronic addresses of employees of all units of regional self-government in the Republic of
Croatia. A total of 1,000 e-mail addresses were available to which the survey was sent, while
138 employees of regional self-government units throughout the Republic of Croatia
volunteered to participate in this research. The survey was conducted in the period from April
18, 2022. - 24.04.2022. It contained 13 questions that included general demographic data on
respondents, gender, age, education, place of work, and specific questions related to the
research question.

3. RESULTS
All respondents - employees of regional self-government throughout the Republic of Croatia,
through a survey questionnaire - google form were asked 13 questions based on which the
results were processed as follows. The number of women in the share of respondents was 103
and 74.6%, while the number of men who participated in the study was 35 and 25.4%.
Furthermore, respondents had to answer the question of which age group they belong to, so in
the age group from 26 to 35 years participated 25 respondents or 18.1%, in the age group from
36 to 45 years participated 41 respondents, or 29.7 %, in the age group of 46 to 55 years
participated 41 respondents and 29.7%, in the age group of 56 to 65 years participated 29
respondents and 21%, while the study involved only two respondents over 65 years of age
whose the share in the total research mass is 1.4%. The study involved 13 respondents with
secondary education (9.4%), 13 respondents with higher education (9.45), 98 respondents with
higher education (71%), 10 respondents with a master's degree (7.25) and 4 respondents with a
doctorate (2.9%). The largest number of respondents who participated in the research were
employed in Istria, Varaždin and Koprivnica-Križevci counties. Among other things,
respondents answered the question of how often they worked from home during the Covid-19
pandemic, so 76 respondents, or 55.1%, answered that during the Covid-19 pandemic they
worked from home in shifts, ie combinatorics, in such a way that one one day working from
home and one day from the office or in a way that one week they worked from home and one
week from the office or some other combination. 60 respondents, or 43.5%, stated that they did
not work from home during the Covid-19 pandemic, while only two respondents, ie 1.4% of
respondents, worked from home during the entire duration of the Covid-19 pandemic. As this
paper determines whether digital work affects employee productivity and digital empathy, one
of the questions asked was "What do you think digital empathy is?" To the above question 113
respondents who participated in the survey, or 81.9% answered that for them digital empathy
is understanding the feelings of others when communication takes place electronically, while
25 respondents and 18.1% answered that for them digital empathy electronic communication
that takes place according to the standard principle. One of the questions asked to the
respondents who participated in the research was whether they had all the necessary computer
equipment to work from home, including the appropriate Internet connection. To this question,
17 respondents, or 15% said that their employer provided them with all the necessary equipment

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for work from home, 43 respondents, or 38.1% answered that the employer did not provide
them with all the necessary computer equipment for work from home, while 53 respondents, or
44.9%, answered that their employer provided them with only a part of computer equipment
for working from home while they used their own internet. Respondents were asked what they
missed most about digital work during the Covid-19 pandemic. To this question, 24
respondents, or 20.9%, answered that during work from home they mostly lacked computer
equipment and all other equipment needed to perform tasks within their scope, 50 respondents
or 43.5% of the total number of respondents answered that they most missed the conversation
with colleagues live, ie face to face, 35 respondents, ie 30.4% most missed the information
needed to do the job, seven respondents, or 6.1% most missed the appropriate high-speed
Internet connection, while none of the above was missing 31 respondents, or 27% of them.
When asked if they have a feeling when working from home that they are at work, 76
respondents, or 67.9% answered that they do not feel that they are at work while 36 respondents,
or 32.1% answered that they feel they are at work while working from home. When creating
the survey questionnaire, in addition to all the other questions mentioned above, we asked three
central research questions below as follows:
Respondents were asked if they felt the emotions of the interlocutor when using electronic
communication. As can be seen from Figure 1, 81 respondents do not feel emotions when using
electronic communication, while 51 respondents claim that they feel emotions when using
electronic communication.

70.00%

60.00%

50.00%

40.00%

30.00%

20.00%

10.00%

0.00%
NO YES

Figure 1: Percentage of respondents who feel or do not feel the emotions of the interlocutor
when using electronic communication
(Source: Authors research)

When asked what work from home represents for the respondents, and as can be seen from
Figure 2, 40 respondents answered that working from home is an advantage for them, 60
respondents answered that for them working from home is a disadvantage, while indecisive
were 32 respondents.

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50.00%

45.00%

40.00%

35.00%

30.00%

25.00%

20.00%

15.00%

10.00%

5.00%

0.00%
DISADVANTAGES ADVANTAGES

Figure 2: Statistics of respondents who believe that working from home is an advantage or
disadvantage
(Source: Authors research)

As can be seen from Figure 3., 94 respondents who participated in the survey answered that
they are more productive when working in the workplace while 19 respondents answered that
they are more productive when working from home.

80.00%

70.00%

60.00%

50.00%

40.00%

30.00%

20.00%

10.00%

0.00%
IN THE OFFICE FROM HOME

Figure 3: Percentage of respondents who are more productive when working in the office
compared to those working from home
(Source: Authors research)

4. DISSCUSION
In order to establish understanding of other people and self-assessment of their own attitudes
when communicating with each other electronically, and based on research conducted through
a questionnaire - Google form sent to e-mail addresses of all publicly available employees of
regional self-government throughout Croatia, research results confirmed that electronic
communications are affected by reduced productivity, coldness and lack of empathy.

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During the Covid-19 pandemic, when we had the feeling that the whole world had "stopped"
and when millions of people all around the world were employed in jobs that involve contact
with people, they lost their jobs, a certain percentage of people employed in public
administration tasks within its competence for the purpose of accessibility to citizens, by order
of the employer, continued to perform electronically. However, the main problems that arose
when working from home, ie during "on-line work" are the lack of face-to-face communication,
lack of emotion of the interlocutor's emotions and extremely reduced productivity. Starting
from the theory that "people are social beings who meet their needs in everyday communication
with other people", and that the most common way to meet social interactions is
communication, the logical question is whether electronic communication is to meet social
needs. feel emotions. Based on previous research on the perception of emotions through visual
and auditory channels, it has been found that "the ability to recognize emotions is considered a
major component of emotional competence because it is responsible for empathy and the ability
to interpret human reactions and predict subsequent reactions." Furthermore, in face-to-face
communication, emotions are primarily seen on the interlocutor's face, and to a lesser extent on
the body. When working from home, and in accordance with the scope of work within their
competence, employees of regional self-government mostly used e-mail correspondence, while
involvement in audiovisual platforms was rare, so based on this research it can be concluded
that respondents who participated in the research did not feel the emotions of the interlocutor
when working from home, that they felt lonely and isolated compared to the fact that most of
them lacked face-to-face communication during work from home. The next hypothesis we set
up relates to the issue of employee productivity of digital work during the Covid-19 pandemic.
The issue of work in general, among other important segments, should be considered through
employee productivity. In many developed countries, various institutions and companies invest
more in employee productivity than in capital expenditures. Unfortunately, this is not often the
case in Croatia, especially not in state administration bodies, bodies of local and regional self-
government units and other legal entities with public authorities, due to scarce budgetary
resources. The issue of productivity of employees of state administration bodies, local and
regional self-government units and legal entities with public authorities in the Croatian public
and media space is often questioned, emphasizing the reduced abilities of their employees and,
consequently, the issue of productivity. negative perceptions of public bodies in general. The
media review of their productivity gained an even greater dimension during the Covid-19
pandemic, when, as we mentioned earlier, thousands of people across Croatia lost their jobs. At
a time when the whole business process has moved from the office to the homes of employees,
it is very important to analyze their productivity, work orientation and sense of presence in the
workplace. 55% of respondents who participated in surveys during the Covid-19 pandemic
worked from home, either in shifts or combinatorially, working one day from home and one
day from the office, or working one week from home and one week from the office, which
indicates the fact that the regional self-government bodies did not have the necessary amount
of work space to provide epidemiological measures for all their employees, so employees
worked part of their working time from home, part from the office. Furthermore, when we talk
about work from home related to the public sector, we understand digital work and it is assumed
that the bodies of regional self-government units have provided their employees with all
necessary computer and IT equipment for work from home, but from the established results it
turns out that only 17 respondents had the equipment provided, while the rest of the employees
were provided by the employer with only part of the computer and IT equipment or did not
provide them with anything to work from home. Given that the majority of employees of
regional self-government units are people with a university degree, it is to be expected that they
have basic computer equipment for working from home, but the question is whether all
respondents who worked from home had an adequate high-speed Internet connection.

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In our survey questionnaire, only seven respondents pointed out that they lacked high-speed
internet connection when working from home, but if we take into account that 138 respondents
participated in the survey, we believe that the number of people that are working from home
during the Covid pandemic 19 significantly higher, and that it is possible that a larger number
of respondents had a problem working from home with a suitable high-speed Internet
connection, especially at a time when thousands of people were locked in four walls and spent
most of their free time online. Furthermore, when working from home, more than 67% of
respondents did not feel that they were working from home, so this is another issue that we can
draw in parallel with the issue of productivity when working from home. By getting ready for
work every day, traveling to and from work, completing specific job descriptions and a range
of other work-related activities, people gain a routine that is interrupted overnight during the
Covid-19 pandemic, but this routine apparently contributes productivity, given that 72% of
respondents said that they are more productive while working in the office and that they do not
feel at work when working from home. Given that the study involved 138 respondents out of a
total of just over a thousand potential respondents whose e-mail addresses are publicly available
on the websites of regional self-government units in the future it would be necessary to conduct
additional research in some other areas during the Covid-19 pandemic. from working in the
office started working from home.

5. CONCLUSION
With this research work conducted through a survey - google form on employees of regional
self-government in Republic of Croatia, we very easily came to the hypothesis, ie the realization
that digital work from home affects reduced empathy, employee productivity and coldness of
respondents. Furthermore, with this work, we covered a number of shortcomings of digital work
from home, which in the digital age, especially at the time of the pandemic, was impossible to
avoid. The pandemic has further catalyzed the digitalisation of society, and the implications of
digital empathy will be further explored in the coming future, especially for employees who
frequently work in office but they have to work from home in certain circumstances. Digital
work also needs to be regulated through a legal framework so that both employers and
employees can reap certain benefits from a such work. Some future research could focus more
on the pros and cons of working from home in other sectors such as banking, education or trade.
As digital work will be further developed in the future, it is good to recognize the stated
shortcomings of such work, and in the future to turn to investing in their elimination so that
there are no differences in work from home and office.

ACKNOWLEDGEMENT: Publications of this paper was supported by the University North

to which the authors express their gratitude for the support. The authors would like to express
their many thanks to professor Ljerka Luić, lecturer of the PhD course Methodological
Approaches in Researching Digital Intelligence in the Media and Communication Area for her
patience, enthusiasam and creativity and her ever-present kindness and support.

LITERATURE:
1. DQ Institute, DQ Global Standards Report 2019 Common Framework for Digital Literacy,
Skills and Readines, DQ Institute, (2019). Retrieved 01.05.2022. from
URL:https://www.dqinstitute.org/wp-content/uploads/2019/03/DQGlobalStandardsReport
2019.pdf
2. Luić, L., Švelec-Juričić, D., Lasić Lazić, J., Šantalab. M. (2020) Planning, managing and
leading the digital transformation of schools (ICERI2020 Proceedings / Gómez Chova, L.;
López Martínez, A. ; Candel Torres, I. - :IATED Academy, 2020, 7169-7175)

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3. Škoda, J., Baksa, T., Luić, L., (2021) Effective communication practices in digital
curriculum (INTED2021 Proceedings / Gómez Chova, L. ; López Martínez, A. ; Candel
Torres, I. - : IATED Academy, 2021, 5995-6002)
4. Chung, H., Seo, H., Forbes, S., Birkett, H.(2020) Working from home during the COVID-
19 lockdown: Changing preferences and the future of work. Kent Academic Repository.
Retrieved 25.04.2022. from https://kar.kent.ac.uk/83896/
5. Labour Relation Agency (2020) Employees working from home: Advantages and
disadvantages of employees working at home. Retrived 24.04.2022. from
https://www.nibusinessinfo.co.uk/content/advantages-and-disadvantages-employees-work
ing-home
6. OCED. (2021) Teleworking in the COVID-19Pandemic: Trends and Prospects. OECD:
Paris, France, 2021. Retrieved 25.04.2022. from https://www.oecd.org/coronavirus/policy-
responses/teleworking-in-the-covid-19-pandemic-trends-and-prospects-72a416b6/
7. Niebuhr, F., Borle, P., Börner-Zobel, F., Voelter-Mahlknecht, S. (2022) Healthy and Happy
Working from Home? Effects of Working from Home on Employee Health
andJobSatisfaction. Int. J. Environ. Res. Public Health, Volume 19, Issue 3 (February-1
2022) Retrived 24.04.2022. https://www.mdpi.com/1660-4601/19/3/1122/htm#B8-ijerph-
19-01122
8. Tavares, A.I. (2017) Telework and health effects review. Int. J. Healthc. 2017, 3, 30.
Retrieved 25.04.2022. from https://doi.org/10.5430/ijh.v3n2p30
9. Skupnjak, D. (2020). RJEŠAVANJE KONFLIKATA I VJEŠTINE ASERTIVNOSTI.
Varaždinski učitelj, 3 (3), 98-116. Preuzeto s https://hrcak.srce.hr/236779
10. Rezić, A. i Bonetti, A. (2021). Percepcija emocija putem vizualnog i auditivnog
kanala. Logopedija, 11 (2), 50-60. https://doi.org/10.31299/log.11.2.3
11. Everhart, R. S. (2016) Teaching tools to improve the development of empathy in service-
learning students. Journal of Higher Education Outreach and Engagement 20: 129–54,
Retrieved 27.5.2022. from https://openjournals.libs.uga.edu/jheoe/article/view/1281/1278
12. Friesem, E. (2016) Empathy for the digital age: using video production to enhance social,
emotional, and cognitive skills. In Tettegah, SY, Espelage, DL (eds) Emotions, Technology,
and Behaviors. London: Academic Press, 21–45. Retrieved 27.05.2022. from
http://mediaeducationlab.com/sites/mediaeducationlab.com/files/Friesem,%20Y.%20(201
6).%20Empathy%20for%20the%20digital%20age%20-%20Using%20%20video%20prod
uction%20to%20enhance%20%20social,%20emotional,%20and%20cognitive%20skills%
20(1).pdf

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THE ROLE OF PERSONAL DIGITAL COMPETITIVENESS IN THE

DIGITAL ECONOMY: ATTITUDES AND VALUES OF DOCTORAL
(PHD) STUDENTS
Darijo Klaric
University North, Croatia
daklaric@unin.hr

Josip Mandic
University North, Croatia
jomandic@unin.hr

ABSTRACT
Digital Intelligence (DQ) is a global standard model related to digital literacy, digital skills
and readiness for contemporary digital challenges. Furthermore, DQ is a set of capabilities
which acts as a key driver for digital competitiveness and digital economic growth. In this paper
the authors will research relationship between selected digital competencies and digital
competitiveness in digital economy. Digital economy is defined as a part of economic activity
that primarily derives from digital technologies with a special focus on advancing the business
model based on digital products or services. Such a business model is defined by the
hyperconnectivity among people, organisations and machines primarily through mobile
technology and the Internet of Things. In the digital economy, all business-to-business and
business-to-consumer stakeholders have their business interactions where and when they want,
according to their preference. The aim of this research paper is to examine the attitudes and
values related to a personal digital competitiveness within the target audience – doctoral (PhD)
students – who can play an active role in the further development and application of digital
competencies in digital economy and society. The perception of the DQ monetarization
possibilities (personal income, working conditions) in the market-digital competition, as well
as DQ capitalization possibilities in the so-called “social status” sphere, (quality of life and
reputation) are topics which determine the framework of the research problem. The research
will be conducted using a quantitative method through the collection of empirical data in the
form of a structured questionnaire with closed questions. The research results aim to indirectly
contribute to raising awareness of digital competitiveness and at the same time to directly
contribute to the harmonization of public educational policies aimed at enhancing the digital
competencies of both educators and students within the context of the current highly dynamic
digital economy development.
Keywords: Digital competitiveness, Digital economy, Digital intelligence, Socioeconomic
status

1. INTRODUCTION
The modern world is changing rapidly with the common denominator being digital
transformation. Game-changing digital innovations are becoming the “new normal”, as digital
economy (Tapscott, 1996) stakeholders need to swiftly adapt to timely identify and meet key
business to business (B2B) and business to customer (B2C) needs and expectations. The
emerging digital economy is aggressively shaping existing societies, business and operational
models but, at the same time, also introducing a new spectrum of opportunities and challenges.
Moreover, the digital economy is bringing novel digital tools and technological advances into
our lives, such as Artificial intelligence, Augmenting Human Intelligence, Deep Learning,
Internet of Things, Big Data Analytics, Robotics and Hyperconnectivity, just to mention some
of them.

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The processes of digital transformation are bolstered by the industrial to digital economy
transition demands, with data becoming the key resource (Luić, Alić, 2022). In the period from
2018 to 2025 the value of the data economy in the EU27 is expected to grow from €301 billion
to €829 billion, while the number of data professionals will rise from 5.7 million to 10.9 million.
In parallel, EU population with basic digital skills will increase from 57% to 65%, which will
be essential for adaptation to market changes and the estimated 60 million new jobs created,
worldwide, by AI and robotics until 2025 (European Council, Council of the European Union,
2022). According to the World Economic Forum (WEF), the combined value of the digital
transformation could generate upwards of $100 trillion over the next 10 years, with society set
to gain more than business (WEF, 2022.). Digital transformation is, therefore, becoming a key
factor in the labor market, which will differentiate winners from losers in society digital
transformation. Nevertheless, the key to digital transformation are still people. Accordingly,
this research focuses on digital competencies that develop and strengthen digital
competitiveness. The used model was developed by the DQ Institute and endorsed by the
Coalition for Digital Intelligence (DQ Institute, 2018). Just as the digital economy can be the
driving force behind a society, highly educated and digitally capable individuals can be a
driving force behind the digital economy. Digital Intelligence (DQ) represents critical skills
needed to thrive in the digital age. DQ is defined as “a comprehensive set of technical,
cognitive, meta-cognitive, and socio-emotional competencies that are grounded in universal
moral values and that enable individuals to face the challenges and harness the opportunities of
digital life.” (DQ Institute, 2018). One of the most operable terms of the modern economy is
competitiveness, which measures economic success by efficiency, economic growth and
development (Vurnek, Hodak, Bengez, 2019). During the digital transformation process one of
the key concepts is digital competitiveness (as shown in Figure 1), measured by the capacity
and readiness of economies to adopt and explore digital technologies as a key driver for
economic transformation in business, government and wider society. The digital economy is
defined as a part of economic output derived solely or primarily from digital technologies with
a business model based on digital goods or services. The basis of such an economy is the
hyperconnectivity of people, organizations and machines through the Internet and mobile
technology. On the other hand, the competitiveness of the national economy is the ability to
produce goods and services in free market conditions that will meet international requirements
and at the same time increase the personal income of citizens (Perkov, 2019). According to
Porter, one of the most important authors in the field of economic competitiveness, among the
main factors of production requirements are: knowledge (as the most important input resource)
and human resources - available labor force in its quantity and quality. Human and knowledge
resources have a critical role in creating a competitive advantage (Andrijanić, Pavlović, 2012).
Thus, in this paper we will study individuals' attitudes and values, especially of those who are
not only meant to be an object but also a proactive subject of digital transformation.
Accordingly, this research is focused on a specific population sample with the ability to identify
and develop oneself as a competent changemaker in the digital economy. The research is
measuring their digital competencies in the field of digital competitiveness and their
perceptions of the importance, role and position of digital competencies in the economic
domain. More precisely, the aim of the research is to examine the attitudes and values of the
PhD students in information and communication sciences at the University of Zagreb and the
University North.

Figure following on the next page

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Figure 1: Digital Competitiveness

(Source: DQ Institute, https://www.dqinstitute.org/)

2. METHODOLOGY
The research was conducted using the questionnaire method, from April 21 to April 28 2022,
with numerical analysis of obtained data. The survey was created using Google Forms. In the
introductory part of the survey, along with the identification of the researcher, the purpose and
goal of the research are presented. The survey contains 26 questions, three of which are
questions of sociodemographic structure (gender, age and years). The closed-ended questions
are a combination of multiple choice and questions composed on the principle of an interval
scale (Linkert scale) of assessment of attitudes of 5 degrees, where the value of 1 (one) is the
lowest value and the value of 5 (five) is the highest value. A link to survey was sent to targeted
PhD students at their official university e-mail addresses asking them to complete a
questionnaire. The PhD students filled out the questionnaire anonymously and on free will. In
accordance with the aim of the research, the following hypotheses were set and categorised for
better exploration at the social, personal and national level: Hypothesis H1: Personnel level –
Advanced digital competitiveness (as part of digital intelligence / DQ) provides better personal
income as well as better social reputation of individuals (socio-economic status/SES) in the
digital market competition. Hypothesis H2: Social level - Digital intelligence/DQ and digital
competitiveness are set of skills that are key factor for success in the digital economy.
Hypothesis H3: National level - The synergy of the education system and labour market needs
contributes to the development of the digital economy in Croatia. Within this hypothesis,
development factors for raising digital competitiveness were investigated.

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3. RESULTS

Figure 2: Age, sex and academic year determinants of the tested PhD students
(Source: Authors research)

Overall, 53 respondents (N = 53) participated in the survey, of which 38 were doctoral students
at the University North (71.1%) and 15 were doctoral students at the University of Zagreb
(28.3%). Most respondents are in the age groups 31-40 years (34%) and 41-50 years (32%).
Taking into account younger respondents who have a very high potential for further
development (20-30 years - 20.8%) and those who predominate with their accumulated
professional knowledge and skills (51-60 - 13.2%) we can deduce that survey representative
sample includes a good combination of knowledge, skills, experience and youth. Regarding the
responder's gender structure, women make up 75% of the respondents (as shown in Figure 2).
Based on the hypotheses and responders' answers, the results of the research are structured by
chapters. This structure presents the research results by levels that are most important for the
digital transformation of society as well as for the development of digital competitiveness in
the new economy.

3.1. Personal level – Assessment of personal digital competencies and digital

competitiveness as a factor of personal socio-economic success
In the research, the respondents have demonstrated significant coherence and supported a
common perception of responses and have been substantially positive regarding digital
competencies (as shown in Table 1). The interest and ability to assume the role of “a
changemaker” in digital economy by developing its own digital competencies (in local,
national and global community) has indicated certain indecisiveness regarding the interest (32%
neither agree nor disagree) and abilities (36,54% neither agree nor disagree).

DIGITAL COMPETITIVENESS MEAN MEDIAN MODE MAX MIN

Digital Changemaker Identity 3.1 3 3 1 5

Civic Use of Technology 3.5 4 4 1 5
Commercial and Community Cyber-Risk 3.0 3 3 1 5
Management
Organisational Cyber Security Management 2.9 3 3 1 5
Relationship Management 4.2 4 5 1 5
Public and Mass Communication 4.1 5 5 1 5
Data and AI Literacy 2.6 3 3 1 5
Participatory Rights Management 3.8 4 3 1 5
Table 1: PhD students ranking their digital competencies and digital competitiveness in the
digital economy using 1-5 Likert scale
(Source: Authors research)

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Likewise, the category of managing the cyber risk (35,8% neither agree nor disagree),
implementing cyber protection (41,5% neither agree nor disagree) and applying AI and
algorithmic tools (54,7% neither agree nor disagree) identifies the fact that the respondents are
indecisive. Furthermore, H1 hypothesis has been confirmed, meaning that personal digital
competitiveness (as part of digital intelligence/DQ) in market and digital competition enables
higher personal income, better working conditions, social status and individual status (socio-
economic status/SES). The respondents claim that personal digital competitiveness will enable
higher personal income and better working conditions on the digital economy market (in
elaborating this statement, 49,1% absolutely agree, and 39.6% agree) and that personal digital
competitiveness will enable better social status in digital society and better quality of life (in
elaborating this statement, 43,4% absolutely agree and 45,3% agree) (as shown in Figure 3).

6 Mean Median Mode Linear (Mean) Linear (Median) Linear (Mode)

0
Financial benefit Non-financial benefit
Mean 4.377 4.301
Median 4 4
Mode 5 4

Figure 3: The perception of the digital competitiveness financial and non-financial benefits
using 1-5 Likert scale (1 – no benefit; 5 – strong benefit)
(Source: Authors research)

3.2. Social level – DQ and digital competitiveness as a set of abilities crucial for economic
growth
H2 hypothesis has also been confirmed. It claims that digital intelligence (DQ) and digital
competitiveness are a set of abilities (knowledge and skills) that will be crucial for the success
in digital economy of next generation of business people, companies and processes (in
elaborating this statement, 54,7% absolutely agree and 37,7% agree, as shown in Figure 4)
and that qualified work force with developed digital intelligence is the most important factor
of digital economy development (in elaborating this statement, 50,9% absolutely agree and
34% agree). Besides, positive stances regarding digital intelligence are additionally
confirmed by the attitude that digital competitiveness and digital economy bring more
benefits than risks and dangers to future business and employment (in elaborating this
statement, 47,2% absolutely agree and 30,2% agree).

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100%
54.70%
80%

60%

40% 37.70%

20% 7.50%

0%
Neutral Agree Strongly agree

Figure 4: DQ and digital competitiveness are set of capabilities that will be crucial for the
success in digital economy
(Source: Authors research)

3.3. National level – Synergy of educational system with labour market in digital economy
and key factors of synergy
H3 hypothesis has also been confirmed. It claims that synergy of educational system with the
needs of labour market contributes to digital economy development in Croatia.

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

a. Public sector 2

Government 5

c. Regional and local municipalities 2

d. Privat sector 28

e. Educational and science system 8

f. Digital aware individuals 8

Figure 5: Potential for raising digital competitiveness in the digital economy by subjects,
(Source: Authors research)

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Synergy factors have been examined within this hypothesis, where the respondents expressed
their opinion that private sector unquestionably has the greatest potential of raising digital
competitiveness (52,8% of responders chose private sector as a first choice, as shown in Figure
5). However, the greatest potential of strengthening the cooperation between academia (the
university), industry and government, i.e. Triple Helix model of cooperation (as shown in
Figure 6) was found in the educational and scientific system (37,7% respondents) and the
Government (30,2% respondents). Also, in support of these statements, there is a very positive
elaboration of the stance that the alignment of educational system with the needs of the labour
market contributes to the development of digital economy in Croatia (in elaborating this
statement, 71,6% absolutely agree and 18,8% agree, as shown in Figure 7), and that education
and skills gaining in the field of digital intelligence contributes to the development of digital
economy in Croatia (in elaborating this statement, 67,9,% absolutely agree, and 26,4% agree).
Moreover, the respondents very positively perceive efforts and projects of the private entities
working on the development of new national digital strategies, such as Croatian Artificial
Intelligence association (CroAI) which advocates the development of national strategy for AI.
In other words, in the context of development of digital economy and digital competitiveness,
the respondents agree that Croatia is a small country with great opportunities, with companies
such as Infobip, Nanobit having a vision and ambition to develop digital economy in Croatia
(in elaborating the statement, 54,7% absolutely agree, and 32,1% agree).

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

a. Public Sector 2

b. Government 16

c. Regional and local municipalities 3

d. Privat sector 6

e. Educational and science system 20

f. Digital aware individuals 6

Figure 6: Potential for strengthening interactions between academia,

industry and government (Triple Helix model) to foster digital economy development
(Source: Authors research)

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80% 71.60%
70%
60%
50%
40%
30%
18.80%
20%
9.40%
10%
0% 0%
0%
Category 1

Strongly disagree Disagree Neutral Agree Strongly agree

Figure 7: Harmonization of educational system and labor market contributes to the

digital economy development
(Source: Authors research)

4. DISSCUSION
One of key prerequisites of digital transformation of the society and development of digital
economy is the knowledge of digital competencies and digital competitiveness – their
functions, roles and importance in targeted society and economy. Thus, the synergy of
educational system with the needs of labour market is crucial in the process of digitalisation of
the society and economy and, if properly implemented, can provide a catalytic effect. This
effect is possible because, in digital economy, knowledge and innovativeness are becoming the
main resource and driver of economic development, as well as indicators of competitiveness.
Competitiveness of national economy is key driver of social prosperity and growing welfare.
Business access to the latest digital technologies, synergies between digital and other key
technologies provides a network of digital innovation centers (Sunigovets, 2019). Therefore, it
is indicative that doctoral students of information and communication sciences believe that the
greatest potential for strengthening the cooperation between academia, industry and
government, which is critical for comprehensive digital transformation, lies within
educational-scientific system and central executive power. i.e. the Government of the
Republic of Croatia. Despite the current unenviable position (59. place) of Croatia at global
index of competitiveness (IMD World Competitiveness Ranking, 2021.), the respondents claim
that, in the context of development of digital economy and digital competitiveness, Croatia is a
small country with great opportunities. This is also in line with the official Croatia expectations
(National Development Strategy of the Republic of Croatia by 2030) to reach the EU mean in
Digital Economy and Society (DESI) Index by year 2030. The research provided very positive
stances towards the activities like those of Croatian Artificial association (CroAI), which pro-
actively and systematically advocate the development of national strategy for artificial
intelligence. Regarding to assessment of personal digital competencies and digital
competitiveness, research identifies the fact that the respondents are indecisive or uncertain in
certain area (the category of managing the cyber risk, implementing cyber protection, applying
AI/ algorithmic tools and interest/ability to assume the role of a “changemaker” in digital
economy), indicating the interpretation that certain digital competencies are in the initial phase
of development, i.e. that there is a significant room for improvement of digital competencies in
the Croatian society. To overcome these and similar challenges in academia setting, strategic
thinking is extremely important and requires the development of strategic plans (Švelec, Luić,
2021).

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On the other side, the best results are measured in categories: „Public and Mass
Communication“ and „Relationship Management“ where responders exhibit strong positive
attitude towards collaborative technology use that is ethical, purposeful, and principled to
engage in a productive discourse with their digital communities as well as for self-motivation
and a commitment to provide an inclusive culture that cultivates tolerance to one another and
teamwork towards building and growing positive communities online. Simultaneously, other
digital competencies are well accepted and the respondents' self-awareness of them and of their
own abilities are well developed. Besides, the research showed a positive perception that
personal digital competitiveness will enable higher personal income, better working
conditions, social status and status of individuals (socio-economic status). Those attitudes and
values, together with claims that digital intelligence (DQ) and digital competitiveness are a set
of abilities (knowledge and skills) which will be crucial for the success in digital economy of
next generation of business people, companies and processes and that qualified work force
with developed digital intelligence is the most important factor of digital economy
development - are a key driver for digital competitiveness. This is a tangible indicator of a pro-
DQ mindset in higher education population, i.e. PhD students in information and
communication sciences. It could be interpreted as a positive contribution of information and
communication sciences to digital economy and digital transformation of Croatia in general.

5. CONCLUSION
Apart from transforming traditional ways of doing business and creating new products, services
and business activities, digital economy increases productivity, profitability and digital
competitiveness of companies and significantly contributes to overall digital transformation of
the society. However, during the digital transformation of society, it is necessary to adapt and
synchronise personal stances and values with conditions and stakeholders in the digital
economy. Joint efforts of all actors can create a digital eco-system with positive impact on
development and dynamics of digital economy on B2C and B2B market. What is important in
digital economy with regard to digital competitiveness is the fact that digital innovations
create competitive advantage. In consonance with this, research showed that digital
competencies need to be further developed as a set of knowledge and skills – or as a capital of
DQ knowledge and skills – to contribute to digital transformation of society and development
of digital economy. When it comes to the future research, it could be productive to continue
this exploration as longitudinal research, in order to keep track of changes in this domain.
Summa summarum, the development of digital competitiveness and digital economy can have
a catalytic impact on the overall economy of Croatia and serve as a driver of economic growth
and new strategic investments. In this process, the important element is the improvement of
digital competencies of high-educated and motivated persons who have a pro-DQ mindset,
which has been evident in this paper. This approach will have a gamechanger character where
critical theses are neutralised, like the “paradox of natural wealth” thesis, explaining that
countries abounding in natural wealth are mostly characterised by poor economic development.
Digital transformation of the Croatian society and economy can change the above-mentioned
thesis in a radical, positive and irreversible way and thus unlock overall capabilities of the
Croatia.

ACKNOWLEDGEMENT: Publications of this paper was supported by the University North

to which the authors express their gratitude for the support. The authors would also like to
express their many thanks to professor Ljerka Luić, lecturer of the PhD course Methodological
Approaches in Researching Digital Intelligence in the Media and Communication Area for her
unwavering support.

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LITERATURE:
1. Andrijanić, I., Pavlović, D. (2012). Menadžment međunarodne trgovine. Zagreb: Visoka
poslovna škola Libertas.
2. DQ Institute. (2018). Retrieved 26.04.2022. from https://www.dqinstitute.org/what-is-dq/
3. European Council, Council of the European Union. A digital future for Europe. Retrieved
25.04.2022. from https://www.consilium.europa.eu/en/policies/a-digital-future-for-europe/
4. Horvat, Đ., Perkov, D., Trojak, N. (2019). Strategijsko upravljanje i konkurentnost u novoj
ekonomiji. Zagreb: Effectus.
5. IMD World Competitivenes Center. Retrieved 25.04.2022. from https://www.imd.org/
centers/world-competitiveness-center/rankings/world-digital-competitiveness/
6. Luić, L., Alić, M. (2022). The importance of developing students' digital skills for the digital
transformation of the curriculum. U: Gómez Chova, L., López Martínez, A. & Candel
Torres, I. (ur.) INTED2022 Proceedings doi:10.21125/inted.2022.1826.
7. Nacionalna razvojna strategija Republike Hrvatske do 2030. godine. Retrieved 25.04.2022.
from https://hrvatska2030.hr/
8. Sunigovets, O. (2019). Enterprise competitiveness in the digital economy. SHS Web of
Conferences 67, 0 (2019) https://doi.org/10.1051/shsconf /2019670401
9. Švelec-Juričić, D., Luić, L. (2021). The importance of information and data literacy of
leaders in a turbulent environment of digital business transformation. U: Misevic, P.,
Kontic, L. & Galovic, T. (ur.) Economic and Social Development (Book of Proceedings),
76th International Scientific Conference on Economic and Social Development
Development – "Building Resilient Society".
10. Tapscott, D. (1996). The Digital Economy: Promise and Peril in the Age of Networked
Intelligence. New York: McGraw-Hill.
11. Vurnek, D., Hodak, Z., Bengez, A., (2019). Konkurentnost gospodarstva Republike
Hrvatske. Obrazovanje za poduzetništvo VOL9 NR1.
12. World Economic Forum. Digital Transformation Initiative. Executive Summary. Retrieved
25.04.2022. from http://reports.weforum.org/digital-transformation

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DIFFERENTIATION OF DIGITAL PUBLIC RELATION TOOLS

ANALYSED FROM A DIGITAL LITERACY PERSPECTIVE
Manuela Pantaler
University North, Croatia
manuela.pantaler@unin.hr

ABSTRACT
The use of digital tools in both personal but also working life has become a daily reality and,
as regards the public relations aspect, it is necessary to explore whether the frequency with
which digital tools are used has an impact on the digital literacy of professionals. The purpose
of the work is to explore digital tools and to identify whether they enhance the digital literacy
of PR professionals, PR experts, and the aim of working to detect which digital tools
significantly improve public relations, viewed from a digital literacy perspective. The research
question on which this work is based, which determines its character, questions the frequency
with which public relations experts use digital tools and examines whether their use, has an
impact on the development of digital literacy. The survey was carried out in Croatia, using a
deliberate sample of public relations companies, selected on the basis of the number of
employees, geographical area and sector of activity, in order to understand which digital PR
tools are the most commonly used by PR professionals and whether, use of these tools is
correlated with their level of digital literacy. Following the data collected, a comparison of the
tools used by public relations companies was carried out and an analysis of the functionality
content of the most commonly used tools was carried out using a quantitative and qualitative
method. The Analytical Matrix specifies the frequency with which individual tools are used, as
well as their impact on development of the digital literacy. The commutation of results
concludes that the use of a specific set of PR tools has a direct impact on digital literacy if
professionals use them, and indirectly on the advancement of their digital intelligence, which
provides an incentive for further related research. To what extent and how the use of only one
digital tool facilitates the development of digital literacy of PR professionals in relation to the
use of other tools is one possible route to continue research.)
Keywords: Digital tools, Digital Literacy, Public Relations, PR experts

1. INTRODUCTION
Public relations have evolved throughout the years and we see increasing progress with the
introduction of digital tools that facilitate their use every day. In more developed countries,
many organisations use a variety of digital tools to be able to manage their reputation easily and
reach a favoured audience. Digital tools and technology have greatly improved the way in
which public relations are practised, and the live streaming of technologies has become fully
free of charge, while it had to be paid for transmissions in the past. It is not only the use of
digital tools that is crucial for the development of public relations, but many factors have an
impact on this. Some of the factors influencing development are: ways of doing business,
expertise, investment in education, technological inefficiencies, cost, corruption, government,
adoption of new media, etc. This paper will illustrate the impact of digital tools on developing
digital literacy among PR professionals, but above all, it is necessary to define what actually
public relations are. There are various definitions in this regard, but one of the most important
is perhaps the definition that public relations are ‘management of communication between an
organisation and its public’ (Grunig and Hunt (1984)) and a detailed definition of public
relations as a process/acquisition of public attitudes, delivery of action programmes and
communication of information to the public through channels/media, i.e. to gain public
acceptance and good will (Ikpe and Olise (2010)).

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All these definitions are not the most recent and can still be seen as seamless integration through
multiple channels, ensuring continuity in certain channels, all of which are responsible for
success. Therefore, public relations are not only the maintenance of mutually beneficial
relations between organisations and their public. Most global communication platforms are now
digital and mobile; such as, for example, videoconferencing, mailing, Twitter, Facebook,
Snapchat, LinkedIn, Pinterest, Skype, etc. It is essential for people dealing with public relations
to be able to communicate through multiple channels and in different ways in order to keep up
with time, and it is not enough to simply know how to communicate, but to know digitally. This
is why there is a need to develop digital literacy, which is crucial for every organisation dealing
with public relations today. Several ‘digital literacy’ can be identified, mainly from the pre-
digital era, but presented as a way to understand phenomena that have become more significant
or even transformed in the digital context.

2. DIGITAL LITERACY
In order to facilitate the understanding of digital literacy, several types have been defined from
the pre-digital era as an explanation of the phenomenon that is currently occurring. The need
for computer literacy has existed since the late 1960s and has been booked in three stages:
• The mastering phase (by mid 1980 ),
• The application phase (mid 1980 until late 1990) and
• Reflection phase (end of 1990 onwards) (Martin 2003).

Each of these three phases has been instrumental in raising awareness of the importance of
digital literacy, so it can be said that the interest, attitude and ability of individuals to properly
use digital technology and communication tools to access, manage, integrate and evaluate
information, build new knowledge and communicate with others to effectively participate in
society (van Joolingen, 2004). The development of digital literacy has also been greatly
influenced by the evolution of other forms of literacy, making the development of literacy
concepts more multi-layered and complex. In the United Kingdom, SCONUL was a key driver
in fostering digital literacy considerations in the UK; their ‘Seven pillars’ model for higher
education students identifies seven ‘main skills’ that form information literacy:
• Identification of the need for information;
• Identification of which information will meet the need;
• Develop strategies to locate information;
• Finding and accessing the requested information;
• Collating and evaluating information obtained from different sources;
• Organising, administering and communicating information;
• Synthesis and monitoring of the information.

As can be seen from the previous paragraphs, strong information is the most important thing to
master in the digital age. As everything around us is digital, if daily information are becoming
more and more, it is necessary to learn to make use of digital tools to maximise digital literacy.

2.1. Digital tools of public relations professionals

Over time, it could be observed that some skills in any job became the past and some new ones
took the lead. Leading to this opinion, more and more public relations professionals surveyed
have confirmed that, today, the development of analytical skills and knowledge of the digital
environment are precisely highlighted as one of the most important skills. Public relations have
changed dramatically over a dozen years as technology has evolved and will continue to evolve,
and it is therefore very important to keep pace with the technology.

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Of all digital tools existing and used by public relations experts, they can be classified in 5
categories:
1) Digital tools to improve public relations
2) Digital monitoring tools and reports
3) Digital tools to improve writing skills
4) Digital tools for visual editing
5) Digital search tools

2.1.1. Digital tools to improve public relations

Digital tools for improvement, just as the name tells them, serve exactly this. One of the most
well-known tools is Prezzy, Buffer and Hootsuite. These digital tools allow you to write press
posts directly from the tool into the database of your contacts, the ability to create a newsroom
for your company, make it possible to create a social media post schedule that will be published
on several platforms, to run all social networks directly in the app, to answer questions without
going to the platform, and to analyse the effects and many other benefits. This facilitates
communication with the media: instead of sending high-resolution documents and images or
large amounts of texts in e-mails, simply send a link to your story. Moreover, there is even an
option that gives journalists more than the press release itself. Indeed, facts about the company
and key people can be updated, and journalists can also search for past events.

2.1.2. Digital monitoring tools and reports

These digital tools are used to produce reports for public relations experts, who save the time
for developing and calculating important metrics and are also easy to use. First, all linkages of
articles mentioning the PR campaign are pasted within the tool and then purified (usually a
screenshot of the whole article) and transformed them into a visually beautiful report. There are
also tracking tools that search the internet and inform that your client or company is mentioned
within seconds of publication. They are accompanied by over 100 million sources, including
social networks such as Facebook, Twitter and Instagram. Analysis of campaigns is also
possible: within the report section, outreach and engagement data, analysis of sentiment and
main influencers written on a specific brand can be found. The help of these tools does not need
to ask for publications, but it is also possible to obtain a detailed PR analysis with a multitude
of graphs. Some of the most well-known digital tools are Mediatoolkit and CoverageBook.

2.1.3. Digital tools to improve writing skills

One of the most important performances of such digital tools is to single out long and complex
sentences and frequent errors in order to improve the readability of the text, advise you to use
shorter words when necessary and warn for words that weaken writing, provide a “second
opinion” on the text, check spelling because, in addition to repairing common mistakes,
correcting wrong oppositions, phrases and idioms, and even syntax. They are also used to
develop writing in all respects, especially nowadays, when people are increasingly reading and
have less developed vocabulary. The most famous digital tools are Hemingway Editor and
Grammarly.

2.1.4. Digital tools for visual editing

Two divisions between these tools are digital tools for editing graphics designs and video
editing tools. Digital video editing tools, e.g. Canva, offer a multitude of design options that go
beyond the creation of posts for social media, can be used to design e-books, brochures and
online event invitations. It is precisely with this tool and many others that it is no longer
necessary to wait for the designer to correct the ordinary typher, which saves the budget and
time.

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Digital tools used to edit videos are nowadays one of the most important tools, precisely because
social media posts, Instagram storyji, Snapchat, YouTube, etc., and even traditional websites
in a large number, post videos together with texts. However, despite growing demand, PR
experts remain quite sceptical when it comes to video publication. Before making the
customer’s video, it took hours, sometimes days, and required professional equipment, sound
effects and assembly. What Canva is for static images is now different, tools like Wave do for
video. In just a few minutes, you can install raw video material from your mobile phone, address
it in the app, select music and have a finished video. The stock can also be seen in the tool to
make the story/publication even better.

2.1.5. Digital search tools

There are really countless tools of this kind, but one of the best known are Buzzsumo and
Answer The Public. Their most important characteristics are that they are simple but powerful
tools that make it possible to search for popular topics online, while also pointing to blogs and
articles linked specifically to the topic, they also serve to draw inspiration from popular topics,
or when you want to find a popular angle of viewing your topic, allowing journalists who write
on the topic or companies similar to those on which the current publication is to be found, to
inspire SEOs, improve marketing content and even search advertising. The benefits of using
these tools are precisely that when they are blocked or when tasks and clients for PR
professionals are quite the same, they help to look at the same topic from a completely new
angle and thus create a different and more interesting job.

3. RESEARCH ON THE IMPACT OF DIGITAL TOOLS IN PUBLIC RELATIONS

EXPERTS AND IMPACT ON THE DEVELOPMENT OF DIGITAL LITERACY
The aim of the research is to identify which digital tools significantly improve public relations
viewed from a digital literacy perspective, and whether the frequency with which they are used
has an impact on the development of digital literacy. The survey was carried out within 3
agencies whose primary activity is public relations for a total sample of 30 respondents, of
which 60 % are women 40 % of men aged 30-60. For the purpose of the survey, a self-
constructed online survey questionnaire was used and the average time to fill in the survey was
10 minutes. Among other criteria, respondents had to make a self-assessment of how the use of
digital tools affects their development of digital literacy. The scale according to which
respondents gave answers on the use criteria ranged from 1 (not relevant) to 5 (extremely
important) and the frequency of use of the scales 1 to 5:
• 1 — never,
• 2 — almost never,
• 3 — sometimes,
• 4 — frequently,
• 5 — most of the time.

The online survey was divided into 5 areas, each of which had 4 questions, with a total of 20
closed questions and one open question on the self-assessment of the use of digital tools from
the perspective of developing digital literacy. The results of the survey are reported using a
table for each type of digital tool according to certain criteria, and the frequency with which
they are used. It can be seen from the table that the most important criterion when selecting
tools is the ease of use of the tool and the price is the least important item. The frequency of
use is highest for digital tools to improve writing, visual editing and search skills. It is precisely
from the results of the survey that it is most important for PR professionals how they do work
in terms of communication and outreach to their desired audience.

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According to the replies, 86.67 % of respondents gave a positive opinion that the frequent use
of digital tools has a direct impact on improving their digital literacy.

Ease of Price Language of the Frequency of

use tool use
1. Digital tools to improve public 4 3,5 4 3
relations
2. Digital monitoring tools and 4 2,5 4 4
reports
3. Digital tools to improve writing 3 3,5 3 5
skills
4. Digital tools for visual editing 5 3,5 3,2 5

5. Digital search tools 2,5 2,7 4 5

Average 3,7 3,14 3,64 4,4
Table 1: Criteria and frequency of use of digital tools
(Source:Authors research)

According to the results presented in the table, many things related to the use of digital tools as
well as the criteria relating to them can be concluded. User-friendliness is the most important
item in visual editing tools, and at least important for tools to improve writing skills. Price as a
criterion is free of excessive deviations, only the least relevant for monitoring tools and reports,
so it can be concluded that the reliability and accuracy of such tools is the most important for
respondents. The language used by public relations experts to communicate with tools is the
least relevant for visual editing tools. Each tool has some criteria that are more relevant for use
and less relevant for use. Digital tools to improve public relations do not vary too much in all
criteria, while for monitoring tools and reports, the lowest of these is the price and price is the
most important criterion in the case of better writing tools. Digital visual editing tools have a
wide range of criteria, and the most important is that they are user-friendly and the least
important is the language of communication. Ease of use and language of communication are
almost equally important for search tools, while price and not so important.

4. CONCLUSION
Nowadays, when we all live in the virtual world, and when everyone around us is digital and
public relations professionals have had to adapt and keep up to date. Nowadays everything that
could have been done in a certain way is no longer seen as an advanced knowledge that could
compete on the market. All knowledge and skills have reached new levels over the past few
years and all possible ways need to be navigated. It is for PR professionals that things have
changed at an unprecedented pace. The world works differently than it was in 20 years ago.
The emergence and large-scale use of media, and social media in particular, had to develop new
skills and new knowledge. The use of ICTs and thus the development of digital literacy are
increasingly appreciated, and this is achieved through the use of digital tools. Digital tools have
countless and need to know when, what and how to use. This article describes five sets of tools
that serve public relations experts. Each of these groups serves something and there is no one-
size-fits-all tool, but requires knowledge of several tools to be able to perform the best and
better quality work, i.e. communication. Research carried out among different public relations
companies shows that none of the above-mentioned sets of tools are available that they do not
use. Absolutely every group is used on a daily basis and, as the respondents themselves have
stated, each of the tools helps to develop digital literacy, which is essential today.

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One of the biggest misconceptions is that the development of digital literacy has started
recently, on the contrary, development started more than 40 years ago and there is no indication
of an end. At a time when the Internet is ubiquitous and people increasingly spend time to
explore and learn in a virtual environment, digital literacy needs to be developed and improved.
The use of digital tools, in particular to improve writing and search, has a direct impact on the
development of digital literacy, while all others have a major impact on the development of
digital intelligence and navigating in a virtual environment.

ACKNOWLEDGEMENT: Publications of this paper was supported by the University North

to which the authors express their gratitude for the support. The authors would also like to
express their many thanks to professor Ljerka Luić, lecturer of the PhD course Methodological
Approaches in Researching Digital Intelligence in the Media and Communication Area for her
unwavering support.

LITERATURE:
1. Grunig James, E. (1992). Excellence in Public Relation and Communication Management.
Hillsdale, MI: Lawrence Erlbaum.
2. Ikpe, E. H., & Olise, F. P. (2010). The era of new media technologies and the challenges of
media relations practice in Nigeria. Journal of Communication, 1(2), 59-68.
3. Martin, A., & Grudziecki, J. (2006). DigEuLit: Concepts and tools for digital literacy
development. Innovation in teaching and learning in information and computer sciences,
5(4), 249-267.
4. van Joolingen, W. (2004). Roles of modeling in inquiry learning. In IEEE International
Conference on Advanced Learning Technologies, 2004. Proceedings. (pp. 1096-1097).
5. Martin, A., & Grudziecki, J. (2006). DigEuLit: Concepts and tools for digital literacy
development. Innovation in teaching and learning in information and computer sciences,
5(4), 249-267.
6. Ayankojo, K. (2001). Expanding the frontiers of public relations through the internet. Oso,
L. and Ayankojo, K.(2001). Basic public relations. Abeokuta. Gbenga Gbesan and
Associates.
7. Verhoeven, P., Tench, R., Zerfass, A., Moreno, A., & Verčič, D. (2012). How European PR
practitioners handle digital and social media. Public Relations Review, 38(1), 162-164.
8. Fang, F., Wei, W., & Huang, H. (2019). Keeping up with fast-paced industry changes—
Digital media education in US advertising and PR programs. Journal of Advertising
Education, 23(2), 80-99.

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THE IMPORTANCE OF HARMONIZATION OF EDUCATIONAL

PROGRAMS IN DIGITAL TRANSFORMATION
Kristina Milaj
University North, Croatia
krmilaj@unin.hr

Tea Stepan
University North, Croatia
testepan@unin.hr

ABSTRACT
Digital transformation is the process of integrating digital technologies into human action and
continuous adaptation for its intelligent use. The subject of this paper is a comparison of the
teacher study syllabus that prepares masters of primary education for the education of primary
school students and a curriculum according to which teaching is conducted in primary schools.
The goal is to determine whether student learning outcomes from the faculty are consistent with
student learning outcomes in primary schools and whether the students of teacher education
are trained for education according to the societal requirements. Comparison of the syllabus
of the Integrated undergraduate and graduate university teacher study of the Faculty of
Teacher Education, University of Zagreb and the Curriculum of the cross-curricular topic The
Use of Information and Communication Technology for primary and secondary schools was
carried out by the desk method. The mentioned syllabuses were selected for sampling because
the majority of students on teachers’ faculties are educated at the mentioned faculty in Croatia.
The aforementioned curriculum has the outcomes that in all teaching subjects determine the
activities that encourage responsible, efficient and creative use of information and
communication technologies. Based on the results, the differences between syllabus and
curricula have been determined, by which it is possible to elaborate strategies for development
of teacher education syllabus that will be more harmonized with primary school curricula and
digital transformation needs. This paper provides an innovative approach in researching the
differences between programs of different education levels, but also points to a key subject of
public policy and harmonization of educational programs that prepare non-IT professionals
while opening up space for further complementary research that would determine the level of
digital competencies of students at the end of their studies.
Keywords: Digital competencies, Digital transformation, Formal education, Harmonization

1. INTRODUCTION
The omnipresence of digital technologies has changed the human behaviour throughout all
aspects of life. Digitalization of health services, construction industry, judiciary and numerous
other areas has similarly imposed entirely new demands in private lives of individuals. Due to
the changes these have caused in terms of data collection methods, the digitalization has also
affected human thought patterns and behaviour, subsequently also influencing organisation of
life, life priorities and communication in general. The key resource for those and similar
processes, which are primarily encouraged by the requirements of transition from traditional to
digital economy, are the data, which have developed and altered the digital business models
and business practices, even affecting formation of markets where the offer and demand are
virtually connected, which is why some of the biggest companies of our time, often those
engaged in rental business, transportation or trade, possess literally no property, cars or
inventory (Alić, Luić, 2022).

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The rate of changes occurring nowadays, namely those caused by such an overwhelming
integration of digital technologies, is hardly comparable to any other rate of change in the
society ever before. All, without any exception, are challenged to adapt to such new living
conditions, not just the ones who have already chosen their careers in ICT, but also those who
will choose them in the future. Part of defining the concept of digital transformation, the
purpose of which is to enhance productivity and creativity by exploiting IoT technology
(Internet of Things), Big Data technology, blockchain technology, 3D-print (additive
production), robotics, artificial intelligence (AI) and alike, is grounded precisely on the
adaptation to such digitalized environment for the purpose of enhancing competitiveness. The
digitally transformed society is a competent society, a society that has adjusted and is capable
of continuously adapting to the everchanging conditions, aimed at intelligent use of digital
technology. When defining digital competencies, it is primarily required to notice the
implementation of basic terms used to describe them, within a wider array of human activity.
Thus, the knowledge, skills and attitudes required to use digital technologies will shape the
digital competency of an individual to the extent when it shall include abilities and values
required for ethics and autonomy in communication and information management. This being
said, the knowledge implies having expertise in operating various computer applications,
internet and technologies, skills indicate skilfulness in the virtual realm, while attitudes define
shrewdness in evaluating content. The responsibility and obligation of the educational system
in developing social literacy skills therefore evolved into its crucial obligation in terms of
developing digital literacy. Students of today, so-called digital natives – the younger
generations born in the digital age are those inherently prone to skilfully using digital
technology, but it is still required to deliberate on whether they are actually using digital
technology creatively and safely. Besides, it is also important to reflect on the school principals
and teachers who play an exceptionally important role in the implementation of purposeful
education – the principals do this as leaders of the school team (the collective) during digital
transformation of the school as an organization (Švelec-Juričić, Luić, 2021), whereas teachers
do this as the role models closest to students and as specialists in the teaching process, in which
they directly influence the evolution of students’ competencies. The teaching staff therefore
needs to be prepared in due time for the transformation because the teachers, as well as the
principals, may widely be labelled as digital immigrants – those who have mastered using
computers and other digital appliances in their adult age, thus being prone to resist substantial
changes, as resistance is precisely the biggest challenge for digital transformation (Savić, 2019).
The differences between digital natives and digital immigrants may be circumvented by
designing and elaborating strategies based on recognizing factors that either directly or
indirectly influence digital fluency of them both, and which can be described as the ability to
upgrade knowledge and produce information with the purpose of creative and appropriate
expression in the digital environment (Wang, Myers, Sundaram, 2013). In that sense, the digital
transformation in formal education needs to be deep-rooted in the systematic approach of the
school itself, of the founder, of the Ministry of Science and Education, of the Education and
Teacher Training Agency and of other relevant institutions, so as not to rely on the commitment
of an individual teacher-enthusiast (Luić, 2018). Formal education is conducted at the
accredited educational institutions. By completing formal education, certificates and diplomas
are acquired, and the acquirer of such a public document issued by an authorised legal entity is
considered to be qualified according to the curriculum pursuant to which such formal education
is conducted upon, and which had previously been approved by the competent body. The
Ministry of Science and Education, acting as the body in charge of formal education in the
Republic of Croatia, has been frontally conducting the curricular reform in the Republic of
Croatia since the academic year 2019/2020, namely for the 1st, 5th and 7th grades, and it shall
do the same for all other grades in primary school as of academic year 2021/2022.

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The curricular reform is certainly one of the primary measures referred to in the Strategy for
Education, Science and Technology, which was designed in compliance with the European
educational standards and adopted by the Croatian Parliament in 2014. The reform’s main
purpose is to establish a more harmonized and more efficient educational system, which
encourages development of students’ functional literacies and generic competencies required
for living and working in the 21st century, promotes relating education to students’ life
experiences, needs, interests and abilities, but also to the requirements of the society and
economy, in which teachers need broader autonomy in choosing content, methods and type or
work, all with the purpose of applying teaching methods that empower a more energetic role of
students, based on clearly defined outcomes that are not focused solely on development of
cognitive abilities, but also on development of attitudes, skills, innovation, critical thinking and
alike, all this alongside evaluation as part of the learning process. Subject-matter curriculum
and cross-curricular topic curriculum, pursuant to which classes are conducted since the
introduction of the reform in primary and secondary schools, set the purpose and goals of
learning and teaching, the structure in the overall educational-vertical segment, educational
outcomes with elaboration and description of levels in mastering outcomes and valuation
modalities. Cross-curricular topics are conceptualised in a such way in order to link educational
fields and subject-matter topics of all curricular subjects; they define competencies mastered
throughout education, but they are not related to the subject itself, as they instead focus on life-
long learning. Seven cross-curricular topics are defined: Personal and Social Development,
Learning to Learn, Civic Education, Health, Entrepreneurship, Sustainable Development and
cross-curricular subject that defines the learning outcomes focused on development of digital
competencies – Use of Information and Communication Technology. Pursuant to the Act on
Scientific Activity and Higher Education, the studies in the Republic of Croatia are conducted
according to the study programme and the syllabus, adopted by the institution of higher
education. The syllabus designates teachers and associates, i.e. the teaching staff, as well as the
teaching venue, class schedules, types of classes, format of final exams and exam schedules,
required literature for mastering a particular curriculum and for exam taking, option to perform
classes in foreign language and other important details related to conducting classes. This
research paper is based upon presumption that students development of digital competencies is
directly correlated to digital competencies attained by teachers, on the basis of which the
framework of research regulates the issue of the extent to which the development of students’
digital competencies (being requirements for methodical stimulation of developing students’
digital competencies) is planned throughout the syllabus during the studies. Based on the issue
at hand, a hypothesis presents itself, suggesting that the syllabi pursuant to which classes are
conducted within the module (in programme 903) at the Faculty of Teacher Education of the
University of Zagreb are insufficiently harmonised with the cross-curricular topic entitled the
Use of Information and Communication Technology for primary and secondary schools,
according to which teaching is conducted at primary schools.

2. METHODOLOGY
The research was conducted by content analysis, in which the cluster-sample method was used
to choose syllabi for teacher education with modules used at the Faculty of Teacher Education,
University of Zagreb (programme 903) and part of the curriculum of cross-curricular topic
entitled the Use of Information and Communication Technology for primary and secondary
schools, namely the part referring to primary school (1st, 2nd and 3rd cycle, up to page 41). The
analysis includes syllabi as follows: syllabi of core subjects in all modules (Core), syllabi of the
Croatian Language module (Cro), syllabi of the Information Technology module (Inf), syllabi
of the Arts module (Art) and syllabi of the Educational Sciences module (Edu).

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The selected syllabi were downloaded from the website of the Faculty of Teacher Education of
the University of Zagreb, while the curriculum of the cross-curricular topic entitled the Use of
“Information and Communication Technology for Primary and Secondary Schools” was
downloaded from the website of the Ministry of Science and Education. The former mentioned
syllabi were chosen according to the criterium of syllabi analysis used to teach and educate the
highest number of students at teacher education faculties in the Republic of Croatia, whereas
the latter-mentioned curriculum was used due to its focus on life-long learning in the field of
digital competencies. The analysis includes part of the curriculum referring to primary school,
due to the fact that the Teacher education faculty, whose syllabi were chosen for the sample, is
the venue where teachers teaching at primary schools are educated. The units of analysis within
this analysis of content (the text) within the desk method, are in fact the learning outcomes,
which describe what the participant – pupil, i.e. student will know, understand or be able to do
after learning, as well as the descriptions or subject content and vital content within the
curricula, which additionally emphasises specific knowledge, skills and attitudes, the
development of which needs to be encouraged when achieving the desired outcomes. Due to
the complexity of categorization criteria of the units of content, which resulted in the division
among four categories, and due to the intention of conducting analysis as precisely as possible,
the goals of the subjects in the syllabi and goals of the cross-curricular topic in the analysed
curriculum were excluded, owing to their lack of comparability. Goals of the subjects described
in the syllabus refer to concrete goals of a particular subject, teaching of which is conducted
within the shortest time period (semester), and the goals of the cross-curricular topic described
in the curricular document refer to educational goals of learning and teaching of the cross-
curricular topic, which are sought to be achieved from the start of primary school until
completion of the secondary school. The analytical matrix was constructed based on the words
and linguistic syntagms in their capacity as units of content. The words and linguistic syntagms
are classified in subordinate categories according to analytic criteria, which enable
identification of crucial features of the content and derive from the domain of curriculum of
cross-curricular topic entitled the Use of Information and Communication Technology for
primary and secondary schools, and which are also harmonized with the DQ 24 framework, as
part of the Global standard for digital literacy, digital skills and digital readiness of the DQ
Institute.

Example of categorizing:
• Category: Research and critical evaluation in digital environment
• Word/linguistic syntagm: information management, data protection, critical evaluation

When identifying key words and linguistic syntagms that are harmonized with the DQ 24
framework, i.e. the meaning of which is crucial in the digital transformation, approximately 200
words and linguistic syntagms were found. However, due to the lack of identified words and
linguistic syntagms in the teacher studies’ curricula and syllabi, the words were omitted from
the research. The remaining words and linguistic syntagms found in the curricula and syllabi
were grouped according to their similar meaning.

Figure following on the next page

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Figure 1: Structure of cross-curricular topic Use of Information and Communication

Technology for primary and secondary schools with basic competencies
(Source: https://mzo.gov.hr/istaknute-teme/odgoj-i-obrazovanje/nacionalni-
kurikulum/medjupredmetne-teme/kurikulum-medjupredmetne-teme-uporaba-informacijske-i-
komunikacijske-tehnologije-za-osnovne-i-srednje-skole/3854, adaptation by the authors)

Figure 2: Framework DQ 24
(Source: https://www.dqinstitute.org/global-standards/#contentblock1)

3. RESULTS
The following results are derived from the research conducted on the sample: in the chosen part
of the curriculum of the cross-curricular topic entitled the Use of Information and
Communication Technology for primary and secondary schools, the total number of appearance
of units of content was 193. The biggest number of repetition of units of content was detected
in the syllabi of subjects of module Informatics (42), whereby the harmonization, i.e.
overlapping of this syllabus with the chosen curriculum amounted to 21, 76 %.

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In other syllabi, the total number of repetition of units of content did not exceed 13: in the
syllabi of subjects that are core to all modules, the harmonization amounted to 6,74 %; in the
syllabi of subjects of the module Croatian Language, it amounted to 5,18 %; in the syllabi of
subjects of the module Art, the harmonization amounted to 0,52 %; in the syllabi of subjects of
the module Educational Sciences, the harmonization amounted to 2,07 %.

Percentage of
Sample Appearance
Harmonisation
Curriculum of the cross-curricular topic Use of Information
and Communication Technology for primary and secondary 193
schools -
Syllabi of the subjects that are core for all modules (Core) 13 6,74 %
Syllabi of the subject Croatian Language module (Cro) 10 5,18 %
Syllabi of the subject Information Technology module (Inf) 42 21,76 %
Syllabi of the subject Arts module (Art) 1 0,52 %
Syllabus of the Educational Sciences module (Edu) 4 2,07 %
Table 1: Total number of appearance of units of content with the percentage of harmonization
according to syllabi
(Source: Authors research)

3.1. The category entitled Functional and Responsible Use of ICT

According to the results shown in Table 2, the conclusion is that within 4 groups of linguistic
syntagms terminologically related to digital and technological literacy, i.e. units of content
(digital technology, responsible use of technology, digital environment, digital appliances,
operative system and computer software), the total of 96 appearances of individual units of
content were detected in the curriculum of cross-curricular topic entitled the Use of Information
and Communication Technology for primary and secondary schools. The aforementioned
linguistic syntagms have appeared 3 times in the syllabi of the subjects that are core to all
modules; they appeared 30 times in the syllabi of subjects of the module Informatics; they
appeared once in the syllabi of subjects of the module Educational Sciences; whereas in the
remaining syllabi, i.e. the syllabi of subjects of the module Croatian Language and the syllabi
of subjects of the module Arts, the mentioned linguistic syntagms have not appeared at all.

Category Word/linguistic syntagm Curr. Core Cro Inf Art Edu

digital technologies 15 1 0 7 0 0
responsible use of technology 9 1 0 7 0 0
Functional and digital environment 56 0 0 2 0 0
Responsible Use of ICT digital appliances, operative
system and computer software 16 1 0 14 1 1
SUM 96 3 0 30 1 1
Table 2: Matrix of category Functional and Responsible Use of ICT
(Source: Authors research)

3.2. Category Research and Critical Evaluation in Digital Environment

By analysing results shown in the Table 3, a conclusion can be drawn that units of content,
words and linguistic syntagms linked to critical evaluation and IT literacy (information
management, data protection and critical evaluation) do not appear at all in the syllabi of the
subjects of module Arts, they appear once in the syllabi of the subjects that are core for all other

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modules, they appear 3 times in the syllabi of subjects of the Educational Sciences module, 4
times in the syllabi of subjects of the module Croatian Language and 6 times in the syllabi of
subjects of the module Informatics.

Category Word/linguistic syntagmCurr. Core Cro Inf Art Edu

information management 13 0 0 0 0 0
Research and Critical
data protection 7 0 0 5 0 0
Evaluation in Digital
Environment critical evaluation 3 1 4 1 0 3
SUM 23 1 4 6 0 3
Table 3: Matrix of category Research and Critical Evaluation in Digital Environment
(Source: Authors research)

3.3. Category Communication and Cooperation in Digital Environment

In the curriculum of the cross-curricular topic the Use of Information and Communication
Technology for primary and secondary schools 17 units of content (cooperative learning in
digital environment, social networks) were found, as outlined in Table 4. In the syllabi of
subjects that are core to all modules, the mentioned units of content have appeared 3 times,
whereas in the syllabi of subjects of the module Croatian Language, Educational Sciences and
Arts, the mentioned units of content have not appeared at all.

Category Word/linguistic syntagm Curr. Core Cro Inf Art Edu

cooperative learning in
Communication and digital environment 6 2 0 0 0 0
Cooperation in Digital
social networks 11 1 0 1 0 0
Environment
SUM 17 3 0 1 0 0
Table 4: Matrix of category Communication and Cooperation in Digital Environment
(Source: Authors research)

3.4. Category Creativity and Innovation in Digital Environment

In the table for matrix of category Creativity and Innovation in Digital Environment, it is
evident that the singled-out units of content (creative activity, multimedia content design,
innovative action and proprietary protection) have appeared 57 times in the curriculum of cross-
curricular topic The Use of Information and Communication Technology for primary and
secondary schools. On the other hand, they appeared 6 times in the syllabi of the subjects that
are core for all modules and in the syllabi of the subjects of the module Croatian Language, i.e.
5 times in the syllabi of the subjects module Informatics, whereas a complete lack of units of
content may be observed in the syllabi of subjects module of Educational Sciences and Arts.

Category Word/ linguistic syntagm Curr. Core Cro Inf Art Edu
creative action 19 1 0 2 0 0
multimedia content design 27 5 6 3 0 0
Creativity and Innovation in
Digital Environment innovative action and
proprietary protection 11 0 0 0 0 0
SUM 57 6 6 5 0 0
Table 5: Matrix of category Creativity and Innovation in Digital Environment
(Source: Authors research)

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4. DISCUSSION
Based on conducted analysis of the research results, the hypothesis of the research has been
confirmed, by establishing that the syllabi according to which classes are conducted within the
module (in the programme -903) at the Faculty of Teacher Education University of Zagreb are
insufficiently harmonised with the curriculum of cross-curricular topic entitled Use of
Information and Communication Technology for primary and secondary schools, pursuant to
which classes at the primary schools are conducted. Lack of harmonisation of the syllabi in
relation to the curriculum is evident in Table 1, which shows the total number of appearances
of a certain unit of content (words and linguistic syntagms) in a specific part of the sample (in
the curriculum, i.e. a particular syllabus). The same table also shows the differences between
various syllabi. The syllabi of the subject module Informatics stand out as the syllabi more
harmonised with the curriculum, in comparison to other syllabi. This specific feature in the
result may be explained by studying the focus of the subjects Informatics module toward
developing digital competencies in students. It is important to mention that if other units of
content in the syllabi of the Informatics module would be used, the analysis could lead to a
different result, more favourable for the Informatics module. Furthermore, it is valuable to
propose for the syllabi of the subject Informatics to conduct qualitative research, in which units
of analysis would be valued according to predeterminate criteria. From the illustrated structure
of the cross-curricular topic entitled Use of Information and Communication Technology for
primary and secondary schools with core competencies (Figure 1), the link and mutual
interconnection of the domains may be observed, which results in complexity of categorisation
within this analysis. The interconnection of categories may be best observed in the practical
examples of linguistic syntagms, such as “data protection” and “proprietary protection”, and be
described upon practical examples. For instance, at a lesson from the subject of Nature and
Society in the 2nd grade of primary school, the lesson unit which aims at stirring students to
deliberate on responsible conduct of people toward themselves and nature, the students may be
familiarized with notion of personal data and provided with rules and advice on how to protect
them. Related to this, the students will be encouraged, on the other hand, during realization of
another lesson unit in the class of Croatian Language in the 5th grade, to creatively express
themselves, motivated by experiences from the preceding lesson when they got to know a
literary work of an author, as well as the author’s name and surname, to mandatorily cite in
each school paper the author’s name, alongside with the explanation of how important it is to
protect author’s copyrights. The degree of difficulty in categorisation therefore points to the
possibility of differently interpreting results in case of re-categorising units of content.

4.1. Category of Functional and Responsible Use of ICT

In the category Functional and Responsible Use of ICT, 4 of the most important linguistic
syntagms stand out, which is by 1, i.e. by 2 words/linguistic syntagms more than in other
comparable categories, and all this because the category is derived from the domain of the
curriculum which encompasses the widest area, so the biggest number of relevant terms was
found therein. The highest appearance of units of content in the curriculum was detected under
the linguistic syntagm “digital environment”, in which the linguistic syntagm “virtual
environment” is integrated in. The cited linguistic syntagm in the curriculum is most often
mentioned in the sense of familiarity with the rules for responsible and safe work in digital
environment, but it may also be found in the sense of individual choice of digital environment
for personal growth and learning.

4.2. Category Research and Critical Evaluation in Digital Environment

Due to specific nature of digital environment and skills required to a subject who is working
and cooperating with others in the digital environment, the syntagm “critical valuation”, which

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does appear in syllabi (most often in the form and in the sense of critical thinking), but does not
relate to critical evaluation in the digital environment, had to be omitted from the result due to
the fact that encouraging critical evaluation which is described in the syllabi affects the
development of critical thinking skills about the digital environment content only indirectly.

4.3. Category Communication and Digital Cooperation in Digital Environment

In the matrix Communication and Cooperation in Digital Environment, 2 most important
linguistic syntagms are shown, which are by 1, i.e. by 2 less than in other comparable categories.
Namely, the category Communication and Cooperation in Digital Environment is derived from
the domain of the curriculum which encompasses the most specific, i.e. the narrowest field,
thus resulting in finding the least number of significant terms. The linguistic syntagm
“cooperative learning in digital environment” was created by amalgamating subordinated
syntagms (learning management, cooperative learning, digital educational environments,
videoconference), whereas in conducting classes planned by the curriculum, it also implies
cooperation in digital environment and exploiting advantages of digital educational
environment (for example, videoconferences during cognition) with the purpose of achieving
better quality in learning management.

4.4. Category Creativity and Innovation in the Digital Environment

Out of the highlighted linguistic syntagms in the category entitled Creativity and Innovation in
the Digital Environment (creative action, multimedia content design and innovative action and
proprietary protection), the linguistic syntagm “multimedia content design” is the most
represented, as in the curriculum and syllabi - it refers to creation of digital multimedia
materials, such as photography, posters, audio and audio-visual materials etc.

5. CONCLUSION
Due to the changes caused by omnipresent digitalization, the Republic of Croatia has initiated
the process of conducting digital transformation, both through formal education in the form of
curricular reform, but also project-based, as in the project entitled “e-Schools: Complete
informatization of school business processes and teaching processes for the purpose of creating
digitally mature schools for the 21st century“ with the aim derived from the European standards
outlined in the document “Digital Competence Framework for Educators”. Still, from the aspect
of preparation for digital transformation, the changes within studies for teaching teachers are
insufficiently encouraged, thus the development of teachers’ digital competencies required for
the digital transformation era is still left to mere willingness of an individual teacher. The
comparison of educational syllabi discussed throughout this paper has set the grounds for
systemic alterations of the curricula and syllabi, not only those of the faculties for teacher
education, but also of other studies during which students are educated for non-IT professions;
furthermore, it has indicated the need for implementing complementary research of syllabi of
other faculties for teacher education in the Republic of Croatia and studies during which the
students are educated for educational work in secondary schools and researches focused on
examining the level of digital competencies in final-year students at the faculties of teacher
education.

ACKNOWLEDGEMENT: Publication of this paper was supported by the University North to

which the authors of this paper wish to express their gratitude for the overall support. The
authors would also like to express their many thanks to professor Ljerka Luić, lecturer of the
PhD course Methodological Approaches in Researching Digital Intelligence in the Media and
Communication Area for the motivation and support.

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LITERATURE:
1. Luić, L. (2018). Strateško planiranje i upravljanje školom. Zagreb: CARNet.
2. Luić, L., Alić, M. (2022). The importance of developing students' digital skills for the digital
transformation of the curriculum. 16th International Technology, Education and
Development Conference, 7-8 March 2022, Online (p. 7207 – 7215) Retrieved 25/1/2022
from https://www.researchgate.net/publication/359466404
3. Ministry of Science and Education. (2019). Kurikulum međupredmetne teme Uporaba
informacijske i komunikacijske tehnologije za osnovne i srednje škole. Ministry of Science
and Education: Zagreb. Retrieved 25/1/2022 form https://mzo.gov.hr/istaknute-teme/odgoj-
i-obrazovanje/nacionalni-kurikulum/medjupredmetne-teme/3852
4. Redecker, C., Punie, Y. (ed.) (2017). European Framework for the Digital Competence of
Educators: Digcompedu. Luxembourg: Publication Office of the European Union.
5. Savić, D. (2019). From Digitization, through Digitalization, to Digital Transformation.
Online Search, v.43 (p. 36–39) Retrieved 25/1/2022 from https://www.researchgate.net/
publication/332111919
6. Syllabuses of the Integrated undergraduate and graduate university teacher study of the
Faculty of Teacher Education University of Zagreb. (2021). Retrieved 25/1/2022 from
https://www.ufzg.unizg.hr/programi/uciteljski/
7. Švelec-Juričić, D., Luić, L. (2021). The importance of information and data literacy of
leaders in a turbulent environment of digital business transformation. 76th International
Scientific Conference on Economic and Social Development – "Building Resilient
Society", 17-18 December 2021, Zagreb, Croatia (p. 298 – 307) Retrieved 25/1/2022 from
https://www.researchgate.net/publication/357574854
8. Vuorikari, R., Kluzer, S., Punie, Y. (2022). DigComp 2.2: The Digital Competence
Framework For Citizens. Luxembourg: Publication Office of the European Union.
9. Wang, Q. E., Myers, M. D., Sundaram, D. (2013). Digital natives and digital immigrants:
Towards a model of digital fluency. Business & Information Systems Engineering, v. 6 (p.
409-419) Retrieved 2/5/2022 from https://core.ac.uk/download/pdf/301361501.pdf
10. Zakon o znanstvenoj djelatnosti i visokom obrazovanju. NN 123/03, 198/03, 105/04,
174/04, 02/07, 46/07, 45/09, 63/11, 94/13, 139/13, 101/14, 60/15, 131/17.

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THE INFLUENCE OF CITY ADMINISTRATION'S RESPONSIVENESS

TO CITIZENS ATTITUDES TOWARDS CITY DIGITAL
COMMUNICATION
Lovro Lukavecki
University North, Croatia
lolukavecki@unin.hr

Maja Hresc
University North, Croatia
mahresc@unin.hr

ABSTRACT
New technologies today allow users, citizens, to connect with organizations and to seek answers
to their questions and requests, using a variety of tools. Such digital capabilities have posed
new challenges towards organizations, which imply adapting to more intensive, efficient, and
faster communication. This paper focuses on the study of digital competence Media and
Information Literacy and Digital Civic Identity within the Digital Intelligence Model (DQ)
based on the example of digital communication of City of Varaždin City Administration with
citizens. Previous analysis ranked the City of Varaždin very highly in Croatia in terms of the
effective communication between the City Administration and its citizens, but no survey has yet
been conducted on the citizen’s satisfaction with the City Administration's communication. The
aim of the research is to estimate the impact of the responsiveness of the City
Administration on attitudes of citizens about the digital communication of the City of Varaždin,
and the subject of this paper, on the example of the City of Varaždin, is to determine their
correlation. In addition to the structural analysis of available tools and the responsiveness of
the City Administration in communication with its citizens, the satisfaction of the citizens with
the digital communication of the City Administration has been examined and answers to
research questions are being sought: Are the citizens satisfied with the digital communication
of the City Administration? What is their attitude towards it? Does the responsiveness of the
digital communication of the City Administration affect the satisfaction or the dissatisfaction
of citizens with the digital communication? Qualitative and quantitative research methods have
been applied in order to obtain adequate answers. Content analysis identified the digital
communication tools of the City Administration, a Mystery Shopping method has tested the
responsiveness of the City Administration on the identified tools and a survey on a
representative cause of citizens has examined the attitudes of citizens to the digital
communication of the City of Varaždin, the analysis of which the need for further development
continuing the research necessary to design a validation model of the collaboration of the
digitally competent citizen and Smart City has been identified.
Keywords: Digital Communication, Digital Intelligence, Information, Smart City, Varaždin

1. INTRODUCTION
Communication is certainly one of the necessary components of society as a whole and is very
often defined in the framework of action or transfer of information. Such definitions generally
see communication as a process of transferring information from sender to receiver (Kunczik
and Zipfel, 2006). Global changes, which have largely manifested themselves in the digital
transformation of all aspects of life, have not bypassed the adaptation of communication. With
such changes, communication acquires completely new dimensions and meaning, and digital
culture becomes a component of the culture of society as a whole (Švelec-Juričić and Luić,
2020).

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The development of information and communication technologies has enabled a faster and
more intensive communication and transfer of information, and such changes have posed new
challenges to various organizations to adapt to. Cities, and thus city administrations, are one of
the most important elements of society. According to United Nations statistics, 55.3 percent of
the world's population lives in urban centers, and it is projected that by 2030, cities will cover
60% of the total population (UN, 2018). Such development presupposes good organization, and
over the last two decades the concept of a "smart city" has become increasingly prominent
(Albino et al., 2015). Although the concept of a "smart city" is not limited to the use of ICT
(information and communication technology) (Allwinkle and Cruickshank, 2011; Albino et al.,
2015), ICT is certainly an important component of creating a sustainable relationship and
communication between city government and its citizens. Cutlip et al. (2003) point out that
public relations professionals, as intermediaries, largely shape a thoughtful dialogue between
elected officials and public authorities and citizens, which is the basis of democracy. Therefore,
their role in motivating and persuading citizens to participate in government and the decision-
making process is extremely important but often neglected (Ibid, 494, 495). One of the
functions of public relations in public authorities is to continuously report their citizens on all
activities. Successful governance, in addition to gaining the support of its citizens for policy
implementation, implies their participation and active cooperation (Tomić, 2008). Precisely
with the aim of establishing quality communication with citizens, informing citizens, as a result
of which they can give their view of the problems and discuss them, the city administration
must have a good foundation and an effective communication system. By using the right
communication tools, fast, efficient, correct communication, and ensuring a continuous flow of
information, transparency and openness in local government are achieved. Therefore, effective
communication contributes to building trust, and trust in the organization is a prerequisite for
engaging every individual whose activities could contribute to strengthening the reputation of
the organization in the public (Švelec-Juričić and Luić, 2020). However, as Luić et al. (2020)
state in the example of schools, the use of ICT must not be based on the motivation or the
enthusiasm of individuals in the administration, but there must be a clearly constructed system.
According to the 2021 Economic and Social Digitization Index, Croatia ranks 19th out of all
27 EU member states. According to a specific segment, the availability of digital Internet
services for citizens in Croatia is also below the European Union average (European
Commission, 2021). The Croatian company Apsolon has been conducting research on the
digital readiness of Croatian cities for years and has especially been researching the component
"communication channels between the city administration and its citizens" (Apsolon, 2021: 37).
In the research conducted in 2021, three cities stood out in the parameter of communication
between the city administration and citizens - Rijeka, Zagreb, and Varaždin (Apsolon, 2021:
41). According to the first results of the 2021 census, Rijeka and Zagreb are two of the four
largest cities in Croatia in terms of population, while Varaždin is a medium-sized city. It is
precisely the population size and its historical development in the context of educational,
development and research institutions and organizations dealing with ICT technologies, like
University North, Faculty of Organization and Informatics or the Tech Park, that point out
Varaždin as an interesting subject of research on communication between the City
Administration and its citizens. Previous research shows that the City of Varaždin conducts
effective communication with its citizens, but this research also seeks to examine the attitudes
of citizens in this regard. Therefore, a correlation is established between the responsiveness of
the City Administration and the attitudes of citizens about digital communication of the City of
Varaždin.

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2. METHODOLOGY
The research focuses on the study of digital competencies Media and Information Literacy and
Digital Civic Identity within the Digital Intelligence Model (DQ) (Dqinstitute, 2022) on the
example of digital communication of the City Administration of Varaždin with its citizens. The
main goal is to assess the impact of the responsiveness of the City Administration on the
attitudes of citizens about digital communication of the City, and the subject of this paper is to
determine their correlation on the example of the City of Varaždin. Therefore, questions are
asked: Are citizens satisfied with the digital communication of the City Administration? What
is their attitude towards digital communication of the City Administration? Does the
responsiveness of digital communication of the City Administration affect the satisfaction or
dissatisfaction of citizens with digital communication of the City? The paper examines the main
hypothesis that the responsiveness of the City Administration significantly affects the
satisfaction of citizens with digital communication of the City Administration. A combination
of qualitative and quantitative research methods were used in the paper. In order to determine
the digital communication tools of the City Administration, the method of content analysis was
used, while the responsiveness of the City Administration was tested by the participatory
observation method, i.e. the Mystery Shopping method (Wilson, 1998). Finally, in order to
examine the attitudes of citizens about digital communication of the City of Varaždin, a survey
was conducted on a representative sample of citizens.

3. RESULTS
3.1. Digital communication channels of the City Administration
The City of Varaždin has a total of five administrative bodies and most of the communication
process related to informing citizens about the work of the City Administration is performed
within the Administrative Department for the Affairs of the Mayor and the City Council. Five
Departments have been established within the Administrative Department for the Affairs of the
Mayor and the City Council, while Department for Protocol, Public Relations, Intercity and
International Cooperation has the biggest focus on communication (City of Varaždin, 2021).
The Department of Protocol, Public Relations, Intercity and International Cooperation
coordinates and improves communication with the target audience of the mayor and deputy
mayor. Through various communication tools and online communication, the Department
works on involving citizens and the public in the work of the City Administration and in
decision-making processes. The employees in the Department are in charge of implementing
the right to access information to citizens. The department is in charge of directly informing
citizens and the public about the work of the City bodies, as well as informing them through
the media and using the city website and official profiles on social networks. Also, the
Department cooperates with state bodies, various institutions, associations, media and citizens
(City of Varaždin, 2021a). The department has four employees: Head of the Department for
Protocol, Public Relations, Intercity and International Cooperation, Senior Adviser for Public
Relations and Protocol, Senior Adviser for Protocol, National Minorities and International
Cooperation and Senior Expert Associate for GRIC (City of Varaždin, 2021a). In the
communication process, the department uses various communication tools and applies modern
information and communication technology. Citizens can contact the City Administration of
the City of Varaždin directly through their e-mail addresses that are publicly available on the
website of the City of Varaždin (Varazdin.hr, 2022), through the free City Complaint
Information Center (Gric.varazdin.hr, 2022), Facebook pages (Facebook.com), or Facebook
Messenger. Back in 2004, the City of Varaždin launched the free City Complaint Information
Center (GRIC). GRIC is a free system through which the citizens of Varaždin can report utilities
or infrastructure problems, complaints and inquiries, calling the free number or via the website,
and the solution of which is within the competence of the City of Varaždin or City services and

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companies. Through GRIC, citizens can also receive feedback related to their inquiry like the
status of solving the reported problem and all other relevant information. By entering the
complaint number and password in to the system on the GRIC website, citizens can see the
status of the received complaint at any time. The Facebook page Grad Varaždin currently has
8,640 followers, and the reach of posts reaches 17,956. Announcements about the activities of
the City Administration are daily and often include several daily announcements. Followers of
the Facebook page of the City of Varaždin often use the opportunity to comment below the post
and, in this way, to express their opinion or to make an inquiry or complaint. Also, citizens use
the popular Facebook Messenger application for their inquiries, most often for a short guide on
where and whom to contact for a particular problem. In terms of digital tools, there is certainly
room for improvement in terms of opening up additional digital channels for communicating
with its citizens. Therefore, the City of Varaždin can focus on other Croatian cities such as
Zagreb, which through Zagreb Holding enables communication via WhatsApp and Viber
applications, or, for example, Karlovac, has a special chatbot with which citizens can
communicate (Apsolon, 2021: 38).

3.2. Mystery Shopping of the City Administration of the City of Varaždin

The Mystery Shopping method, which is a specific method of participatory observation, was
used to test the responsiveness of the City Administration (Wilson, 1998). With the Mystery
Shopping method, researchers are transformed into users or potential users in order to monitor
the quality of the process and service (Ibid). In this case, the mentioned method tested the
responsiveness of the City Administration on digital channels: email, City Complaint
Information Center (GRIC), Facebook page and Facebook Messenger. Responsiveness via
email was tested by sending inquiries to officials from the Administrative Department for
Construction and Utility Services regarding damage to equipment in the Youth Park, and GRIC
was tested by sending inquiries about unsorted waste at the entrance of one of Varaždin's
neighborhoods. Responsiveness on the city's official Facebook page was tested with a query on
Physical Education in kindergartens sent in the form of comments on the Facebook post about
the Kindergarten Olympics. Ultimately, Facebook Messenger was tested by sending inquiries
about maternity benefits via email. The answer to the inquiry sent by email had not received by
the end of writing this paper. The response from GRIC arrived within 17 minutes, but the
response only stated that the inquiry had been received and that the status could be checked on
the official GRIC website. Checking the status on the official GRIC website states that the query
was assigned to a "solver", but no new information had been received by the end of writing this
paper. Since the inquiry was related to the City's utility company, Čistoća, it is obvious that
there is a lack of responsiveness on their part. The response to the inquiry through comments
on the City's Facebook page arrived after 48 hours, and the response to the inquiry through a
message on Facebook Messenger arrived in less than four hours (See: Table 1).

DIGITAL TOOLS ACCESS

Email No replies
City Complaint Information Center 17 minutes
(GRIC)
Facebook page 48 hours

Facebook Messenger 3 hours i 48 minutes

Table 1: Responsiveness of the City Administration through digital channels

(Source: Varazdin.hr, Gric.varazdin.hr, Facebook.com)

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For the purpose of this paper, the City Administration of the City of Varaždin was sent an
inquiry on the statistics and the number of received inquiries and answered inquiries on these
digital channels. In response, the City Administration stated that it keeps statistics only for the
City Complaints Information Center, and they sent us detailed statistics on the number of
inquiries received, the number of answered or resolved inquiries and the nature of the inquiries.
According to the data obtained for the period from 1 April 2017 to 1 April 2022, a total of 2808
inquiries (complaints) were received, of which a total of 2475 (88.14%) have been resolved or
answered so far. The largest number of inquiries is related to public lighting, waste disposal,
landscaping of public and private areas, parking in public areas and road maintenance.

3.3. Results of the survey questionnaire

In order to further deepen the analysis of the impact of the responsiveness of the City
Administration on the attitudes of its citizens about digital communication of the City of
Varaždin, a survey was conducted of a total of twelve questions.. The survey was created in
Google Forms and distributed digitally and live. A total of 213 respondents from the City of
Varaždin completed the survey, of which 52.11% were women and 47.88% were men. The
largest number of respondents who completed the survey were 45 to 59 year olds (29.57%),
followed by between 18 to 29 year olds (27%) and 30 to 44 year olds (24.88%), and a slightly
lower percentage of those over 60 (17.84%). The largest number of respondents had completed
high school (57.54%), college or university (34.63%), while only 2.79% of respondents had
completed a master's degree or a PhD. A total of 5% of respondents had completed primary
school education. The survey showed that less than half of the respondents had so far
communicated with the City Administration (43.7%) and the vast majority (74%) had received
an answer to their question (See: Figure 3). The respondents most often communicated via
Facebook (Facebook page and Facebook Messenger), email (34.57%) and GRIC (28%) (See:
Figure 1). More than half of those who have not had any digital communication with the City
Administration yet, would choose email as the primary channel of communication in the future
(57.85%), while a slightly smaller number of them would choose GRIC (24.79%). It is assumed
that respondents who have not communicated so far, consider email the most reliable and direct
option. Because they had not needed to communicate with the City Administration, they did
not consider or were not informed about other options such as GRIC. The vast majority (80%)
of respondents asked for a concrete answer from the City, while a small number only shared
their experiences (See: Figure 2).

Through which digital channels did you communicate with

the
City Administration of the City of Varaždin?

16%
35%

21%

28%

Email GRIC Facebook Facebook Messenger

Figure 1: Digital channels through which citizens communicated with the City Administration
(Source: Authors results)

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The reason why you entered into communication with the

City of Varaždin through digital channels is:

19%

81%

I was looking for a concrete answer I shared my experience

Figure 2: Reasons why citizens entered into communication with the City of Varaždin
through digital channels.
(Source: Authors results)

Did you get an answer to your question?

26%

74%

Yes No

Figure 3: Respondents' answers to the question of whether they received an answer

to the question asked.
(Source: Authors results)

The majority of respondents who only shared their experience did so through the digital channel
Facebook. The research showed that the City Administration is generally reluctant to respond
in those respondents who only shared their experience, which results in such respondents
assessing the City Administration's digital communication extremely negatively, with an
average score of 1.78. Respondents who asked for a specific answer received an answer in 84%
of cases, and the largest number of unanswered specific inquiries were those sent via email.
However, if we exclude those who only shared the experience and did not receive an answer to
a specific query, in Table 2 we can see that the average score of the response rate was 3.67,
while satisfaction with the response to the query was rated 3.79. Respondents rated GRIC the
best in terms of response speed, and email the worst, while they expressed the greatest
satisfaction with the answer in the case of email, and the least satisfaction with the answer
received on Facebook. Respondents rate the digital communication of the City of Varaždin with
an average score of 3.67, with the highest score given by those who communicated with GRIC,
and the lowest by those who communicated via Facebook.

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Evaluation Satisfaction Satisfaction Evaluation of

with the with the digital
speed of answer communication
response of the City of
Varaždin
In total 3,67 3,79 3,67
Email 3 3,92 3,5
GRIC 4,32 3,76 3,76
Facebook 3,4 3,4 3,4
Facebook 3,85 3,71 3,64
Messenger
Table 2: Average satisfaction ratings of response speed, response, and digital
communication.
(Source: Authors results)

If we compare the obtained data with the Mystery Shopping method, we can see that the results
largely coincide. The response rate established by the Mystery Shopping method coincides with
the respondents' ratings. When we compare GRIC, the data also matches with the response in
terms of satisfaction. Namely, GRIC was rated the best according to the speed of response but
not according to satisfaction with the response in general. The reason is probably that, although
the speed of the response is at an enviable level, the response is general and requires additional
information from other responsible solvers. The respondents are most satisfied with the answers
they received via email. One of the explanations may be that the respondents sent inquiries to
specialized administrative departments that could provide them with a specific answer to the
question. Finally, if we look at the results of the answer to the question "To what extent does
the digital communication of the City Administration of Varaždin affect your attitude towards
the work of the City Administration?", we can see that almost 60% of respondents point out
that digital communication affects their attitudes (Graph 5). Interestingly, the research shows
that respondents who have ever communicated with the City Administration online estimate
that digital communication affects their attitude towards the work of the City Administration
more than those who have not communicated so far.

To what ex t ent does t he di gi t al com m uni cat i on of t he

C i t y Adm i ni st rat i on of Varaž di n affect your at t i t ude
t owards t he work of t he C i t y Adm i ni st rat i on?

40.00%

23.00%
19.00%

10%
7.00%

1 2 3 4 5

Figure 5: Respondents' answers to the question whether digital communication

of the City Administration of the City of Varaždin influences their attitude towards
the work of the City Administration
(Source: Authors results)

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4. DISCUSSION
The content analysis determined that the City of Varaždin has a total of four digital channels
through which it communicates with its citizens: email, the City Complaint Information Center
(GRIC), Facebook page, and Facebook Messenger. In this context, the City of Varaždin
definitely has space for improvement in terms of introducing other innovations for
communication with itd citizens, such as the use of other social networks and applications such
as Instagram, WhatsApp, and Viber, and, for example, chatbots. The Mystery Shopping method
has shown that the City Administration is extremely unresponsive in terms of responding to
emails, relatively responsive in terms of responding to Facebook page and Facebook
Messenger, and extremely responsive in terms of responding to inquiries via GRIC. However,
the research showed that the response provided by the City Administration through GRIC is
general and lacks the responsiveness of those responsible for solving certain problems. The
survey questionnaire showed that the vast majority of respondents in communication with the
City Administration are looking for concrete answers and that the majority get them. Those
respondents who communicated with the City Administration looking for concrete answers
rated the speed of answers and answers in general, as well as the overall digital communication
of the City of Varaždin, with an average score of very good. Significantly more negative digital
communication of the City Administration is assessed by respondents who only shared their
experience and did not receive an answer. An important fact is that almost 60% of the
respondents point out that digital communication affects their attitude towards the work of the
City Administration, with greater emphasis on this issue by those who have had the opportunity
to communicate with the City Administration than those who have not.

5. CONCLUSION
In today's world, cities are one of the most important elements of the social system, and
predictions show that they will aggregate more and more people in the future. Such a situation
inevitably implies a better organization and an emphasis on the Smart City concept, of which
information and communication technologies are an integral part. This paper, using qualitative
and quantitative research methods, has confirmed the initial hypothesis that the responsiveness
of the City Administration significantly affects the satisfaction of citizens with the digital
communication of the City Administration but has also showed that there is considerable space
for progress in developing digital channels and improving the responsiveness of the City
Administration. The biggest shortcoming in terms of responsiveness can be seen in the response
to those citizens who have shared their experiences through digital channels, and in regard to
this, the City Administration should consider interacting with those citizens who only share
their experiences through messages or comments. The conducted research once again
confirmed the exceptional complexity of the process of examining the attitudes of citizens, but
also the need for further development of digital competencies of the City Administration and
its citizens. Therefore, the research has a significant applicative contribution in terms of
improving the practice of the City Administration but also a scientific contribution because it
provides a good basis for further research needed to develop theoretical models for assessing
cooperation between digital citizens and Smart City.

ACKNOWLEDGEMENT: Publications of this paper was supported by University North to

which the autors express their gratitude for the support. The authors would also like to express
their many thanks to professor Ljerka Luić, lecturer of the PhD course Methodological
Approaches in Researching Digital Intelligence in the Media and Communication Area.

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LITERATURE:
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gradova-2021/
4. Cutlip, S. M., Center A. H., Broom G. M. (2003). Odnosi s javnošću. Zagreb: Mate.
5. DESI (2021). Indeks gospodarske i društvene digitalizacije (DESI) za 2021. Hrvatska.
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Friedrich Ebert Zagreb.
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; López Martínez, A. ; Candel Torres, I. - : IATED Academy, 2020, 7169-7175)
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Varaždina 7/21.
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(2021). Službeni vjesnik Grada Varaždina, 11/21.
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7th).
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NETIQUETTE AND DIGITAL EMPATHY IN THE CONTEXT OF

APPLYING CROSS-CURRICULAR TOPICS IN THE
CONTEMPORARY EDUCATION
Marta Novak
University North, Croatia
martanovak@unin.hr

ABSTRACT
Digital empathy means being aware and sensitive to one's own and other people's feelings,
needs and concerns in an online environment. To build good relations with others using digital
media doesn't mean only to act in accordance with rules of polite behaviour on the internet
(netiquette), but also to possess a certain level of digital emotional intelligence, developed
through the competence of digital empathy. Through the research of attitudes and values
regarding the netiquette and digital empathy of participants of the educational process -
teachers and students in senior years of secondary school - the starting point was a presumption
that only teachers, who had been adequately educated on that specific topic, were able to
adequately teach students through a sequence of cross-curricular topics, and in that way
contribute to the development of their digital empathy. The aim of the research was focused on
detecting attitudes and self-assessment of digital empathy of students and the influence of it on
their success in their education and the choice of their future job. Through the method of content
analysis, the cross-curricular curriculum "The Use of the Information and Communication
Technology for Primary and Secondary Schools in Croatia" has been researched. Through the
choice of key words, an analytical matrix has been determined. Through the method of a focus
group, with seniors of Josip Slavenski Grammar School and The School of Economics and
Trade in Čakovec, research has been carried out, involving three groups in each school.
Moderators in each group were representatives of The Student Council. The interview has been
done by the author of this thesis through the method of a structured interview. The results have
shown a partial correspondence of attitudes and views of students and teachers, regarding the
significance of teaching the topic of netiquette and digital empathy within the framework of
cross-curricular topics. The teachers' views have shown an emphasised need for a lifelong
education connected to digital competencies and literacy, as well as involving these topics in
syllabi of formal contemporary education. Further research could be extended into studying of
causal significance of digital competencies, digital communication and digital literacy,
adopting and applying digital empathy in educational processes and programmes.
Keywords: Cross-curricular topics, Digital competencies, Digital empathy, Education,
Netiquette

1. INTRODUCTION
Digital technologies change our way of life from the ground, how we communicate, spend our
free time, educate ourselves, as well as our perspective of the entire reality. Although the time
of generations born with a mobile phone in their hands has come, this does not mean that they
are also born with all the competences necessary to use information and communication
technology correctly. Today, education is defined as a lifelong process, which needs to be
adjusted to social changes. In this context, learning is observed as a search for new
understandings, an interesting journey and irreplaceable experience of acquiring new pieces of
knowledge and skills, the process of understanding and accepting different attitudes and values,
and inspiration for creating a better present and future.

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In their paper Ćurković et al., (2020) pointed out that the process of teaching should be directed
toward the student, so that the main aim of teaching is the method how to teach the student to
think or take over the responsibility for one's own process of reflection, evaluation, analysis
and making conclusions, based on verified facts – all that to enable the student to participate
independently and responsibly in all fields of life. The readiness of teachers as pedagogical
educational professionals is the key element for the usage and implementation of ICT in the
pedagogical educational process.

It is of fundamental importance to determine if the people teaching children are aware of the
importance of the use of ICT. The gap between those who teach and those who learn is
significant. Some documents with guidelines have been issued on the level of The European
Commission, defining advisable competences of modern teachers, to be up to date with new
information and communication technologies, enabling them to competently teach their
students new knowledge and skills.

Image 1: display of competences of teachers (Redecker & Yves 2017, p.15)

In 2019 in Croatia, a new curriculum of the cross-curricular topic of The Use of ICT was issued.
The project of "School for Life" was started. A new model of teacher training was introduced.
The emphasis was put on virtual teacher training, with occasional on-site meetings. This
approach assumed digital competences of teachers. Ćurković et all. (2020) claims that one of
the aims of this project was to educate teachers about The Use of ICT in monitoring and
assessment of students, as it was proven that The Use of ICT in any of the phases of the
educational process has a positive impact on student motivation. Ljubić Klemše (2021) in her
paper states that the Agency for Mobility and EU Programmes started a training course for
teachers in the ICT surroundings on the eTwinning platform, and she pointed out that since
December 2018, all the teachers have been actively involved in the education on the Loomen
platform, The pandemic rushed The Use of ICT in classes even more. Up to that point, digital
competences were not a mandatory topic of teacher training and were not evaluated by the
Education and Teacher Training Agency. A teacher is a student throughout one's life.The cross-
curricular topic The Use of ICT involves efficient, appropriate, timely, responsible and creative
use of ICT in all subjects, fields and on all levels of education.

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Children and young people are familiar with ICT and they accept it easily. This cross-curricular
topic covers all school subjects and extracurricular activities. The primary aim of this research
was to determine to which extent the curriculum of the cross-curricular topic The Use of ICT
was implemented into our pedagogical educational system. Apart from the primary aim, the
research had other aims, including analysis of the cross-curricular topic and experiences of
teachers with the lifelong education, available training courses and implementation of the ICT
into one's own subject and extracurricular activities, as well as the final aim, to find out to what
extent the students are actually digitally competent after graduating secondary school and how
much they know about digital competences, with a special emphasis on the notion of digital
empathy.

2. METHODOLOGY
With the aim of collecting data systematically, several methods were used in this research.
Quantitative and qualitative data were collected through the desk method of content analysis.
The sample was the curriculum of the cross-curricular topic The Use of ICT in Primary and
Secondary Schools. The unit of analysis was the notion of digital empathy and digital emotional
intelligence. Through the quantitative analysis of the content of the same sample, the aim was
to determine if the notions of digital empathy and digital emotional intelligence through
knowledge, skills and attitudes were merely described and interpreted with different words.
Further research was carried out at Josip Slavenski Grammar School and The School of
Economics and Trade in Čakovec. Before the research was started, the consent to carry it out
had been requested from both headmistresses. The students who expressed their wish to
participate were also given consent forms.

The method of a focus group is a quantitative form of research, which includes group discussion
on the given topic. The basic aim of the focus group is to encourage a thorough discussion, to
research the attitudes and values of examinees to a certain problem or a topic, as well as
understand and explain the meanings, beliefs and culture, which influence feelings, attitudes
and behaviours of individuals. (Skoko & Benković 2009, p.115)

Seniors from both schools took part in this research. As the number of examinees was limited
to 12, an online questionnaire was created for that purpose, and in that way, the focus group
was formed with the 12 fastest applicants. The moderators of focus groups were members of
The Student Council, who had previously attended the moderation workshop. The questions
were divided into three thematic sequences. After introductory questions (how they felt etc.)
the first sequence of questions referred to digital competences, if they were familiar with the
notions of digital competence, skills, digital intelligence, emotional digital intelligence, and
digital empathy. The moderator used subquestions to stimulate the dynamics of the group and
the sequence of discussion. With subquestions, the moderator motivated students to explain
each notion with an example from their own use of ICT. The second sequence of questions
referred to the rules of behaviour on the internet, examples from their school or surrounding,
and aimed at finding out if they tried to help and solve the problem. The last, third sequence,
referred to the content they personally followed on the internet, what kind of content they
shared, how important was for them that the content they shared had an empathetic character.
Did they care about the emotions of others when they posted something online? The focus
groups were held in the interval of ten days. The whole discussion was, with previously given
consent of participants, audio-recorded and later transcribed. During the discussion, it was
important that all the members of the focus group were relaxed and give as spontaneous and
honest answers as possible. This kind of information is extremely valuable, because further
research, based on it, can be done in the future.

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In each school three teachers, who teach ICT, Croatian and English, were selected. The reason
why ICT was chosen is the fact that the teachers of that subject are the closest to the quality
implementation of the cross-curricular topic of The use of ICT. Teachers of Croatian run the
extracurricular activity Media Literacy in each school. As for teachers of English, through the
conversation before the beginning of the research, we came to a conclusion that the English
language significantly involved the topics of digital intelligence and digital competences.

3. RESULTS
Through the quantitative method of content analysis, it was determined that in the cross-
curricular topic The Use of ICT the notions of digital empathy and digital emotional intelligence
were not mentioned. Although they were not specified in these words, through the qualitative
analysis we came to a conclusion that both digital empathy and digital emotional intelligence
were present. For example, B domain – Communication and collaboration in the digital
surroundings – 5th cycle, about attitudes, it is stated: "respects equal participation of others in
the process of communication, following ethical, social and legal values”. Digital competences
are mentioned as skills and attitudes, which should be equally present in all classes and subjects,
in primary and secondary education. A significant emphasis is put on the digital competences
of teachers themselves: teachers as educational experts, apart from the motivation for teaching
the cross-curricular topic, should be familiar with the curriculum, pedagogical educational
expectations and actual abilities of their pedagogical educational institution, to be able to
efficiently involve ICT in their work. Precondition for successful teaching, apart from the use
of ICT, is permanent professional development, bearing in mind that the content of this cross-
curricular topic has been constantly changing. A difference was determined between focus
groups of each school, depending on the number of lessons of ICT and wider general education.
The grammar school seniors used ICT more often during their education and are more familiar
with the terminology. Also, the grammar school seniors used more digital tools, online learning
platforms, and almost every day they communicated with their teachers on Teams etc.
(regardless of the fact if the classes were online or not). The seniors of the class for the tourism
and hotel industry learnt about digital skills and competences in classes of English and
Psychology. The other senior classes of The School of Economics and Trade said they were not
familiar with the notions of digital competences (a lower number of ICT and English classes
and they do not have Psychology as a subject). It should be noted, however, that our students
do not connect content cross-curricularly. The content is still put into frames of individual
subjects. The seniors of general education and language classes in the grammar school had also
never heard of the notion of digital empathy, but they were familiar with digital skills because
they were involved in facultative classes in that school (Civic Education, Digital Media and
Media Literacy). The seniors of maths classes were familiar with the notion of digital empathy,
but vaguely. In the discussion, most of them said they were not sure if they were right. "Is it
about the influence of technology on our development or how we react to a situation we see in
a moral sense?" The second sequence of questions concerned the rules of behaviour on the
internet, netiquette. It was common for all focus groups that they almost identically described
rules of behaviour on the internet and connected that content to what they learnt in Homeroom
classes at primary school (netiquette assumes protecting personal data, respecting other people's
privacy, never taking anyone's photos without their consent, do not reply to messages of
unknown senders, obey copyright legislation). They continued to learn about netiquette in
Homeroom classes at secondary school. The third sequence of questions referred to the content
they followed on social networks and the content they shared. The difference between schools
was noticed. The seniors of The School of Economics and Trade preferred entertainment
content and spent more time on the social network Tik Tok.

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Most content that they followed was determined by their search engines. Some spent up to 8
hours on that network: "We only scroll and the time passes by." They read what made them
laugh and then they shared such content further. Grammar school seniors were more present on
some other social networks. Some of them had profiles on LinkedIn network, where they could
follow companies such as Info Bip etc. Most seniors of the grammar schools wished to enrol
on the Faculty of Electric Engineering and Computing, so they followed such pages on social
networks. Another difference between schools was noted here. Grammar school seniors
connected their development and future education to the content on the social networks, they
focused on what they were interested in professionally. On the other hand, seniors of The
School of Economics and Trade used social networks only for fun, they had nothing else to do,
and this is the way they spent their time. There was also a notable difference in the number of
hours spent on social networks. At the grammar school, they said the maximum was three hours
a day, as learning didn't leave them more time, otherwise, they would spend more time on social
networks. At The School of Economics and Trade, they said they spent up to eight hours a day
on social networks. They got the result automatically from their mobile phone. Some of them
tried to set themselves a limit, but they failed. They use Facebook mostly to be up to date with
the news. They often watched short films on Youtube. With seniors of the grammar school, a
discussion was developed on the notion of "stalking". They would create a profile on all social
networks where they could follow a certain person, and then they would turn on the location so
that they could follow where this person went etc. Most seniors said they did not post personal
pictures online, or share personal content, except if their parents did so. In this group, they had
the option of choosing the content which they would share on the social networks. Two options
were offered: an entertaining short film or an educational film, sending a message of empathy.
Their choice was an entertaining short film. The English teacher at the grammar school is not
satisfied with the expectations from teachers by the Ministry. She thinks the systems of
assessment and e-learning systems have not been clearly explained. She thinks that she acquired
enough knowledge on digital competences, but she does not know enough about teaching the
topic, nor about digital empathy, although she would like to know more. She has not read the
curriculum The use of ICT. The ICT teacher believes that the permanent education in this field
is a part of his profession, however, he has not educated himself about digital empathy, nor has
he taught students about it. He is familiar in detail with the content of the curriculum of the
cross-curricular topic The Use of ICT and assesses his students regularly according to the
outcomes described in the handbook. The Croatian teacher is delighted by the notion of digital
empathy, although she thinks that the notion of empathy itself should be introduced in the
school system first. She runs the facultative activity of Media Literacy, and she thinks she has
enough knowledge in the field of digital skills and competences. She also actively transfers her
knowledge to her students. She is happy with the teacher training courses in this field. She is
familiar with the cross-curricular topic, although she has not studied the handbook in detail.
The Croatian teacher from The School of Economics and Trade, apart from her subject at
school, teaches facultative classes in Media Literacy. In these classes, with her students she
makes short films for school, to present school on social networks etc. The teacher has recently
come to work at school from the private sector, and she thinks that the expectations from
teachers are too high. She acquired her knowledge of digital skills in the private sector and
considers herself competent to transfer her skills and knowledge to her students. She thinks that
there are not enough training courses about ICT tools, and, if she had not entered the digital
world earlier, she would not have had enough time now. She says there is too much work with
her basic subject, and she does not have time for additional competences. The ICT teacher
regularly marks all dates such as Safer Internet Day, and she thinks that the number of ICT
lessons is not sufficient to do everything. She has been taking enough training courses, but, due
to the content of her subject, she does not have enough time to educate herself about topics

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which her students might find more interesting. She is familiar with the cross-curricular topic
and regularly uses outcomes and assessment in her work. The English teacher at The School of
Economics and Trade is disappointed with the level of knowledge of that foreign language. She
thinks that most students believe that her English is very good because they spend so much time
on social networks, but, in reality, they are not able to express their thoughts in that language.
As for the ICT, she thinks she has been educated as much as possible in her subject.
Insufficiently, she thinks.

4. DISCUSSION
More detailed research in all the fields is necessary. The cross-curricular topic The Use of ICT
is written very well but insufficiently presented to teachers. During the interviews, when we
presented the image of digital competences each teacher should possess, according to the
document by the European Commission, most teachers only rolled their eyes. As a pedagogical
educational system, we are focused too much on the content of the syllabus and too little on
skills and competences. Also, sadly, each change of the minister of education assumes a
different attitude from the previous way of communication with the staff in education.

Digital competence has imposed itself as one of the unavoidable modern competencies. In
accordance with the changes that have affected today’s students, their teachers are also
changing, theirs need to adapt their learning and teaching skills to new generations of students.
(Luić et al. 2020, p.7169)

At schools, digital competences are in most cases restricted to media literacy (which is mostly
taught as netiquette) and the use of digital learning tools, making films.

It is interdisciplinary oriented approach with tendency to introduce digital literacy through all
subjects and cross-curricular topics, including extracurricular activities (in groups and
individually), project-based learning, problem-based learning and mentoring. (Luić & Alić
2022. p 7213.)

Teachers dealing with this are usually the ones who are willing and motivated enough, and have
enough time to tackle extra training courses on digital competences. It is a fact that today's
generations of teachers were not born with mobile phones in their hands and often must learn
skills, that their students possess from an early age. With this research, we are only at the
beginning. Through the conversation with teachers, it has been determined that one does not
know enough about the cross-curricular topic, and thereby it cannot be implemented in the
pedagogical educational system properly. The curriculum of ICT skills as a cross-curricular
topic has been left as an option to teachers who are motivated enough to use it. The cross-
curricular topic could be tackled by everyone or nobody. Online training courses have not
proven themselves as promising for all teachers, and some of them even avoided that form of
education. The focus groups only confirmed the gap between the ones who teach, and the ones
being taught. In fact, students are familiar with the rules of how to behave themselves online,
they even know these rules by heart, but the discussion showed that they did not follow them.
"Stalking" and similar activities do not contribute to acquiring the skill of digital emotional
intelligence. The students are not keen on sharing sympathetic content online. It is not amusing.
The students are not familiar enough with the notion of empathy. The students and the teachers
understand the concept of "free time" and "wasting time" very differently. Possibly what the
teachers consider wasting time is only acquiring new competences. Everybody involved in the
pedagogical educational system expressed their wish for more knowledge in this field.

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We have good seniors, young people who wish to be ready for today's labour market, teachers,
who also have personal and professional reasons to acquire digital competences, but also be
able to transfer the skill of digital empathy. All participants of the research were delighted by
the notion of "digital empathy". The only open question is where to find space for additional
education and additional knowledge? It is a fact that our subjects are full of content that needs
to be memorised. The focus groups show that the most permanent knowledge is the one where
they learn to do something on their own or participate. The things they have to learn to interpret
are mostly what they later forget, but when they have to do something, it remains in their
memory.

5. CONCLUSION
In the pedagogical educational system, there is still a lot to do to reach the notion of digital
empathy. There is a large interest from all sides, starting from students, to teachers, to learn and
apply these notions. The conclusion is that this cross-curricular topic is not implemented enough
in the pedagogical educational system. There are possibilities for further research and
guidelines to put everything into practice. The fact is that the world cannot go backwards, only
forward, and these competences will become even more important. Although there are no
simple answers to how to achieve this, we have started a discussion about it and we have got a
basis for further research. The profession of a teacher and its development are fundamental for
the development of digital competences, as well as the development of emotional intelligence
and digital empathy among students. "Tell me and I will forget, show me and I might remember,
involve me and I will understand." Confucius

ACKNOWLEDGEMENT: Publications of this paper was supported by the University North

to which the authors express their gratitude for the support. The author would also like to
express their many thanks to professor Ljerka Luić, lecturer of the PhD course Methodological
Approaches in Researching Digital Intelligence in the Media and Communication Area for
support and seeing something in me and encouraging me to be better.

LITERATURE:
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7. Narodne novine (2019). Odluka o donošenju kurikuluma za međupredmetnu temu Uporaba

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SYNERGISTIC EFFECT OF BUSINESS SYNTHESIS AND INFORMAL

EDUCATION ON THE DEVELOPMENT OF REGIONAL DIGITAL
ECONOMY
Jurica Mustac
University North, Croatia
jumustac@unin.hr

ABSTRACT
Digital competencies in today’s dynamic, technological world of business are acquired through
a variety of formal and informal educational practices. Therefore, formal educational
institutions must follow the pace of changing and upgrading technology and digital business.
Informal sources of knowledge available through digital online communication channels and
services are increasingly becoming available to the wider working population, and the degree
of processing of this knowledge depends on the level of digital intelligence of the population.
This paper presents a case study from the north of Croatia as an example of a business-initiated
educational model oriented towards the local community. The research was conducted to
examine the effectiveness of a new approach to education initiated by IT companies from the
real sector. The research aims to determine the experience of participants in such training to
answer the research question of whether such practices maintain a sufficient quality of formal
education and whether such training has a direct impact on strengthening economic capacity
in terms of employment, promotion, or raising the standard of work of already employed
persons. The research also examines whether training launched by technology companies can
help solve the problem of labor shortages in this industrial sector with an emphasis on regional
development. The research sample includes participants from workshops and lectures held by
IT companies in the north of Croatia. Based on the results obtained from the collected surveys,
the statistical analysis determined the extent to which this type of education has an impact on
their employment or progress in existing jobs. The results will be a good guide for further
planning of the digital development strategy of the north of the Republic of Croatia and can
serve as a supplement or as a basis for further, more extensive research of this type, at the
national level, but also as a conceptual framework for related international research.
Keywords: Digital economy, Digital intelligence, Education, IT industry, Entrepreneurship

1. INTRODUCTION
According to the Croatian Chamber of Economy, the Croatian IT industry is the leading
industry in the segment of exports and annual revenues. In 2020, these revenues amounted to
HRK 27.81 billion. The largest part was realized by companies based in Zagreb, a total of HRK
21,703.38. This figure indicates the strong centralization of the IT industry in the Republic of
Croatia. This relationship also raises the question of the need for professional staff. Projections
point to further growth in the need for employment in the IT industry, and if this growth
continues to be reflected mostly in Zagreb, there will be even greater disparities in the
development of the regional IT economy (Croatian Chamber of Economy, 2021). In case the
situation does not change, other Croatian counties will lose their more and more professional
and educational staff, which is bad for IT companies in those counties, as well as for the
economic development of those counties itself. According to the survey, "Finding
new/retaining existing staff" is one of the major obstacles (33% of respondents cited this as a
problem) to further growth or survival of young IT companies and startups. Projections for
Croatia show the creation of 127,000 new jobs in the ICT sector by 2025 and a total of 97
million new jobs globally (Telegram 2021). Although the formal education sector seeks to meet
these labor market needs through secondary and university programs, they are not sufficient.

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The problem is that these programs depend on the will and ability of the governing bodies that
compile and implement them. If these bodies do not react in time, the market and technologies
will move forward, so students from formal institutions may be left deprived of the current
knowledge needed in the labor market (Luić et al., 2020). Recourse to solve this problem, some
IT companies have decided to help the market by launching their training and workshops. This
scientific paper deals with a case study of a project called "Javascripting" initiated by Roberto
Kedmenec, today's director of Krtech Digital d.o.o., precisely because of the need to create new
staff in the IT industry in the northern region of Croatia. The research examines whether such
an approach has a real impact on the development of the regional economy in terms of new
employment or promotion of existing staff. This research is based on considering the accuracy
of the statement that trainings initiated by IT companies have positive effects on the participants
of these trainings and the economy itself. Employment and advancement of staff in the IT sector
for the region or county mean less outflow of people, the possibility of opening new companies,
and new financial revenues in the budget. According to the Croatian Chamber of Economy, the
counties of the northern region of the Republic of Croatia lag behind the main leaders of the IT
industry in Croatia, and the data on Korpivnica-Križevci and Krapina-Zagorje counties are
particularly worrying.

Figure 1: Total revenues (mil. kn) of the Croatian IT industry by counties

(Source: HGK)

2. METHODOLOGY / MATERIAL AND METHOD

The research was conducted on the participants of the Javanese scripting, by the method of a
survey questionnaire sent to the email addresses with which they applied for training.
"Javascripting" is a localized name derived from the word Javascript, which is the name of the
programming language used in education and workshops. In addition to programming itself,
participants are introduced to communication tools used in industry and taught to plan, prepare
and implement projects. This raises the level of their digital literacy, which is very important
because most of the participants are younger, mostly high school and university students.

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Media literacy involves recognizing and understanding digital content. (Luić and Alić, 2022) .
What is important here is that this education of media-literate people who consume media
content learn how to create a platform on which this content will be displayed. Out of 32
participants in the training, 24 of them gave their answers to the questions asked. Respondents
come from the area of Međimurje, Varaždin, and Krapina-Zagorje counties, and education and
workshops were held in Čakovec. The trial was conducted between April 25 and May 10. The
introductory part describes the purpose of the survey questionnaire. The first two questions
relate to the choice of age group and level of education. Other questions examine the impact of
these educations on career development in the IT sector and examine the opinions of
participants on the quality of this type of education and its importance for the economy. The
survey questionnaire contains three types of questions. When asked where an unambiguous
answer is required, respondents could choose only one answer. The possible outcomes of the
training are listed for the questions, leaving the possibility to choose more answers or to
correspond to one's own opinion. The questions that examine the quality of a certain segment
are composed according to the principle of choosing the most important value according to the
scale from the best to the worst choice where only one answer is required. The survey
questionnaire was compiled on the service https://limesurvey.srce.hr/

3. RESULTS
Of the 24 respondents, 38% belong to the age group of 19-15 years, 21% are between 26-30
years old, and the same percentage are in the age group of 31-36 years, 4% of the respondent is
aged between 37-45 years, 13% are between 45-55 years and 4% of respondent are older than
56 years. 29% of respondents have completed undergraduate studies, 8% are undergraduate,
8% respondents have completed graduate studies, 4% of them are currently graduate students,
4% are specialists, and 42% of respondents have completed only high school. 79% of
respondents were satisfied with their education, while 21% were little or not satisfied. 54% of
respondents think that this type of education is a good substitute for formal education, 41% of
them think that it is a good supplement to formal education, and 1% of respondents do not agree
with any statement. The majority (70%) attend such education once a year, and a smaller
number attend it twice (20%) or more than once a year (10%). For 70% of respondents, the
price of education influences the decision to attend. 54% of respondents think that free
education is of poorer quality, 33% think that this is mostly not the case, 8% think that free
education is never worse than paid education, and 4% of respondents think that free education
is always worse than paid education. Education of this type did not affect the careers of 16% of
respondents, while 41% of them had a positive impact, from new employment to promotion.
(Figure 2) .

Figure following on the next page

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Figure 2: Effect on career

(Source: Authors research)

The majority of respondents (87%) believe that training initiated by IT companies can help
create new jobs (Figure 2), new business ventures, increase salaries, and connect people. The
general perception of the participants of such training is positive. (Figure 4).

Figure 3: Labor market

(Source: Authors research)

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Figure 4: Affecting the economic development

(Source: Authors research)

All respondents agree on the inadequacy of secondary education. The majority (62%) of them
believe that university education does not give a clear enough picture of the needs of the IT
sector in the labor market, compared to education initiated by IT companies. (Figure 5). This is
supported by the results of the question on the reasons for attending such education, which
shows the respondents' desire for new knowledge and their progress. (Figure 6).

Figure 5: Comparison
(Source: Own research)

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Figure 6:Reasons to attend

(Source: Authors research)

Respondents generally agree (85%) that education initiated by IT companies can affect the
decentralization of knowledge and staff in the Republic of Croatia (Figure 7). Almost all
respondents (95%) know at least one person who was helped by such training to find a job
(Figure 8) and agree that they help to arouse the interest of the local community in IT
technologies (Figure 9) which has a positive effect on the economy of the region in which they
are held (Figure 10).

Figure 7: Decentralization
(Source: Authors research)

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Figure 8: Other people

(Source: Authors research)

Figure 9: Encourage
(Source: Authors research)

Figure 10: Effect

(Source: Authors research)

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4. DISSCUSION
According to the research of the Croatian Chamber of Economy, the economy of the IT industry
is growing from year to year. The northern region lags far behind Zagreb, and the situation is
no better in other parts of Croatia. The main problem is the strong centralization of the IT
industry, leading to a brain drain from other regions to the very center of the country. As a
result, young startups find it difficult to find new staff, and larger companies are unable to
expand their further business due to a lack of skilled labor in the region. The problem of staff
shortages is being addressed by secondary schools and universities by launching and
maintaining STEM programs, but this is not enough. Research has shown that not only is it not
enough but it is often inadequate. Most respondents agree that formal education does not
provide enough relevant knowledge that can be immediately applied to the labor market. This
problem has also been taught by some companies that organize workshops and trainings for all
those who want to build their careers in the IT industry. Research has shown that most people
attend such educations to improve their knowledge which tells us that interest and desire for
improvement exist. Therefore, it is necessary to continuously work, provide and support such
initiatives because they make a real positive step in the economy and society in general. It
turned out that attending such trainings helped the participants to land their first job. This is a
good direction towards reducing unemployment, so a similar model could be applied to other
industries. Such trainings also help individuals who volunteer as lecturers and mentors, thus
improving their communication skills (Misko 2008). The social component of such education
is important because it concentrates and connects people from the IT sector into one whole. In
addition, trainings of this type can help create new business ventures, new managers, help better
understand business in the IT sector or simply motivate others to get involved in working with
new technologies. Such a whole is easier to follow and upgrade with new knowledge and
insights exchanged by its stakeholders. In addition to this exchange, young people (who make
up the majority of participants in these trainings) spend their free time better. Such societies
also have a positive impact on the spread of digital literacy among the region's population and
raise people's interest in new technologies. This research also showed a correlation between the
desire of young people for new knowledge in the field of IT industry and Eurostat research on
digital literacy of young Croats aged 18 to 24 who are at the top of digital literacy in Europe.
The research confirms the hypothesis that trainings and workshops initiated by IT companies
have a positive effect on the economic development of the regions in which they are held. Some
of the people who attended the trainings successfully found their first job in the IT industry. A
number of participants in such trainings have progressed at work, and most of them have
improved their knowledge, which in turn reflects on the quality of work in the companies in
which they work or will work. The assumption is that this allows companies to work on larger
and more challenging projects that bring in more revenue. Further research on this topic should
be expanded in this direction to obtain more concrete confirmations of this assumption. This
research contradicts the views of Neil Selwyn, who argues that trainings run by IT companies
from Solicia Valley do not work democratically because their proposals are always respected
by the world's leading IT companies and whose ultimate interest is always profit. Thus,
according to his views, politics is subordinated to private capital (Selwyn 2016). In an article
for Forbes, American producer and journalist Gregory Richters states that this is the approach
that companies use to help the economic development of individual regions and entire countries.
As he said: "Think local and collaborate globally to share ideas" (Richters, 2021). The
disadvantage of this research is that there is no broader picture and correlations between
employment figures and the number of people completing formal education in the IT industry.
Also, in the absence of more detailed information on the IT industry of each county in Croatia
(except for total revenues), it was not possible to make a more precise survey.

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The research showed that there is a generally positive attitude towards training initiated by IT
companies and that they have had a positive effect on the majority of respondents. Part of the
respondents thus managed to find their first job, and some progressed to their current jobs.

5. CONCLUSION
Research indicates that this type of education has a positive effect on economic development
because it provides young people with new opportunities, and employing these people near the
place where they live maintains a positive demographic picture and prevents "brain drain". This
research opens the space for further, deeper analysis of the overall problem of IT sector
development in Croatia with special emphasis on regional development and decentralization.
This can be achieved by continuously monitoring the career paths of newly graduated high
school students and alumni, examining the quality of formal education, and insight into the
economic needs of each region. Such research would certainly help the timely response of state
institutions and the real sector to labor market trends in the IT industry.

ACKNOWLEDGEMENT: Publications of this paper was supported by the University North

to which the authors express their gratitude for the support. The authors would also like to
express their many thanks to professor Ljerka Luić, lecturer of the PhD course Methodological
Approaches in Researching Digital Intelligence in the Media and Communication Area for
support and guidance through the writing of this research paper.

LITERATURE:
1. Dawe, S.; Nguyen, N. (2007). Education and training that meets the needs of small
business: A systematic review of research. National Centre for Vocational Education
Research. Retrived 13.5.2022. from: https://files.eric.ed.gov/fulltext/ED499699.pdf
2. Eurostat (2020). Do young people in the EU have digital skills? Eurostat – European Union.
Retrived 13.5.2022. from: https://ec.europa.eu/eurostat/en/web/products-eurostat-news/-
/EDN-20200715-1?inheritRedirect=true&redirect=/eurostat/en/news/whats-new/
3. Hrvatska gospodarska komora (2021). Analiza stanja hrvatske IT industrije, Zagreb,
Retrived 12.05.2022 from: https://www.hgk.hr/documents/analiza-stanje-hr-it-industrije-
2020-finale61af63d15c67c.pdf
4. Luić, L.; Alić, M. (2022). The importance of developing students' digital skills for the digital
transformation of the curriculum. Retrived 6.5.2022. from: https://www.bib.irb.hr/1173114
5. Luić, L.; Švelec-Juričić, D.; Lasić- Lazić, J.; Šantalab, M. (2020). Planning, managing and
leading the digital transformation of schools. Retrived 6.5.2022. from
https://www.bib.irb.hr/1100266
6. Misko, Josie (2008). Combining formal, non-formaland informal learning for workforce
skill development. National Centre for Vocational Education Research. Retrived 13.5.2022.
from: https://files.eric.ed.gov/fulltext/ED503360.pdf
7. Scientific Foresight Unit (STOA) EPRS | European Parliamentary Research Service (2020).
Rethinking education in the digital age, Brussels: Europe Union. Retrived 13.5.2022. from
https://www.europarl.europa.eu/RegData/etudes/STUD/2020/641528/EPRS_STU(2020)6
41528_EN.pdf
8. Selwyn, N (2016). Is Technology Good for Education?. Cambridge: Polity Press
9. Richters,G.; Forbes (2021). Business For Good: How Companies Can Help Bring
Education To Those In Poverty. Retrived 12.5.2022. from: https://www.forbes.com/
sites/forbesbusinesscouncil/2021/06/03/business-for-good-how-companies-can-help-bring
-education-to-those-in-poverty/

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10. Telegram.hr (2021). U Hrvatskoj će do 2025 biti 127 000 novih poslova u IT sektoru, Zagreb
Retrived 12.5.2022. from: https://www.telegram.hr/partneri/u-hrvatskoj-ce-do-2025-biti-
127-000-novih-poslova-u-it-sektoru-evo-sto-kazu-predvodnici-industrija/

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A STEP CLOSER TO UNDERSTANDING RESEARCH TRENDS IN

THE FIELD OF DIGITAL INCLUSION OF PERSONS WITH
DISABILITIES IN HIGHER EDUCATION: A SYSTEMATIC
LITERATURE REVIEW
Ljerka Luic
University North, Croatia
ljerka.luic@unin.hr

Maja Popovic
University of Zagreb, Faculty of Humanities and Social Sciences, Croatia
maja.popovic@protonmail.com

ABSTRACT
Higher education institutions have a strong potential to encourage society to make significant
changes, preparing individuals for active and responsible participation in society. As one of
the tasks of the higher education system is to take an active role in overcoming the challenges
that affect certain parts of society, especially vulnerable groups, it should be able to provide
equal opportunities for all students. Digital competences in education are crucial today, so the
question arises as to whether sufficient investment is being made into research in this field. The
aim of this paper is to offer a systematic literature review that focuses on two types of research
currently conducted in the field of digital inclusion in education: (i) use and adaptation of
digital educational tools for students with disabilities and (ii) digital competences of teachers.
For the purposes of the research, the method of content analysis of recent scientific papers was
used. The search analysis was conducted from March to April 2022, while the search of papers
in Scopus and Web of Science databases was limited to the period from 2019 to 2022. Terms
used in the search were as following: digital competencies, disabilities, higher education. This
review includes an analysis of existing concepts of digital inclusion of persons with disabilities
in the higher education process as well as proposed methods for assessing digital competencies
of teachers in higher education and pursues three objectives: (i) to describe the concepts of
digital inclusion, (ii) to provide an overview of trends and (iii) to identify challenges in
assessing the digital competences of teachers in higher education related to digital inclusion.
Through consideration of these goals, this paper presents an innovative approach to research
in this field and emphasizes the need to conduct similar research to promote the development
of higher education.
Keywords: Digital competences, Digital inclusion, Higher education, Students with disabilities,
Teachers

1. INTRODUCTION
Importance of education isn't only reflected in the way it upholds individuals in developing
critical thinking and acquiring new sets of problem-solving skills but can also be seen through
the impact they have on the environment and the society in which they participate. Higher
education institutions, in this instance, have a strong potential to encourage society to make
significant changes, preparing individuals to become active and responsible citizens who can
contribute to overcoming local and global challenges. One of the tasks of the higher education
system is to take an active role in overcoming the challenges that affect certain parts of society,
especially vulnerable groups by providing equal opportunities for all students, giving everyone
an equal chance to thrive in today’s social and economic climate. Information and
communication technologies (ICT) have irreversibly changed the way we interact with
technology and have been in the focus of public policies for years.

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In the year 2006, the European Parliament and the Council of the European Union published
Recommendations on key competences for lifelong learning (2006/962/EC), recognizing digital
competence as a set of skills in ICT an individual needs to “retrieve, assess, store, produce,
present and exchange information, and to communicate and participate in collaborative
networks via the Internet” (EUR-Lex, 2006). To identify digital competence and to provide a
common understanding of these skills, EU has developed the Digital Competence Framework
for Citizens (current version DigComp 2.2) – a document that “provides more than 250 new
examples of knowledge, skills and attitudes that help citizens engage confidently, critically and
safely with digital technologies” (Vuorikari, Kluzer, Punie, 2022). The current version of the
document aims to keep DigComp relevant and to serve as a support for different EU policies
and objectives, especially those concerning digital transformation. One of the EU policy
initiatives aimed to prepare and support education and training system for the digital age is The
Digital Education Action Plan (2021-2027). One of the key points of this renewed document
adopted by the European Commission in its efforts for digital transition in Europe (the first
version having been released in 2018) states that the aim is to „offer a long-term strategic vision
for high-quality, inclusive and accessible European digital education”. In this regard, digital
competence has become especially crucial in the context of the European Higher Education
Area, promising a more inclusive setting for vulnerable groups, understanding their right to
obtain education without barriers. Not only do high education learners and teachers need to be
digitally competent to meet the requirements of modern education system, but digital
competence can help overcome certain educational barriers students with disabilities face,
bringing to the forefront development of a high-quality digital education accessible to all
students in the EU. The question arises as to whether sufficient investment is being made into
research in this field and the aim of this paper is to offer a systematic literature review that
focuses on two types of research currently conducted in the field of digital inclusion in
education: (i) use and adaptation of digital educational tools for students with disabilities and
(ii) digital competences of teachers. This review includes an analysis of existing concepts of
digital inclusion of persons with disabilities in the higher education process as well as proposed
methods for assessing digital competencies of teachers in higher education and pursues three
objectives: (i) to describe the concepts of digital inclusion, (ii) to provide an overview of trends
and (iii) to identify challenges in assessing the digital competences of teachers in higher
education related to digital inclusion.

2. METHODOLOGY
The search analysis was performed from March to April 2022 and the search of papers was
carried out in the largest interdisciplinary citation databases: Scopus and Web of Science. The
search was limited to the period from the year 2019 to 2022. Combination of terms used in the
search were the following: digital competence, disabilities, higher education. This literature
review follows the basic idea of the Cochrane Handbook for Systematic Reviews of
Interventions and the following eligibility criteria (Higgins et al., 2019) were determined with
the aim of including and excluding papers from the search:
• Research focused on existing digital educational tools for students with disabilities and
digital competences of the teaching staff
• Critical overviews on the matter of accessibility in the higher education environment
• The target groups were students with disabilities and teaching staff
• Papers had to be available in the open access publishing model
• Research on emotional impact of accessible technologies were excluded from the results
• Non-English-language papers were also excluded from the results

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The initial search generated 903 results (888 results from Scopus and 15 from Web of Science)
and the initial screening consisted of reading the titles and abstracts of these papers and the
selection of relevant papers was based on the eligibility criteria mention above. After the initial
screening, 884 were excluded for either not focusing on digital inclusion of persons with
disabilities in higher education, not being available in the English language or simply having
low relevance of papers based on eligibility criteria. The next phase of the screening included
reading full texts of the remaining 19 papers. After reading these papers, 8 were excluded
because they were focused more on accessibility in the educational environment, rather than
the focusing on digital competences. Of the remaining 11 papers, 2 were excluded because they
were presenting a systematic literature review, and 1 paper was excluded because it dealt
specifically with psychological aspects of loneliness students with disabilities experience in
online learning. Based on the search criteria, the literature screening process produced 8
relevant papers aimed at identifying research trends in the field of digital inclusion of persons
with disabilities in higher education. The 8 papers generated by this search were then analysed
according to the following criteria:
1) Author/s
2) Year published
3) Country
4) Year (data collection)
5) Targeted group (students with disabilities – teaching staff)
6) Sample size (number of faculty members involved)
7) Methodology
8) Assessment method

3. RESULTS
This paper aims to provide an overview of current research trends in the field of digital inclusion
of persons with disabilities in higher education. Out of the 8 papers derived from this search the
majority was published in the year 2021 with one published in 2020 and one in 2022. In order
to get a clear overview of the subject, analysis criteria were developed that included location,
year the study was conducted, targeted groups, number of respondents, methodology and
assessment method used (Table 1.

Year Year data Sample Methodology Assessment

Author/s Country Target Group
published collection size used method
Widyastuti, D.A.R. Students with
2021 Indonesia - - qualitative -
et al. disabilities
Fernández‑Batanero,
J.M. 2022 Spain 2020 - 2021 Teaching staff 2072 quantitative questionnaire
et al.
Silletti, F. Students with questionnaire
2021 Italy 2020 198 quantitative
et al disabilities survey
Medina-García, M
2021 Spain 2020 Teaching staff 142 qualitative online survey
et al.
online survey;
Arslantas, T.K. Students with
2021 Turkey - 60 mixed semi-structured
Gul, A. disabilities
interview
Cabero-Almenara, J.
2021 Spain 2019-2020 Teaching staff 1194 mixed questionnaire
et al.
Students with critical
Boys, J. 2021 UK - - -
disabilities review
Reinholz, D.L. Students with
2021 USA - - - -
Ridgway, S.V. disabilities
Table 1: Summary descriptions of studies according to the analysis criteria
(Source: Authors)

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The research generated papers that were then systematized into 3 main groups: a) research
focusing on digital competence of the teaching staff; b) research focusing on digital competence
of students with disabilities and c) critical overviews outlining the importance of accessibility
in the higher education environment.

3.1. Research focusing on digital competence of the teaching staff

Entirety of the studies in this section were conducted in Spain and all recognized the importance
of use of the ICT and teacher training in higher education, especially amid the COVID-19
pandemic, when both students and teachers had to resort solely to online teaching. This should
not come as a surprise because Spain has introduced the imperative of supporting development
of digital competence into several of its national policies. Data collection in all 3 studies was
carried out either through an online survey or a questionnaire, from 2019/2020 to 2021. Another
interesting thing to note here is that all the studies used a series of criteria from the Cabero-
Almenara et al. (Cabero-Almenara et al., 2021) instrument (a means of measuring the level of
digital competence of teachers). Authors of the first study (Medina-García et al., 2021)
conducted qualitative research on the knowledge teachers on all educational stages have in ICT
and disability and whether that knowledge would increase the use of technology as a teaching
resource and the teacher’s own motivation. Sample included 142 teachers from all educational
stages, 19.7% of which taught at the university level. The results obtained stressed “the
potential of ICT in the education of students with disabilities and the importance of teacher
training in order to ensure inclusion”, as stated by the authors. Both the knowledge about ICT
and disability the increased use of technology as a teaching resource has a positive impact on
the teacher’s motivation. The results also show that teachers at lower education levels have a
better understanding of disability but lack motivation in using ICT in teaching. The next study
(Fernández-Batanero et al., 2022) was conducted with the aim to identify the degree of training
and technological knowledge higher education teaching staff in the use of digital resources to
support students with disabilities. Authors chose a cross-sectional research design (descriptive
and predictive approach) and the sample consisted of 2072 teachers from different higher
education institutions. The results obtained by this study showed teachers have a low level of
digital competences training when it comes to the use of ICT with students with disabilities.
The last study in this section (Cabero-Almenara et al., 2021) was conducted with the similar
goal: to understand teacher’s knowledge on digital resources as a way of ensuring inclusion for
students with disabilities. A non-experimental design was used (qualitative and quantitative
analysis) for this research and 1194 teachers from all educational stages from Andalusia
participated in the questionnaire, 23.7% of which at the university level. The results obtained
showed that the level of digital competence of teachers, though acceptable, need to be higher
in order to ensure inclusion for students with disabilities.

3.2. Research focusing on digital competence of students with disabilities

A study in Italy was conducted (Silletti et al., 2021) with the aim of investigating the perspective
on distance learning of students with disabilities. The sample consisted of 198 Italian university
students with disabilities who had to fill in an online questionnaire and valuate their experience
and perception of distance learning during the COVID-19 pandemic. The data collection was
carried out in the academic year 2019/2020. The results obtained by this research showed
differences of perception depending on the type of disability a student has, but also highlighted
the positives in terms of participation in online activities and the negatives such as being
socially isolated or experiencing technical issues. A study in Turkey (Arslantas, Gul, 2021) was
conducted in order to explore the digital literacy skills of university students with visual
impairment. A mixed methods design was used, collecting both quantitative and qualitative
data through an online survey and semi-structured interviews. Sample included 60 participants.

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The results showed that even though visually impaired students possessed certain digital
literacy skills and their vision wasn’t considered a barrier, they did “face problems in digital
content creation, critical information evaluation, and in working collaboratively”, as noted by
the authors.

3.3. Research and critical overviews outlining the importance of accessibility in the higher
education environment
We cannot have a conversation on inclusive higher educational system without touching on the
subject of accessibility and even though the next 3 critical overviews are putting an emphasis
on the importance of creating a suitable online setting, they also discuss the importance of
creating an accessible physical environment for all students with disabilities. The first paper, a
case study conducted in Indonesia (Widyastuti et al., 2021) focused on the efforts of creating a
quality environment and education approach in the context of higher education and students
with disabilities. It also lists challenges in creating such an environment. This qualitative
research was conducted on the Universitas Atma Jaya Yogyakarta (UAJY) and it included the
Inclusive Participatory Action Research. In order to determine what adjustments need to be
done to make the University more inclusive, students with disabilities were actively involved
in planning, implementing and evaluating the efforts made to do so. The results of this study
highlight that higher education institutions should create a barrier free environment to ensure
accessibility (both physical and virtual) for all students, giving them an active role in
development and decision making. The next two papers present a unique perspective on
disability and accessibility. A critical analysis essay (Reinholz, Ridgway, 2021) focuses on
enhancing accessibility in science, technology, engineering, and mathematics (STEM) teaching
on all educational levels by understanding the concept of access needs as a precursor to equality,
stating that without the proper understanding of a person with a disability and without ensuring
a completely accessible space in which an individual can fully participate, equality cannot be
met. Authors emphasize the importance of normalizing discussions around access needs
because they generally tend to focus more on physical access, ASL interpretation, and screen
reading while leaving needs of other individuals less visible. To illustrate these ideas, authors
discuss different scenarios of access needs in STEM education (disabled and nondisabled
persons in laboratory spaces, classrooms and other spaces). Another critical overview focused
on the higher education practices in the UK during the Covid-19 pandemic (Boys, 2021). The
author observed the quick shift from a physical to an online educational setting and emphasized
how it demonstrated a lack of experience in using technologies efficiently for students and
teachers. However, in order to achieve good educational practices in higher education,
especially for persons with disabilities, old educational norms need to be reviewed “with diverse
learners, teachers, curricula and contexts” in mind, and the time of the pandemic may just be
the right time to start considering these concepts, as stated by the author.

4. DISCUSSION
As stated in the Rome Ministerial Communiqué (EHEA, 2020) document, the pandemic
brought with it a time of crisis that has greatly challenged higher education institutions in
providing socially inclusive learning in terms of ensuring equal access to digital technologies
for learning and teaching. During this time, digital competence gained even greater significance
not just in digital transformation of our societies, but also in understanding the use of ICT as a
medium for learning and teaching in educational environment. All three papers focusing on
digital competence of the teaching staff in the higher education environment conducted
qualitative research (including a cross-sectional research) on the existing knowledge teachers
on all educational stages have in the use of ICT and their understanding of disability and
whether, as seen in the first study, that knowledge would increase a teacher’s own motivation

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in using ICT as a teaching resource. The results of these studies mainly show that, even though
the academic teaching staff has the highest level of knowledge in using ICT in teaching, they
lack a better understanding of disability and how a good quality ICT teaching materials can
contribute to an entirely inclusive education. It is interesting to see how these two concepts are
interrelated. On one hand, digital competence, viewed as an ability to use basic digital tools and
online platforms (Skov, 2016), can be easily achieved by additional education of the teaching
staff. But, on the other, having a better understanding on how students with different disabilities
use these tools presents a bigger problem, especially in the higher education environment. This
brings us to the next two studies focusing on digital competence of students with disabilities
and how they experience and perceive digital educational tools in their academic endeavours.
What both studies have shown is that students will experience different ICT tools in teaching
depending on the disability they have. This is a clear indication that in order to ensure
inclusiveness in higher educational institutions, students with disabilities should actively
participate in creation and/or adjustment of these tools. Another very important issue can be
observed here is the fact that, certain tools, in this case distance learning, can heighten social
isolation which is also one aspect of ICT that must be taken into account when developing these
tools. The last research and the additional two critical overviews are focusing on the importance
of accessibility in the higher education environment. The first study brings to the front Inclusive
Participatory Action Research, emphasizing the importance of including students with
disabilities in decision making around the concept of inclusion in the higher education
environment. An interesting matter the first critical overview touches on is the fact that
researchers tend to focus on only one type of a disability, according to which an assumption
could be made that disabilities in general could also be viewed through trends. Whichever
disability resonates most in the public space will be the disability covered by the future studies.
The last overview in a way sums up this literature review. The author in this lengthy essay
explains how the education system during the covid-19 pandemic was caught unprepared in
delivering accessible content to students with disabilities, and how it demonstrated exactly
where the weaknesses are and how to continue forward after the pandemic, with the emphasis
on “how to improve curricula, resources, modes of delivery and student experiences”, as stated
by the author.

5. CONCLUSION
This literature review has been conducted on a smaller sample in order to attain a general
overview of current research trends in the use and adaptation of digital educational tools for
higher education students with disabilities and digital competences of educational
professionals. The papers obtained by this review were all conducted and published in the years:
2020, 2021 and 2022, during the Covid-19 pandemic. What is evident from this literature
review is that there needs to be a better understanding on how teacher motivation is connected
not only to ICT, but also how it correlates to the matter of inclusion of students with disabilities,
what the limiting factors are not just in higher education, but on all levels of learning. What the
latest research showed is that teachers in general have an acceptable to a low-medium level of
technological training and focus needs to be redirected in this area. On the other hand, in order
to understand what impact digital competence has and how it can contribute to a more inclusive
environment for vulnerable groups, we first need to understand how these groups or in this case,
persons with disabilities, perceive and use technologies. Only when a clear understanding of
the advantages and disadvantages of what is considered good quality education material is
established and how students with different disabilities interact with the technological
infrastructure will the development of higher education be able to rise to the challenge of
ensuring inclusive education to all.

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ACKNOWLEDGEMENT: Publication of this paper was supported by the University North,

to which the authors of the article are grateful for substantial support.

LITERATURE:
1. Arslantas, T.K., Gul, A. (2022). Digital literacy skills of university students with visual
impairment: A mixed-methods analysis. Education and Information Technologies 27, 5605–
5625. https://doi.org/10.1007/s10639-021-10860-1
2. Boys, J. (2022). Exploring Inequalities in the Social, Spatial and Material Practices of
Teaching and Learning in Pandemic Times. Postdigital Science and Education 4, 13–32
3. Cabero-Almenara, J., Guillén-Gámez, F.D., Ruiz-Palmero, J., Palacios-Rodríguez, A.
(2021). Teachers' digital competence to assist students with functional diversity:
Identification of factors through logistic regression methods. British Journal of Educational
Technology 53;41-57
4. Digital Education Action Plan 2021-2027 Resetting education and training for the digital
age. (2020). Official Journal of the European Union, 52020DC0624. Retrieved 26.04.2022
from https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52020DC0624
5. Fernández-Batanero, J.M., Cabero-Almenara, J., Román-Graván, P. et al. (2022)
Knowledge of university teachers on the use of digital resources to assist people with
disabilities. The case of Spain. Education and Information Technologies.
https://doi.org/10.1007/s10639-022-10965-1
6. Higgins, J.P.T. et al. (2019). Cochrane Handbook for Systematic Reviews of Interventions.
2nd Edition. Chichester (UK): John Wiley & Sons.
7. Medina-García, M., Higueras-Rodríguez, L., García-Vita, M.M., Doña-Toledo, L. (2021)
ICT, Disability and Motivation: Validation of a Measurement Scale and Consequence
Model for Inclusive Digital Knowledge. Int. J. Environ. Res. Public Health, 18, 6770.
8. Recommendation of the European Parliament and of the Council of 18 December 2006 on
key competences for lifelong learning. (2006). Official Journal of the European Union,
32006H0962. Retrieved 28.04.2022 from https://eur-lex.europa.eu/legal-content/EN/
TXT/?uri=celex:32006H0962
9. Reinholz, D.L., Ridgway, S.W. (2021). Access Needs: Centering Students and Disrupting
Ableist Norms in STEM. CBE—Life Sciences Education 20 (3).
10. Rome Ministerial Communiqué: 19 November 2020. (2020). EHEA. Retrieved 20.04.2022
from http://www.ehea.info/Upload/Rome_Ministerial_Communique.pdf
11. Silletti, F. et al. (2021). Distance learning in Higher Education during the first pandemic
lockdown: The point of view of students with special educational needs. Qwerty, 16(2), 30-
46.
12. Skov, A. (2016). What is Digital Competence? Retrieved 22.04.2022 from https://digital-
competence.eu/dc/front/what-is-digital-competence/
13. Vuorikari, R., Kluzer, S., Punie, Y. (2022). DigComp 2.2: The Digital Competence
Framework for Citizens: with new examples of knowledge, skills and attitudes. Retrieved
26.04.2022 from https://publications.jrc.ec.europa.eu/repository/handle/JRC128415
14. Widyastuti, D-A-R., Prihandono, B.K., Pramudyanto, A.B., Rudwiarti, L.A. (2021). A
Participatory Culture for Developing an Inclusive Environment in Higher Education.
Journal Ilmu Sosial dan Ilmu Politik, 25 (2). https://doi.org/10.22146/jsp.63048

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CAUSAL RELATIONSHIP BETWEEN DIGITAL INTELLIGENCE

QUOTIENT AND THE DIGITAL ECONOMY AND SOCIETY INDEX
Marija Dusevic
University North, Croatia
madusevic@unin.hr

ABSTRACT
By communicating the activities of the European Union (EU) to the community in which they
operate, 424 EUROPE DIRECT centers are extended hand of European institutions in the 27
member states. These centers, although operating in different social contexts, transmit the same
messages to local communities, using digital communication channels. The purpose of this
paper is to investigate the causal relationship between the Digital Economy and Society Index
(DESI) of the EU states and the level of digital intelligence of the managers of these centers.
The aim of this paper is to present the cause-and-effect relationship of the country's position
on the DESI and the level of digital intelligence of the managers through the analysis of digital
competence "Public and mass communication". This competence was chosen because the main
role of these centers is to communicate. Does a higher index of digitalization of society means
a higher level of observed competence, which then affects a higher quotient of digital
competences - is a question that defines the analyzed problem. The research was conducted
using the online survey on a sample of 136 managers, based on which indicators of digital
competences in the observed competence were obtained at the level of each of the states. The
sample of research consists of the managers, because each center must have a menager. In
accordance with the obtained results, a causal relationship was established between the
position of the state on the DESI and the analyzed digital competencies of the managers. The
conclusions of this paper are an indicator of the relationship of the analyzed digital intelligence
competence of the sample with the position of the state on the DESI, further research on digital
intelligence of EUROPE DIRECT teams would provide a more comprehensive insight into the
causal relationship.
Keywords: DESI, Digital competencies, Digital intelligence, Public and mass communication

1. INTRODUCTION
Transmitting default information about the European Union is one of the main roles played by
EUROPE DIRECT centers in EU member states. According to the description, the active role
of the EUROPE DIRECT centers is to help bring the European Union closer to its citizens.
Their task is to provide answers to questions or refer interested citizens to relevant points to
find information on EU policies, programs and priorities. In addition, they should proactively
work with citizens and stakeholders to strengthen their sense of European belonging (European
Union, 2021). Using Shannon's model of communication (Shannon, 1948) in the analysis of the
communication of EUROPE DIRECT centers and their comparison, their constant is, apart
from the name, diversity. EUROPE DIRECT it is not an independent organization, it can be a
part of public institutions, civil society organizations, educational institutions or, for example,
regional organizations or local communities. The channel through which the message will be
transmitted is not given, the audience (recipients of the message) also differs. The
communication process is also exposed to various noises. Different contexts and circumstances
of work, and thus communication circumstances at each of the EUROPE DIRECT centers, were
also pointed out in the Mid-term evaluation of the Europe Direct Information Centers
(Kitchener, Ulcica, Bywater, Zotou, 2016). At the same time, all EUROPE DIRECTs must
convey the European message to the environment in which they operate. In the 21st century,
especially in pandemic circumstances, this communication is largely digital.

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European institutions such as the European Commission and the European Parliament have
recognized digital technologies as enormous growth potential for Europe (European
Commission: Digital transition). The European Commission's published document "2030
Digital Compass: the European way for the Digital Decade" (European Commission, 2021)
with the Commission's concrete plan to achieve Europe's digital transformation by 2030. The
digitalization process does not take place in only one sphere, for example only in the economy,
it encompasses the whole of society. An integral part of the digitization process is the process
of systematizing digital skills, knowledge and attitudes of individuals. European Union
Publication The Digital Competence Framework for Citizens. DigComp 2.2. (2022) “provides
more than 250 new examples of knowledge, skills and attitudes that help citizens engage
confidently, critically and safely with digital technologies, and new and emerging ones such as
systems driven by artificial intelligence (AI)” (Vuorikari, Kluzer, Punie, 2022). Broader
concept than digital competence, is the concept of digital intelligence. Extensive definition and
clarification of digital intelligence is provided by The DQ Institute, an international think-tank
with a mission to “set global standards for digital intelligence that ensures safety,
empowerment, and well-being of individuals, organizations, and nations in the digital age” (DQ
institute). The DQ framework was created by Dr. Yuhyun Park and presented in the publication
The DQ Global Standards Report 2019 (Park, 2019). This model consists of 24 competencies
that define an individual's level of digital intelligence. At the same time, digitalization leads to
the erasure of the boundaries defined in the previously mentioned Shannon communication
model, because a clear boundary between sender and receiver is lost, but the emphasis is on
interaction (Škoda, Luić, Brlek, 2020). All this puts a great responsibility on the managers of
the EUROPE DIRECT centers, who have to adapt to new circumstances. Similarly, school
principals who, as responsible persons, have to adapt to new circumstances regardless of their
level of digital competence (Svelec-Juričić, Luić 2021) and center managers have to adapt in
order to be able to do their job. The mentioned diversity of circumstances in which the centers
operate is also reflected in the position of the EU member state on the DESI. By definition "the
Digital Economy and Society Index (DESI) summarizes indicators on Europe's digital
performance and tracks the progress of EU countries" (European Commission: The Digital
Economy and Society Index). This model was introduced in 2014 by the European
Commission. By then, each year, DESI includes country profiles which support Member States
in identifying areas requiring priority action as well as thematic chapters offering a European-
level analysis across key digital areas, essential for underpinning policy decisions. The aim of
this paper is to test the cause-and-effect relationship of the country's position on the DESI index
and the level of digital intelligence of EUROPE DIRECT centers managers through the analysis
of digital competence "Public and Mass Communication" from the previously mentioned DQ
Institute model. This competence implies that individuals have knowledge, skills and attitudes
about the way of working and using online communication channels and that they use them. As
the main role of the EUROPE DIRECT centers is to communicate, this competence was
intended as a logical choice for analysis. The question that arises is the relationship between
the DESI and the level of observed competence, whether the higher competence of individuals
conditions the higher level of the DESI of the country. Based on this, a research hypothesis was
defined which claims that the levels of digital intelligence of the managers of EUROPE
DIRECT centers affect the DESI of the EU member state.

2. METHODOLOGY
The research was conducted using the online questionnaire method on a sample of EUROPE
DIRECT center managers. According to the program rules of the EUROPE DIRECT network,
each center must have a manager, while other jobs / positions are filled in accordance with local
needs.

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Therefore, the position of the manager was taken as a sample because it is unambiguous and
exists in all centers. The online survey questionnaire was created using the Google form. The
survey was available to participants from April 22 to May 3, 2022. The link to the survey was
sent to the publicly available official addresses of 424 EUROPE DIRECT centers with a request
for managers to fill out a questionnaire. The population were the managers of EUROPE
DIRECT centers in EU member states, and the sample consists of 136 managers who filled out
a survey. In the introduction to the survey, participants were introduced to the purpose of the
survey where it was pointed out that the survey is used to investigate the causal link between
DESI of the EU member state and the level of digital competence of EUROPE DIRECT
managers. The research was voluntary and anonymous, but it was announced that the
dissemination of research results is expected in the form of a scientific article and oral
presentation to the scientific, academic and general public. The terms used in this research,
which have a gender meaning, are used neutrally and refer equally to males and females. The
questionnaire consisted of 6 questions, and all questions were structured with offered answers.
The first three relate to demographic characteristics (gender, age, country in which they work)
of the participants, and the other 3 questions relate to their self-assessment of digital
competence in the segment of public and mass communications, practice and digital
competencies in the use of different communication channels, and the frequency of use of
digital channels. The self-assessment scale was created according to European Framework for
the Digital Competence of Educators: DigCompEdu (Punie, Redecker, 2017).

3. RESULTS
During the research, out of 424 EUROPE DIRECT, answers were received from 136 of them.
In order to test the research hypothesis on how the level of digital intelligence of the manager
of the EUROPE DIRECT centers affects the Digital Economy and Society Index (DESI) of the
EU member state, four independent variables were set: gender, age of participants, country and
self-assessment of digital competence in the segment "Public and mass communication".
Females make up a significantly higher share of the sample (93 participants), compared to Male
(42 participants) and one person who does not want to declare herself.

1%

31% Female
Male
68%
I do not want to answer

Figure 1: Distribution of participants by gender

(Source: Authors research)

Based on year of birth, participants were divided into two groups according to Prensky’s
dichotomy (Prensky, 2001) - Digital immigrants (born between 1955–1979) and Digital natives
(born between: 1980–1998). The oldest participant was born in 1955, and the youngest in 1998,
while 1980, according to Prenskie's theory, is taken as the dividing line between the two groups.
The number of participants from both groups was equal, with a slightly higher number of digital
natives (70 versus 66).

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49%
Digital immigrants (born
51% between 1955. - 1979.)
Digital natives (born between:
1980. - 1998.)

Figure 2: Distribution of participants by age

(Source: Authors research)

The network of the EUROPE DIRECT centers is distributed in all 27 countries of the EU. The
number of centers in a member state is determined by its size and therefore the number varies
from country to country. The sample includes managers from 24 member states who
participated in the survey. A comparison between the number of EUROPE DIRECT centers
and the number of participants is shown in Figure 3.

50 48 48
45
45
40 37
35
30
25 23 24 24 24

20 17
15 15 15
15 13 12 12 12 12
10 9 10 11
8 8 8 7 9 9 8
10 7 6
5 5
2 3 3 3 43 3 3 3 3 3 3
5
0 1 1 1 1 0 1 0 1 2
0
Romania
Slovakia
Slovenia
Latvia

Poland
Bulgaria

Finland
France

Greece

Luxembourg
Estonia

Hungary

Italy
Czechia

Malta

Spain
Netherlands

Sweden
Austria
Belgium

Croatia
Cyprus

Denmark

Germany

Ireland

Lithuania

Portugal

Number of EUROPE DIRECT's Number of participants

Figure 3: Geographical distribution of participants

(Source: Authors research)

The scale of the self-assess of current digital competencies in the Public and Mass
Communication was created in the range form A1 to C2 (A1 was the lowest and C2 the highest
level of self-assessment of current digital competence). None of the participants estimated that
they were at the A1 level, while the largest number of them thought that they were at various
B1 (47 participants) or B2 (51 participants).

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A1: Beginner - I realize that digital technologies can

improve my work as the manager of the EUROPE
0% DIRECT Center

3% A2: Researcher - In my work as the manager of the

11% EUROPE DIRECT Center, I tried to apply digital
technologies
14%
B1: Experimenter - I regularly apply digital
technologies in my work as a manager of the
EUROPE DIRECT center
35%
B2: Expert - I apply digital technologies with
37% confidence and critically in order to improve my
work as the manager of the EUROPE DIRECT
center.
C1: Leader - I apply digital technologies in strategic
ways and share my expertise with my online
audience and colleagues

C2: Poneer - I am launching strategic and

innovative ways to apply digital technologies in my
business community and beyond

Figure 4: Self-assess of current digital competencies in the Public and Mass Communication
(Source: Authors research)

4. DISSCUSION
The presented results were placed through statistical analysis in relation to the Digital Economy
and Society Index (DESI) of each member state. In order to check the contribution of the age
of the participants and the self-assessment of digital competence to the prediction of the DESI,
a multilevel (two-level) regression model of random segments was calculated. This model was
chosen because of the structure of the data itself. Namely, since the managers of centers from
different countries participated in the research, and that several managers of centers participated
in each country, the data structure is hierarchical. That is, participants are nested within the
state. Therefore, the application of a multilevel model is needed to control the dependence of
data within a particular cluster (country) when estimating parameters. The analyzes were
conducted in the statistical package Mplus6.1 (Muthén and Muthén, 1998-2011). Data are
clustered according to the country they come from. All variables in the analysis were treated as
continuous. Parameter estimation was performed using the maximum likelihood robust
algorithm (MLR). Given that the criterion variable included in the analysis was the DESI
measured at the state level, the predictive contribution of participants age (measured as year of
birth) and their self-assessment of digital competence (A1-C2 level) was calculated at the state
level and L2 level. Also, at the level of participants (L1), the correlation between age and self-
assessment of digital competence was calculated. A total of 18 clusters (states) with 130
participants were included in the analysis. Countries with only one participant were excluded
from the analysis because it was not possible to assess variability within the cluster. Recorded
values of intraclass correlation coefficients (ICC) for age variables (.19) and self-assessment of
digital competence (.12) indicate that 19% of variability in age of participants can be explained
by variability between countries, for example - that 12% of variability in self-assessment of
digital competence of participants can be explained by variability between states. This justifies
the application of a multilevel regression model as a method of data analysis.

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The results of the analysis indicate that the age of the participants (β = .34, SE = 1.11, p> .05)
and self-assessment of digital competence (β = -.25, SE = 1.21, p> .05) are not statistically
significant predictors of the DESI. Also, the age of the participants and the self-assessment of
digital competence (at the L1 level) were not statistically significantly related (r = 0.30, SE =
0.30, p> .05). When interpreting the results, a relatively small number of clusters (N = 18)
should be taken into account, as well as a small number of participants per cluster (M = 7.2).
Therefore, the estimated standard errors of the parameters are relatively high, which reduces
the statistical power of the test, for example - the probability of detecting the effect when it is
really present. An undetermined correlation led to the conclusion that there is no cause-and-
effect relationship between self-assessment of digital competence and the DESI. The non-
existence of a cause-and-effect relationship is also shown through Figure 5. A comparison of
DESI and the arithmetic mean of the self-assessment is graphically presented. A numerical
value was added to the self-assessment scale from A1 to C2. Answer A1 = 1, A2 = 2 and so on
up to C2 = 6. Then the answer values at the country level are summed and this number is divided
by the number of participants. The obtained arithmetic value was compared with DESI.

80.00 5.00

70.00 4.50
4.00
60.00
3.50
50.00 3.00
40.00 2.50

30.00 2.00
1.50
20.00
1.00
10.00 0.50
0.00 0.00

DESI Arithmetic mean

Figure 5: Digital Economy and Society Indeks and Arithmetic Mean of the Self-assessment of
digital competence
(Source: European Commission. (2022). Digital Economy and Society Index (DESI) 2021
Thematic chapters and authors research)

The disadvantage of this research, which contributed to the impossibility of noticing the cause-
and-effect relationship, is certainly the fact that a cross-sectional study was done through data
collection at one point in time. A limitation of the research is certainly the fact that the
participants are people who use computers and digital tools in their daily work, and it is to be
assumed that they do not reflect the national average of DESI. Future research should certainly
encourage the participation of a larger number of participants and all employees, not just the
managers of EUROPE DIRECT centers. In further research on digital intelligence of EUROPE
DIRECT teams, other competencies should be taken into account in order to gain a broader
insight into the possible existence of a causal relationship.

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5. CONCLUSION
Communication is the main activity of EUROPE DIRECT centers, the model and method of
communication is decided by the managers of the centers. Given the public role of the centers
and the fact that it seeks to reach as wide audience as possible, almost all communication
between EUROPE DIRECT centers is public and mass, and largely mediated by digital
channels and considering the importance and emphasis the EU places on digitalization, this
segment is expected to continue to grow. As digitalization increases, so does the structure of
the Member State's annual Digital Economy and Society Index. The digital competencies of the
managers of EUROPE DIRECT centers certainly have a segment in this process - What kind?
By what influence? Under what circumstances? - these questions and unknowns are the basis
for further research. Although this research did not show a cause-and-effect relationship
between self-assessment of digital competence and the DESI, this research has shown that
assumptions that are not based on data but on impression are easily refuted by science and
statistics and easily shown to be wrong.

ACKNOWLEDGEMENT: The publication of this paper was supported by the University of

the North, to which the author thanks for their support. The author also wishes to thank
Professor Ljerka Luić, holder of the doctoral course Methodological Approaches in Digital
Intelligence Research in the Media and Communication Field for the great opportunity, words
of encouragement, unquestioning dedication, constant availability, invaluable support and
valuable advice.

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107466.

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11. Shannon, C. E. (1948). A Mathematical Theory of Communication. The Bell System

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EDUCATION LEVEL EFFECT OF URBAN DIGITAL IMMIGRANTS

TOWARDS THE LEVEL OF THEIR DIGITAL LITERACY
Domagoj Topic
University North, Croatia
dotopic@unin.hr

Marko Antic
University North, Croatia
marantic@unin.hr

Josipa Brkic
University North, Croatia
jobrkic@unin.hr

ABSTRACT
Individuals born prior to the widespread use of digital technology and the digital era are faced
with the adaptation challenge to the digital technologies-based tools used in everyday life.
Named individuals, considering their forced transition to the digital era, are so called Digital
Immigrants. Its members, living in the urban, city territories, are defined as Urban digital
Immigrants. Subject of this paper is to consider and review the Urban Digital Immigrants
adaptation differences to the digital era according to their education level. Research will
establish if the educational level affects the level of digital literacy of those called Urban digital
Immigrants. Research subject is the level of digital literacy of the population with any
knowledge and use of digital skills, that has lived a specific life span without the modern
technology interference. For the research sample size Urban Digital Immigrants were chosen,
persons born prior to 1985, currently in the working population, up to age of 65, living in four
largest urban centres in the Republic of Croatia. Nationally representative probability samples
were calculated according to the final population census, distributed in equal proportions men
and women, and evenly distributed by the age. Research was conducted via an online
questionnaire distributed to the targeted population via Facebook social network. Research
results show the connection between the level of the education and the level of digital literacy
of the Urban digital Immigrants in the process to the digital era adaptation. New contribution
to scientific research has been given on the impact of knowledge, skills and experience gained
through predefined educational systems to a future life of the individuals that can be used as a
guideline for possible research into the national qualifications frame.
Keywords: Digital immigrants, Digital intelligence, Digital literacy, Education level

1. INTRODUCTION
Individuals born prior to the digital era are faced with continuous challenges of digital
technologies-based tools in everyday life. Named population, considering their transition to the
digital era are defined as digital immigrants - terms “digital immigrants” as well as “digital
natives” are developed by Prensky (2001) defining digital immigrants as individuals born prior
to the digital technology development, while “digital natives” are individuals born after
implementation of digital technologies ergo being exposed to the digital technologies influence
in earlier life stages, mostly since birth. New (digital) tools and devices usage in today's life
have many advantages compared to traditional, regardless to the demographic, social and
economic differences, and individuals are required to develop adequate skill level in order to
actively participate in their usage (Reddy et al., 2020). Precisely, the capability of the individual
in using digital technologies and tools in everyday life aiming for the constructive social activity

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was defined by Martin (2006) as digital literacy. Next to the capability of digital literacy, he
states that views, attitudes and awareness of digital use, therefore digital literacy concept cannot
be defined as permanent rather than temporary achievement especially if deprived of the
continuous improvement of literacy constantly beeing attentive to changes of the environment
one lives in. Eshet-Alkalai (2004) states that digital literacy can be defined as a skill necessary
for the digital era survival. Digital literacy in today’s world is an essential link in private life
and public/business career of every individual, for it by itself provides competitiveness in the
labour market, contemporary education, but also social engagement. In the paper „The
importance of digital literacy in the labour market“ by Bejakovic and Mrnjavac (2020) it has
been established that there is a strong link between digital skills and employment rates, and the
research indicates that the 54-65 years old population is required access to at least minimum
level of digital literacy to avoid digital and social exclusion. According to DESI analysis (The
Digital Economy and Society Indeks, 2018), every other person in Croatia is deprived of
suitable digital knowledge and skills allowing them to create competitive value on the labor
market. Digital literacy has high importance within the education. Best example can be
described during the Covid-19 pandemic where many educational institutions embraced digital
curriculum whereas with the pandemic experience special attention has been brought to the
need of flexibility, but also the quality of the teaching (Skoda and Luic, 2020). However, and
regardless of the pandemic, Skoda et al. (2021) states that, because of the growing digital
education transformation trend more classes will take place online, through informational and
communication technologies. Besides personal education, having a minimum level of digital
literacy is important for the individuals in regards of their children's upbringing for digital
literacy provides active participation in the teaching-learning process as well as in
communication with educational institutions. In the research conducted by Brlek et al. (2019)
new media impact to social skills has been examined. Results showed that new media impact
in inevitable, and time spent with peer mates is replaced with media and technology. Authors
are stating that is of great importance of the parents' involvement in time spending with their
children and media. As an example of deprivation of social exclusion cases of psychophysically
limited individuals can be used, where digital technology and digital literacy enables
communication with other individuals and institutions. Zovko and Celizic (2020) emphasise
the importance of internet usage using the example of mobility deprived older and mature
individuals. Authors are stating that using digital tools can ease financial burden issues
(example: on-line banking system), whilst online shopping can also be of great help for the
elderly population. Digital technology usage within the elderly population can make them feel
useful and content lowering the sense of social isolation and exclusion. This paper object is to
review the differences in digital era adoption of the Urban Digital Immigrants according to their
level of education, and the research will determine whether the educational level has the impact
to the level of digital literacy of the mentioned group. Not all people are prone to changes, but
there is a characteristic moment in the digital age proving that there is no alternative but to
adopt. It is not the question if someone is prone to changes more or less, but the necessity of
the change acceptance for the individual can actively participate in everyday society as the
zealous member. Research will conclude to what level did the digital immigrants adopted
considering the educational level, and based on stated the hypothesis has been formed: Croatian
digital immigrants’ level of digital literacy is in positive correlation with their education level.

2. METHODOLOGY / MATERIAL AND METHOD

Research was conducted on the sample of urban digital immigrants, specified ad individuals
born prior to the year 1985., working population up to the age of 65 years considering the higher
limit of the retirement in the Republic of Croatia, excluding the working population beyond
named limit), living in four largest urban areas in the Republic of Croatia.

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In the account was taken that the sample was distributed in urban areas in the Republic of
Croatia through the cities as followed: Osijek - representing urban area of East Croatia, Zagreb
- as urban area of Central Croatia, Split- as representative of urban area of South Croatia and
Rijeka - as urban area representative of West Croatia. Nationally representative probability
samples were calculated according to the final population census, distributed in equal
proportions men and women, and evenly distributed through the years of age. As a measuring
instrument, a survey was developed for the needs of this research, formed in a questionnaire
consisting of 28 questions. First five questions were classification/elimination questions
defining socio-demographic factors, such as sex, location, age and education level, but
additionally time each respondent is spending in using digital tools, mainly smartphones and
computers/laptops limited to answers: 1-3 hours, 3-5 hours, 5-7 hours, 7-9 hours and Other…
The remaining 23 questions were formed to evaluate respondents’ digital literacy using one
way 6 points Likert scale. Each question had one commonly used and widely accessible digital
activity, formed in a claim, asking respondents to self-report and evaluate their personal level
of competence marking one of 6 points, whereby point 1 defines that the respondent cannot or
does not know how to complete the activity, whilst point 6 defines that the respondent not only
knows how to use the activity but can easily teach and transfer his knowledge to others helping
them to independently use the activity. Activities are presented by the elements requiring
minimal digital literacy therefore involvement of questions/claims of on-line systems usage
such as banking and health care system, using smartphones applications (such as GPS, search
engines etc.), as elements of activities commonly used in everyday business activities such as
virtual meetings, sending, receiving and storing data files. A detailed questionnaire is available
on demand. Points were specified as follows: 1 I cannot do that, 2 - I need help in doing that, 3
- I sometimes can do it by myself, 4 - I can usually do it by myself, 5 - I can always do it by
myself, 6 - I can teach others to do it. Considering the scale used to grade the answers, the
higher the number of the points marks the higher level of digital literacy. Therefore, digital
literacy evaluation was scored in the following manner: 0-50% - insufficient knowledge (Level
1), 51-70% Basic knowledge (Level 2), 71-85% Satisfactory knowledge (Level 3), 86-95%
High-level knowledge (Level 4), 96-100% Top-level knowledge (Level 5). Knowledge level
was calculated as arithmetic mean of all question- s required in the survey. Points were defined
by the percentage rate of required questions. Among the questions/claims five control
questions/claims were used, that were, in case of opposite answers, scored with the minimum
(1). Research questions were distributed via an online questionnaire using social networks,
targeting specific locations (Zagreb, Split, Osijek and Rijeka) and required socio-demographic
factors of the respondents. Participation of the respondents was voluntary and anonymous.

3. RESULTS
Total of 53 valid respondents were born prior to the year 1985., of which 30 were female
respondents (56,60%) and 23 (43,40%) were male respondents. By the location, the most
represented sample number is Zagreb with a total of 30 respondents (56,60%), followed by
Split with a total of 11 respondents (20,75%), Osijek with a total of 9 respondents (16,98%)
and Rijeka with a total of 3 respondents (5,66%). According to the age, respondents are
classified in three age groups: 1975-1984; 1965-1974; 1964. and older. First group consist of
respondents born from 1975. to 1984., currently aged between 38-47 years of age, in total of 29
respondents (54,72%). The second group is consisting of respondents born from 1965. to 1974.,
current age 48-57 years old, totalled 14 respondents (26,42%). The third group are respondents
born in 1964. and older, aged more than 58 years old, 10 respondents in total (18,87%). The
level of respondents' education is classified and formed in Table 1.

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Education level Number of respondents (N) Respondents percentage (%)

High-school education 17 32,08
Bachelor's degree 15 28,30
Master’s degree 15 28,30
Postgraduate study 6 11,32
Table 1: Education level of Urban Digital Immigrants
(Source: own research)

The questionnaire predicted a group with primary school education respondents, but none of
the participants with that level of education participated which is a possible indicator of
extensive Urban Digital Immigrants population coverage with minimum high-school education
level, at least the part of the Urban Digital Immigrants with minimum level of digital literacy
capable of completing the questionnaire. Urban Digital Immigrants educational level using sex
analysis indicate that there is a difference in the respondents education level, showed in Graph
1.

Graph 1: Education level of Urban Digital Immigrants by sex

(Source: Authors’ research)

Categories with the higher level of education (Masters and Postgraduate degree) are highly
more represented in female population rather than male. Female respondents with Masters and
Bachelor degree are most represented in the study, whilst Male respondents higher sample is
within Bachelor degree level and high-school degree level. Table 2. is showing digital literacy
scoring representation by the education level of Urban digital Immigrants.

Table following on the next page

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Education level / Digital Score 1 Score 2 Score 3 Score 4 Score 5

literacy score

High-school education 47% 18% 29% - 6%

Bachelor's degree 13% 60% 27% - -

Master’s degree 13% 20% 33% 27% 7%

Postgraduate study degree - - 17% 50% 33%

Table 2: Digital literacy coring representation according to the education level of Urban
Digital Immigrants
(Source: Authors’ research)

There is a higher share of respondents with lower education level scoring lower on digital
literacy and within the respondents with the higher level of education scoring is higher. The
average digital literacy level score indicates towards the correlation between the level digital
literacy and urban digital immigrants’ education level. This can be observed in Table 3.

Education level Average Score

Postgraduate study degree 4,17

Master’s degree 2,93

Bachelor's degree 2,13

High-school education 2,00

Table 3: Urban digital immigrants’ digital literacy average scoring level
(Source: Authors’ research)

There are additional findings to the analysis showing that the average scoring of the digital
literacy is dependent on the age category. Respondents born form 1975.-1984. scored on the
average 2,86, while those born from 1965.-1974. scored on the average 2,43. Respondents born
from 1964. and older, scored on the average 1,80. Comparing the respondents average score by
sex, female respondents scored higher than males. The average urban digital immigrants’
females scoring on digital literacy was 2,83 while the same among male respondents was 2,17.
Total average score on all respondents, regardless of age, sex or education level is 2,55.

4. DISCUSSION
Research has measured the level of digital literacy of urban digital immigrants in way that all
the respondents, regardless of their education level, completed the same survey to test the digital
literacy level. Results showed that the higher scoring was obtained within the respondents with
the higher education level, meaning that higher education level of digital immigrants is
increasing the total average score of digital literacy level. By this conclusion the hypothesis:
Croatian Digital immigrants’ level of digital literacy is in positive correlation with their
education level is confirmed. In addition, results have shown major differences presence in
between to extreme groups - respondents with postgraduate degree and those with high-school
degree. Almost half of the respondents (47%) with the high-school degree scored 1, that is the
lowest score possible, and none of the postgraduate degree respondents scored 1.

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At the same time, one third of the respondents (33%) with the postgraduate degree scored 5,
and only 6% with high-school diploma scored the same. Even though the survey predicted,
there were no respondents with only primary school degree, and considering the expressed
positive correlation between the education level and digital literacy level of urban digital
immigrants, the conclusion sets is the lack of named group digital literacy required to complete
the survey. Apart from the degree, major impact is perceived within the age of the respondents.
Therefore, only the youngest of the respondents (aged 38-47) scored above the average results,
while the age of the respondents is rising, the average scoring in digital literacy is descending.
This research is showing an adoption of digital immigrants to the digital era, so Zovko and
Celizic (2020) are stating that even though they encountered digital technology in late or mature
age, many elderly and mature age citizens could not imagine their life without it. Speed in what
digital era is changing and developing, and especially the necessity of lifelong and continuous
learning and additional adaptations is still a great issue for digital immigrants for they are aging
and that makes it harder to keep up with the times. Bejakovic and Mrnjavac (2020) states that
the Government, Educational institutions and employers should consider conceptualizing new
forms of digital literacy assessment, but also implement intervention programs especially those
designed for digital skills improvement.

5. CONCLUSION
Research results have shown the connection between education level and digital literacy level
of urban digital immigrants in the process of digital era adoption, giving the contribution to
scientific research on the impact of knowledge, skills and experience achieved through
predefined educational system to the future life of individuals, that may be used as guidelines
for future national classification frame researching. However, in the expectations that the digital
era is far from its end, it is, by this research, of great importance to emphasize the importance
of continuous upgrade to one's digital literacy. It cannot be expected that the individual will by
him/herself be aware of the possible level drop in digital literacy, therefore the adult digital
literacy program and support should be one of the priorities hoping to avoid national illiteracy
in the future to come.

ACKNOWLEDGEMENT: Publications of this paper was supported by the University North

to which the authors express their gratitude for the support. The authors would also like to
express their many thanks to professor Ljerka Luić, lecturer of the PhD course Methodological
Approaches in Researching Digital Intelligence in the Media and Communication Area for the
selflessness and continuous guidance throughout the entire paper. We hope to live up to the
expectations through this and further work and contribution to the Academic community.

LITERATURE:
1. Bejaković, P., & Mrnjavac, Ž. (2020). The importance of digital literacy on the labour
market. Employee Relations: The International Journal, 42(4), 921–932.
2. Brlek, E., Luić, L. & Škoda, J. (2019). The Role of New Media in Building Social Skills of
Students With and Without Disabilities. U Bago, P., Hebrang Grgić, I., Ivanjko, T., Juričić,
V., Miklošević, Ž. & Stublić, H. (ur.) INFuture2019: Knowledge in the Digital Age
3. Eshet-Alkalai, Y. (2004). Digital literacy: A conceptual framework for survival skills in the
digital era. Journal of Educational Multimedia and Hypermedia, 13(1), 93-106.
4. Indeks digitalnoga gospodarstva i društva za 2018., Izvješće za Hrvatsku.
https://ec.europa.eu/information_society/newsroom/image/document/2018-20/hr-desi_201
8-country-profile-lang_4AA68303-07F6-BC37-A21420BFD9CDDBA2_52346.pdf.
Preuzeto: 20.04.2022.

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5. Martin, A. (2006). A European framework for digital literacy. Nordic Journal of Digital
Literacy 1.2, 151-161.
6. Prensky, M. (2001). Digital natives, digital immigrants part 2: Do they really think
differently?. On the horizon, 9(6), 1-6.
7. Reddy, P., Sharma, B., & Chaudhary, K. (2020). Digital Literacy. International Journal of
Technoethics, 11(2), 65–94.
8. Škoda, J. & Luić, L. (2020). Challenges of digital age curriculum convergence. U Gómez
Chova, L., López Martínez, A. & Candel Torres, I. (Ur.) ICERI2020 Proceedings, 6448-
6554.
9. Škoda, J., Luić, L. & Brlek, E. (2020). Informational aspects of digital literacy. U Gómez
Chova, L., López Martínez, A. & Candel Torres, I. (Ur.) EDULEARN20 Proceedings,
3910-3916.
10. Zovko, A. & Celizić, M. (2020). Informacijska i digitalna pismenost u cjeloživotnom učenju
– dostupnost osobama starije i zrelije životne dobi. Suvremena pitanja, XV (30), 34-53.

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RESEARCH AND CRITICAL EVALUATION IN THE DIGITAL

EDUCATIONAL ENVIRONMENT
Manuela Koseto Nadinic
University North, Croatia
manadinic@unin.hr

Sandra Maletic
University North, Croatia
samaletic@unin.hr

ABSTRACT
Educators' attitudes towards their own research and critical evaluation in the digital
environment influence information practices and the digital perspective in education as one of
the social contexts. Based on the "Decision on the adoption of the curriculum for the
interdisciplinary topic of the use of information and communication technology for primary
and secondary schools in the Republic of Croatia" in January 2019, educators teach students
research and critical evaluation in the digital environment. It is one of the domains (C domain)
of this curriculum and the basis for self-assessment of educators' attitudes about research and
critical evaluation. The authors believe that these attitudes correlate with the implementation
of this curriculum in direct work with students, but also that the educator's educational area
influences the formation of these attitudes. The rapid development of technology and available
information requires educators to have developed information management, research and
critical evaluation skills, in order to appropriately teach students in the C domain, regarding
research and critical evaluation in the digital environment. The research sample consists of
randomly selected educators, and is conducted using a quantitative research method of a survey
questionnaire aimed at anonymously examining attitudes through a survey questionnaire
designed in Google form, while the results were analysed using SPSS software to determine
correlation. By analysing the data collected by the research, hypotheses on the impact of the
educational field on the attitudes of educators about their own research and critical evaluation
in the digital environment were tested. In this sense, this paper classifies educators 'attitudes
towards their own digital literacy with regard to educational areas and recommends exploring
educators' attitudes about research and critical evaluation in higher education due to the
principle of vertical-spiral sequence and permanent development of digital competencies and
digital intelligence.
Keywords: Critical evaluation, Digital competences, Digital intelligence, Digital environment,
Education

1. INTRODUCTION
“Keeping up with the times” is an important and valuable thought in the modern sense because
of the responsible work that educators do - they teach young people in elementary and
secondary school. How can educators keep up with new information and communication
practices, but without neglecting training in modern teaching strategies and in their educational
area to which they teach students? In 2017, the DQ Institute (DQI) was created with the purpose
of overcoming the digital intelligence (DQ) skills gap globally, with a focus on children. In
addition to digital intelligence, the Institute has established global standards for digital literacy,
digital skills and digital readiness. According to Topolovec, Marinović and Pavlić (2006)
knowledge and skills for the 21st century represent basic social strategic guidelines that
stimulate the process of learning and teaching. UNESCO states the importance of identifying
information literacy indicators that should be applied in the education of educators (Catts and

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Lau 2008). In addition to technological skills related to teaching work and the use of ICT, it is
necessary to encourage a critical attitude towards these technologies in the teaching process.
The fact that technology in the age in which we live has become known and accessible to all
does not necessarily reflect the quality of its application in learning and teaching (Batarelo
2007; Catts and Lau 2008). If educators master the use of information and communication
technology in teaching, and possess the necessary critical thinking and knowledge that implies
digital literacy, they will be able to encourage students to develop their learning, encourage a
higher level of thought and open up opportunities for students to construct and navigate
knowledge in the digital environment. If younger educators come to school with developed
information literacy, the assumption is that this will have a positive impact on other educational
professionals in the school atmosphere (Vrkić Dimić 2013). Therefore, they influence
information practices and the digital perspective in education as one of the social contexts.
Critical thinking in the educational system forms an important part of positive development that
suits the needs of the individual and society (Burberger 2012). Critical thinking, as an important
predictor of the educational system in democratically developed countries (Miliša and Ćurko,
2010) has been discussed since the beginning of the 20th century. John Dewey is considered
the first originator of the modern concept of critical thinking. He states the necessity for opinion
to be part of the teaching process, and describes it as "the only immediate path to continuous
improvement of teaching methods and learning consists in focusing on beliefs that require,
develop, and examine opinion" (Dewey 1926). Critical thinking is a complex tool for achieving
not only a different view of the world, but also better social relations based on appreciation and
developed social skills (Zagorac, 2012). Higher forms of thinking include critical thinking for
the necessary tool in assessing and evaluating information and dealing with it. In the
information process, critical thinking is crucial, both in reflecting on the information problem,
evaluating information and producing knowledge based on information, as well as in sharing
information with others (Stričević and Perić 2017). Voogt and associates (according to Sadaf
et al. 2020) believe that teachers and students must understand the impact of technology on
society and be ready to observe it from a critical perspective, while maintaining independence
from its influence and openness of mind to its benefits. Ehat-Alkalai et al, back in 2004. have
noted that critical thinkers are constantly questioning and should take nothing for granted, both
in the digital and pre-digital ages, and that information skills are becoming a ‘survival skill’ due
to unlimited access to digital information. In addition, it apostrophes that only a few authors
emphasized the importance of researching the cognitive and pedagogical aspects of information
skills. Castellví et al. (2020) state that Freire and Macedo considered in 2004 overemphasizing
the cognitivist aspect in the formation of critical thinking. They argued that critical thinking is
not only a set of skills, but also an attitude towards information, a way of thinking and living,
which should prepare us for action and social transformation. In 2019, a Decision was taken in
the Republic of Croatia on the introduction of the cross-curricular topic Use of ICT and the
educators are obliged to implement the expectations in their teaching subjects. In this cross-
curricular topic, there are four interconnected domains. One of the domains is Research and
Critical Evaluation in the Digital Environment. This domain includes the development of
information and media literacy in the digital environment and fostering the research spirit
through critical thinking and problem solving. Initially, the students are guided in the process
of searching for information, using technology, in order to develop self-encouragement and
information management skills. Educational expectations in the Curriculum are defined for
each of the four domains at the cycle level. Each of the 5 cycles covers a specific developmental
age of the student. Educational expectations, given the cycle, encourage creativity and social
responsibility and develop critical and creative thinking in solving problems. The Curriculum
states that the educator must ‘use information and communication technology in a balanced and
purposeful manner, appropriate to the teaching/didactic situation in any part of the class or

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teaching process (motivating, learning, repetition, evaluation and self-evaluation), (Official

Gazette, 2019). Bušljeta Kardum (2020) has shown with her research that the percentage of
representation of expectations that encourage the development of critical thinking skills in the
cross-curricular topic ICT is 50%.

2. METHODOLOGY
2.1. Research objectives and hypotheses
The aim of the study was to examine the attitudes of educators about their research and critical
evaluation in the digital environment as expected in the C domain (Research and Critical
Evaluation in the Digital Environment) of the cross-curriculum "The Use of Information and
Communication Technology". The research verified the hypothesis about the impact of the
educational area on educators' attitudes towards research and critical evaluation in the digital
environment. In this sense, this paper classifies the attitudes of educators towards digital literacy
with regard to educational areas.

2.2. Sample and instrument

The survey was conducted anonymously through a questionnaire drawn up in the form of a
Google form. The questionnaire is divided into 6 blocks. The first block refers to a general set
of questions related to information and critical evaluation, and the other five are created
according to the C domain educational cycles presented in the Cross-Curriculum. The
Curriculum predicts the expectations that students should achieve at a certain level of education.
The authors transformed expectations into claims to see what educators' attitudes are about
research and critical evaluation in the digital environment, or whether they feel they have the
expectations that are predicted for students. For the purpose of analysing the results of the
research, a correlation method was used.

2.3. Conducting research

The sample research consists of educators employed in primary and secondary schools in
Croatia (N=333) because they contribute to the construction of information practices and digital
perspectives in education through their attitude to their own media and information literacy. Of
the total number of participants, the majority of them teach students in secondary schools (195
educators state one or more of secondary school types). For research purposes, the educators
are grouped into 9 areas according to the questionnaire answers: first is language-
communication area, second is mathematical area, third is area of natural science, technical and
information area is forth area, socio-humanistic area is fifth area, art area is sixth area, physical
and health area is seventh area, eight area is classroom teaching area and economic area is ninth
area. The study was conducted using a quantitative research method of a survey questionnaire
aimed at examining attitudes. The survey was conducted during April 2022. The study included
89.5% of women (n=298) and 10.5% of men (n=35). By years of work experience in school,
the majority of participants are between 11 and 20 (n=106). With regard to the educational area
to which students are taught, the largest number of participants in the research teach in the
language-communication area (n=163). The participants of the survey come from 20 counties
of the Republic of Croatia, while the largest number is from Koprivničko-križevačka County
(n=86). The collected data were analysed by a statistical software data processing package, the
SPSS.

3. RESULTS
When asked by educators if they are familiar with the cross-curricular topic The Use of
Information and Communication Technology for Primary and Secondary schools, the largest
percentage said they know and use it in their work (65.8%), while an extremely small

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percentage of participants said they never heard of it (2.7%). 72.4% of educators (n=241) state
that they distinguish information from media literacy (Table 1).

Descriptive Statistics

Assessment of Assessment of media

information literacy literacy

N Valid 333 333

Missing 0 0

Mean 3.88 3.96

Median 4.00 4.00

Mode 4 4

Std. Deviation 0.749 0.715

Minimum 2 1

Maximum 5 5
Table 1: Descriptive Statistic
(Source: Authors research)

The first cycle of the C domain refers to students attending 1st-3rd grade of elementary school.
Educators express high attitudes towards their own adoption of these expectations. Students
attending 3rd-5th grade of elementary school belong to the second cycle, and educators believe
that attitudes from that cycle (completely or almost completely) apply to them. The third cycle
is intended for students in the 6th-8th grade of elementary school. Although most educators
express a high level of attitudes, lower-level attitudes are also observed for certain statements.
In the fourth cycle, for students attending 1st and 2nd grade of four-year secondary school and
1st grade of three-year secondary school, educators choose a high level of attitude towards
claims about research and critical evaluation in the digital environment. Students in 3rd and 4th
grade of four-year and 2nd and 3rd grade of three-year secondary school are part of the 5th
cycle. The attitudes of educators for this cycle are at a high level (Table 2).

Table following on the next page

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Summary Item Statistics

Cronbach's Alpha

Standardized
Based on
Cycles

Items
Maximum/

N of Items
Maximum
Minimum

Minimum

Variance
Range
Item Mean
4,113 3,859 4,420 ,562 1,146 ,046 9 .857
Means

Item ,736 ,461 1,049 ,588 2,275 ,030 9

cycle
First

Variances

Item 4,215 3,925 4,622 ,697 1,178 ,088 5 .820

Means
Second
cycle

Item ,634 ,393 ,805 ,412 2,050 ,024 5

Variances

Item 4,194 3,682 4,607 ,925 1,251 ,104 8 .882

Third cycle

Means

Item ,634 ,384 ,995 ,611 2,591 ,053 8

Variances

Item 4,208 3,955 4,631 ,676 1,171 ,050 7 .904

Means
Fourth
cycle

Item ,624 ,384 ,768 ,384 1,999 ,018 7

Variances

Item 4,303 3,760 4,742 ,982 1,261 ,126 10 .893

Fifth cycle

Means

Item ,604 ,276 1,001 ,724 3,620 ,059 10

Variances
Table 2: Summary Item Statistics
(Source: Authors research)

Complex research on the Internet is conducted by 47.7% (n=159) independently and on their
own initiative, 33% independently (n=110), only on their own initiative 6.6% (n=22), and none
of the above 12.6% (n=42). When asked whether they consider themselves a digital citizen,
65.8% (n=219) assessed in the affirmative, depending on the situation, 28.2% (n=94), while
answering with perhaps not only 6% of survey participants. 79.6% (n=265) of educators are
considered to be careful and critical in handling the information they find on the Internet. 82%
of them (n=273) believe that they show prudence in checking the reliability and credibility of
online information. Critically evaluate the search process and results, choosing the necessary
information from the required 72.1%, independently evaluate the search process and results,
choosing the necessary information from the required 61.1%, self-assess the search process and
results, choosing the necessary information from the required 33.6%, and none of the above
was answered by 4.2% of survey participants.

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Prior to performing the Cronbach Alpha test, the last question, described in the previous
sentence, was omitted for Cycle 5 (I evaluate the search process and results, selecting the
required information from the required ones). The Cronbach Alpha coefficient shows that all
scales in each of the 5 cycles hold up and are reliable (Table 2). This reliability test was
necessary because it is a new scale authors of this paper developed. Therefore, the attitudes of
educators towards the statements from the C domain of the curriculum The Use of Information
and Communication Technology are presented in hereinafter (Table 3). These claims refer to
the educational expectations that students should achieve in a particular cycle of education (1-
5). According to them, the educators assessed how much the claims applied to them. In doing
so, in Likert scales 1 marked the answer “does not apply to me at all” and 5 indicates
“completely applies to me”.

Descriptive Statistics

N Minimum Maximum Mean Std. Deviation

Statistics Statistic Statistic Statistic
Statistic Std.
Error

First cycle 333 2,22 5,00 4,1128 ,03179 ,58014

Second cycle 333 2,00 5,00 4,2150 ,03324 ,60650

Third cycle 333 1,50 5,00 4,1937 ,03196 ,58326

Fourth cycle 333 1,71 5,00 4,2081 ,03430 ,62598

Fifth cycle 333 2,50 5,00 4,3030 ,03032 ,55324

Valid N 333
(list wise)
Table 3: Descriptive Statistics
(Source: Authors research)

Further, we tested the hypothesis that the educators' educational area impacts the formation of
attitudes. From cycle 1 to cycle 3 there are no differences in educators’ attitude and educational
area, but in cycle 4 and 5 we found a significant difference in the attitude of educators from
different educational areas. There was a statistically significant difference between groups as
demonstrated by one-way ANOVA: for cycle 4 ANOVA F (8,324) = 1.985, p=.048) and for
cycle 5 ANOVA F (8,324) = 2.06, p=.038). We have to mention that small and unequal group
sizes of educators in certain educational areas might impact our test results (Table 4). Post hoc
tests for multiple comparisons found that the mean attitude for cycle 4 and 5 among educators
from the economical area was significantly lower compared to the mean score of educators in
the technical and informational area (p=.003 for cycle 4, p=.002 for cycle 5) and the social-
humanistic area (p=.014 for cycle 4, p=.002 for cycle 5). There was no statistically significant
difference between educators' area and educators' attitude in cycle 1, cycle 2 and cycle 3.

Table following on the next page

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Educational areas

Educational area Frequency Percent Valid Cumulative

Percent Percent

Valid 1. Language- 163 48,9 48,9 48,9

communication area

2. Mathematical area 17 5,1 5,1 54,1

3. Area of natural science 42 12,6 12,6 66,7

4. Technical and 13 3,9 3,9 70,6

information area

5. Socio-humanistic area 31 9,3 9,3 79,9

6. Art area 13 3,9 3,9 83,8

7. Physical and health 12 3,6 3,6 87,4

area

8. Classroom teaching 19 5,7 5,7 93,1

area

9. Economic area 23 6,9 6,9 100,0

Total 333 100,0 100,0

Table 4: Educational areas
(Source: Authors research)

On a scale of 1-7, educators estimate that their attitudes about research and critical evaluation
in the digital environment affect the feasibility of expectations from the C domain Research and
Critical Evaluation of cross-curriculum Use of information and communication technology
(Mean=5.162).

4. DISCUSSION
Attitudes in education have so far been researched in various ways, e.g. towards the Internet,
digital technologies and digital literacy (Hong et al. 2003, Mata and Stoica 2021, Morse et al.
2011, Pratolo and Solikhati 2021, Tsai et al. 2001, Zhang 2007). Miočić and Miletić (2021)
conclude from the analysis of the results that Croatian language educators and foreign language
educators are motivated to use information and communication technologies in teaching. The
authors believe that specific research is required for the educators' attitudes toward research and
critical evaluation in the digital environment because critical thinking is an important
component of activities in the digital educational environment, and these educators' attitudes
are reflected in the teaching process, besides material possibilities of each individual school for
quality digital technologies. In order to research the attitude of educators towards research and
critical evaluation in education, a test of the reliability of the survey questionnaire was
conducted. The reliability test shows that the survey questionnaire can be used in new research:
attitudinal scales hold up and are reliable according to Chronbach Alpha test. The language-
communication area is by far the largest group, but there are no significant differences between
language-communication area and other educational areas.

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One-way ANOVA compared the means for all cycle attitudes between the educators in all 9
different educational areas. Here we see significant differences for cycle 4 and cycle 5. Post
hoc tests compared the means of the educators’ attitudes from different educational area (one-
on-one) and there is small significant differences between educators in economic area and
educators in technical and information area and, to a lesser extent, also educators in the socio-
humanistic area. It is a very small group size, but it gives a first indication, and more in depth
research needed. Namely, the cross-sectional study does not allow a conclusion to be made
about the cause-and-effect relationship.

5. CONCLUSION
Based on the conducted research and the obtained conclusion, we consider it necessary; in order
to further verify the adoption of expectations from the C domain of the Curriculum, to conduct
research aimed at examining the relationship between knowledge and attitudes of educators in
the field of science. Also, given the potential subjectivity of research participants in solving the
questionnaire (quantitative research methods), it is considered useful to conduct qualitative
research related to examining educators' attitudes about digital literacy in order to gain deeper
insight into their views of digital literacy related to research and critical evaluation in the digital
environment. We believe that this would contribute to a better understanding of the attitudes of
educators and the organization of various educations that would aim to encourage additional
acquisition of competencies in this area. Also, this research provides a good guide for planning
future research on the causal relationship between educators' attitudes and competencies on
media and information literacy (pragmatic purpose) and recommends examining educators'
attitudes about research and critical evaluation in higher education due to the vertical-spiral
sequence. Thus, the research yielded results indicating that the Republic of Croatia employs
educators who highly value their competencies in the field of research and critical thinking in
the digital environment. This is a potential that needs to be recognized, and accordingly,
educators need to be provided with resources that will enable them for quality use of digital
technologies for the purpose of quality teaching.

ACKNOWLEDGEMENT: Publications of this paper was supported by the University North

to which the authors express their gratitude for the support. The authors would also like to
express their many thanks to professor Ljerka Luić, lecturer of the PhD course Methodological
Approaches in Researching Digital Intelligence in the Media and Communication Area for
guidance and support through the research and writing process.

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THE IMPACT OF DIGITAL LITERACY ON THE CYBER SECURITY

OF DIGITAL CITIZENS
Eva Bach
University North, Croatia
evbach@unin.hr

ABSTRACT
Digital literacy focuses on individual's ability to understand multimedia texts and skills that
help in searching the Internet, communicating through various online networks and provide a
certain level of security in the digital space. The main subject of this paper is to determine the
extent to which digital literacy affects the cyber security of an individual. The aim of the
research was to examine whether there is a difference in the perception of the importance of
digital literacy and how much its impact is on the cyber security of citizens. Furthermore, this
paper presents the main features of digital literacy and cyber security in the digital age, their
impact on the individual and potential fraud attempts, along with answering the research
question - If age brings wisdom and experience, is it applicable when it comes to security in the
digital space? The sample of participants was determined geographically, based on the total
daily time spent on the Internet and divided into three age groups. Group A consists of younger
participants between 18 - 40 years, group B consists of participants from 41 to 60 years, and
group C participants older than 60 years. The research was conducted using the focus group
method and structured type of interview that was recorded, in which the author encouraged
participants to present their views, opinions and events in which they engaged, which are
directly related to cyber security and to assess the impact of digital literacy on cyber security.
The results were processed using descriptive analysis and it showed that the participants age
is not the backbone of the level of digital literacy and cyber security knowledge and that there
are differences between the research groups. The paper points out the importance of developing
cyber security awareness regardless of age and opens a new chapter for further in-depth
research aimed at designing a causal model of the digital literacy impact on personal cyber
security, an application that is possible in lifelong learning.
Keywords: Cyber security, Digital citizens, Digital intelligence, Digital literacy

1. INTRODUCTION
Digital literacy as a concept and a term has many definitions but the main focus is on the
individuals ability and skills to communicate on online networks, understand hypertext and
multimedia texts as well as making judgements on online sources (Studentski Poduzetnički
Inkubator, 2019). It has become a widely known term in the recent years as we as a society
entered the age of digitalisation and our daily activities involve the use of digital means such as
Internet. The American Library Association’s digital-literacy task force defines digital literacy
as the ability to use information and communication technologies to find, evaluate, create, and
communicate information, requiring both cognitive and technical skills.” (Loewus, 2016). “The
ability to approach the information filtering biased and fake news is considered a key factor
while evolving into the new generation of smart users.” (Bosanac and Luić, 2021: 1041). The
authors of the paper Informational aspect of digital literacy explain that “being digital literate
means having access to a wide range of practices and resources that you can use digital tools,
and this is the ability to create and share meaning in different formats; it also means creating,
collaborating and effectively communicating and understanding how and when digital
technologies can best be used to support these practices.” (Škoda, Luić and Brlek, 2020: 3910).
With that in mind, the role of cyber security in digital literacy is now more important as ever
since security threats in the digital field have become a part of individuals daily interactions.

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IBM (2022) has shown that the average cost of data breach in 2020 was over 3.8 million dollars
globally which includes the expenses of discovering the cyber threat, responding to it, the cost
of downtime and lost revenue as well as reputational damage to the individual and companies.
IBM (2022) defines cyber security as the practice of protecting critical systems and sensitive
information from digital attacks and CISCO (2022) makes it clear that every individual needs
to know the basic data security principles including choosing strong passwords, being wary of
attachments in email and backing up their data. One of the main types of cyber security threats
are phishing, malware and social engineering. Cambridge Dictionary (2022) defines phishing
as an attempt to trick someone into giving information over the internet or by email that would
allow someone else to take money from them and it is one of the most common types of cyber
attacks. IBM (2022) refers to malware as malicious software variants—such as worms, viruses,
Trojans, and spyware—that provide unauthorized access or cause damage to a computer.
CISCO (2022) explains social engineering is a tactic that adversaries use to trick an individual
into revealing sensitive information and often use psychological manipulation to trick users into
making security mistakes or giving away sensitive information. Previous research conducted
by Tinmaz and others (2022) have shown a growing tendency towards digital literacy and the
skills that needs to acquired are starting from a young age (especially in social media). The
main purpose of this paper is to find how participants asses their knowledge on digital literacy
and cyber security, can they define the two terms and if they have been in close contact with a
potential cyber attack. The key research question is if age brings wisdom and experience, is it
applicable when it comes to security in the digital space? The main hypotheses are as following:
• H1: Younger participants have more knowledge on digital literacy and cyber security
• H2: Older participants are at a higher risk of being potential cyber attacks victims than
younger participants
• H3: Digital literacy has an important role in the awareness level of cyber security
• H4: Participants that have a higher education background can better distinguish potential
cyber threats

2. METHODOLOGY
The research for this paper was conducted in the capital of Croatia, in Zagreb, where all the
participants currently reside. The was qualitative method was used in the research with 12
participants (N=12) that was conducted in authors home because of the COVID-19 pandemic
and the number of participants that needed to be in one place. The participants were divided
into three age groups. Group A consists of younger participants between 18 - 40 years (4
participants), group B consists of participants from 41 to 60 years (4 participants), and group C
participants older than 60 years (4 participants). The research method used for was a focus
group as it encourages in-depth discussion which will investigate the values or attitudes of the
participants towards a discussion topic and to understand and explain the meanings, beliefs,
attitudes and behaviours of individuals (Skoko and Benković, 2009: 217). The moderator of the
focus groups was the author conducting a structured type of interview with 4 socio demographic
questions and 8 research questions that were recorded and transcribed. The first set of socio-
demographic questions was the participants age, gender, highest level of education,
employment, whereas the second group of questions consists of the following questions: What
is your daily average time you spend using the Internet?; Have you heard of digital literacy
before this interview and if you did, how would you describe the term?; Have you heard of
cyber security before this interview and if you did, how would you describe the term?; Do you
think that digital literacy impacts on cyber security and if yes/no, why?; On a scale from 1 – 5
(1- I know nothing, 5- I know it all), how would you rate your cyber security knowledge?; Have
you ever been a victim of a cyber attack and if you were what happened?; Have you ever heard
of the following terms and if you did, can you describe them in your own words: phishing,

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malware and social engineering?; Did you ever receive a phishing email and do you remember
what did it say?. Duration of the focus groups was 130 minutes total with one break of 10
minutes.

3. RESULTS
Results are processed using descriptive analysis divided in 3 groups based on participants age.
The majority of participants were men (58%) and the majority has a university degree (75%)
and are currently employed – 58% (in Group C, participants who aren't employed are on
retirement). The following tables show the socio-demographic results based on each of the
research group.

Age Gender Education Employment

Participant 1 22 F SSS No
Participant 2 33 M VSS Yes
Participant 3 28 F VSS Yes
Participant 4 34 M VSS Yes
Table 1: Group A (18 – 40 years)

Age Gender Education Employment

Participant 5 56 M VSS No
Participant 6 57 F VSS Yes
Participant 7 58 M VSS Yes
Participant 8 43 M SSS Yes
Table 2: Group B (41 – 60 years)

Age Gender Education Employment

Participant 9 62 M SSS Yes
Participant 10 65 F VSS No
Participant 11 65 F VSS No
Participant 12 67 M VSS No
Table 3: Group C (older than 60 years)

Participants from group A have an average of 8 hours minimum of using the Internet on a daily
basis (Table 4.)

Participant 1 8 hours
Participant 2 at least 10 hours
Participant 3 8 hours
Participant 4 9 hours
Table 4: Daily average using the Internet (Group A)
(Source: Authors research)

Participants in group A have all heard the term digital literacy before this interview and had the
following answers on the question about digital literacy: It is a term which describes all aspects
of Internet as well as downloading and uploading information on the Internet (Participant 1).
It helps me with understanding what is fake and what isn't on the Internet, such as ads or fake
news (Participant 2). I would say that digital literacy means understanding the multimedia texts
such as online articles, videos and having the skills to use the Internet (Participant 3).

Digital literacy is a persons knowledge and skills to use informational tools such as Internet,
SPSS, Photoshop, phone applications (Participant 4).

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When asked if they have heard of cyber security before, all participants said yes and described
it as following: Cyber security has all my personal information that I have on my phone not just
the information I put out in the world and the cyber security would need to protect it (Participant
1). It is usually used to secure high confidential data for high profile people, banks government
and everyday people don't have the proper means to se protect themselves (Participant 2). For
me, cyber security is a persons ability to recognize potential malicious attacks and how to
properly respond to them (Participant 3). Inability for someone to get your personal information
such as contact lists, bank accounts (Participant 4).

All participants think that digital literacy has an impact on cyber security in the form of
recognizing some malicious attacks and agreed if that was a subject in elementary or high
school that students would be better prepared for the dangers that are present when using the
Internet. The average cyber security knowledge rate in group A was 3 (Table 5).

Participant 1 3
Participant 2 2
Participant 3 4
Participant 4 3
Table 5: Personal rate on cyber security knowledge
(Group A) - (scale: 1 – I know nothing, 5-I know everything)
(Source: Authors research)

When asked if the participants were victims of a cyber attack, all responded no except for two
participants who said the following: My personal information from their mobile phone was
taken such as photos I didn't put online and still to this day I know how it happened. When I
was in elementary school, there was a fake Facebook profile of me that somebody created and
that was really scary to me (Participant 1). I got a mobile notification in 1 in the morning stating
that somebody from China is trying to log into my Apple ID but luckily I have 1 Factor
authentication so I just changed my passwords and a tragedy was avoided (Participant 2).

When asked about phishing, malware and social engineering, the participants in group A said
the following: I have heard of all three types of these attacks, phishing is when somebody sends
you an email with a weird link that you must not click on it, malware is some kind of bad
software that can get on your computer and take your information and social engineering is
when a person tries to steal the data directly, for example my grandmother got a call where
they told her they were the police and asked how much money she has in her house (Participant
1). If we are talking about phishing emails, I know what they are, an email with suspicious link
but I don't know the details on how they create it, I have heard of malware but I don't know
anything except that there are hackers that use it to steal your information and social
engineering is somebody is pretending to be someone they are not to steal your personal
information over the phone (Participant 2). I can describe the 3 terms as a type of cyber attacks,
the first one often uses emails with bad links to steal the data, malware is a virus that is on your
phone/PC to steal the data and social engineering are people to use psychological tricks to
trick you into giving sensitive information such as credit card information and others
(Participant 3). I have seen phishing emails before and it is often like a security breach in the
bank and you need to click on the link in the email to secure your data, malware is some kind
of virus that gets on your PC when going to some weird sites and for social engineering I have
an example from the Chinese government that uses social credit score to have their citizens
obeying the rules ( Participant 4).

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Only two participants got a phishing email that was from a person stating that they want to give
them 1 million dollars because they inherited a fortune and that they have to click on the link.
The other participant mentioned the same type of phishing email only the link was for the
persons Wikipedia page and they asked in the email to send a reply if the participant wants the
money. Participants from group B have an average of 6 hours minimum of using the Internet
on a daily basis (Table 6.)

Participant 5 8 hours
Participant 6 7 hours
Participant 7 6 hours
Participant 8 5 hours
Table 6: Daily average using the Internet (Group B)
(Source: Authors research)

Participants in group B know about the term digital literacy and expressed the following
opinions: I would say that I am not very digitally literant but for me it means that you can use
every aspect that a mobile phone or PC has to offer, from writing in Microsoft office to online
shopping and communicating with your peers (Participant 5). Digital literacy helps people to
use the Internet (Participant 6). I would say that this involves skills on ow to use Internet and
your computer such as Excel (Participant 7). I have to agree with other participants and just
add that if you are digitally literant that it helps noticing fake news from the real information
(Participant 8).

When asked if they have heard of cyber security before, all participants said yes and described
it as following: The real cyber security can be divided in three categories, military, government
and everyday people and the term describes how these categories use security measures to
protect their valuable data from entities that want to access it (Participant 5). For me cyber
security is a set off skills for the good guys on how to defend from the bad guys that are hacking
our data (Participant 6). Cyber security helps governments, banks and corporations to have a
secure network so that no hackers try to access and steal their clients information, I think a lot
of money each year goes to cyber security (Participant 7). I would say that cyber security helps
people to keep their digital information such as online pictures and information that are on the
Internet and I agree with other participants that knowledge on cyber security helps us being
safe in this digital era (Participant 8)

All participants think that digital literacy has an impact on persons knowledge on cyber security.
The average cyber security knowledge rate in group B was 3.5 (Table 7).

Participant 5 4
Participant 6 3
Participant 7 4
Participant 8 3
Table 7: Personal rate on cyber security knowledge
(Group B) – (scale: 1 – I know nothing, 5-I know everything)
(Source: Authors research)

Nobody from group B was a victim of a cyber attack. When asked about phishing, malware and
social engineering the participants in group B said the following: I have seen phishing emails
often and it is usually a text stating your information was breached and that you need to click

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on the link to secure it, malware is a type of malicious software that hackers try to place on
your PC or phone such as worms and Trojans and social engineering when somebody is
pretending to be someone they are not in order to get valuable information from us (Participant
5). I have seen phishing emails on my work email but I always delete them because I know that
my bank would never send out that type of email and would call me directly if there was a
security breach for example, malware is almost the same as ransomware where there is a bad
virus implanted in your network to het information or to have leverage on you based on your
personal information and social engineering happens when people try to deceive others by
pretending they're someone they are not (Participant 6). I think phishing is also a form of like
bad ads that pop up stating that you have won a money prize and that you need to follow the
link below, I have heard of malware before but I know that is a virus you don't want to get and
social engineering is a type of eye-to-eye hack, it is not distributed through emails or computers
(Participants 7). So to keep to short, phishing is a type of hack where they are trying to lure you
to click on a link through an email, malware is a type of virus that can take your personal
information and social engineering is a hackers tactic in which he calls the potential victim
trying to get out sensitive and useful information (Participant 8).

Participants from group B said that they have received phishing emails before but often their
email just filters them to junk or spam. Participants from group C have an average of 8 hours
minimum of using the Internet on a daily basis (Table 8)

Participant 9 4 hours
Participant 10 2 hours
Participant 11 3 hours
Participant 12 2 hours
Table 8: Daily average using the Internet (Group C)
(Source: Authors research)

Participants in group C know about the term digital literacy and have stated the following: I
know that it is a part of being literate in the digital age and it involves a skill set to use the
Internet and programs on the PC (Participant 9). I think it is knowledge about the digital world
and how to use the Internet (Participant 10). It is a term that describes a persons ability to use
digital means such as phone, Internet, smart TV (Participant 11). Digital literacy is when you
know how to search the Internet to find something you need, to be present on social media and
to use a PC (Participant 12).

When asked if they have heard of cyber security before, all participants have heard of it and
expressed their opinions as following: I think it is a type of security that keeps all of our
information on the Internet safe (Participant 9). It is mostly used by banks and big company's
to keep the information safe (Participant 10). Cyber security is a term that describes all things
necessary to keep a person safe in the digital era but I don't know the details (Participant 11).
I would say that cyber security is a term in IT department that helps people who work in that
department to keep their data safe, I don't think that we are safe on the Internet (Participant
12).

All participants in Group C thinks that digital literacy has an impact on cyber security and if
they had it a subject in school (which wasn't possible at that point in time), they would have
more knowledge about the subject itself. The average cyber security knowledge rate in group
C was 2 (Table 7).

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Participant 9 2
Participant 10 3
Participant 11 1
Participant 12 2
Table 9: Personal rate on cyber security knowledge (Group C)- (scale: 1 – I know nothing, 5-
I know everything) (Source: Authors research)

When asked if participants were a victim of cyber attacks, only one participant responded and
said: I have gotten a weird message on my iPhone that was written in big red words stating I
had a virus that will corrupt all my data if I don't click on the link and I was in a panic mode
and called my son who deleted that weird pop up window and I was back to being safe
(Participant 11).

When asked about phishing, malware and social engineering the participants in group B said
the following: I really don't know what phishing is unless we are going fishing, malware sounds
like some bad software that is on your phone and social engineering is a way to manipulate the
masses, example with the COVID-19 measures (Participant 9). I also don't know how to define
phishing but each term sounds like some bad thing that happen on the Internet, my son has told
me that malware is like a virus that can take your personal information from your phone and
social engineering is a new term to me (Participant 10). I haven't heard of phishing before but
I know that malware can get on your phone if you click on weird looking links on the Internet
and social engineering is something that also helps the bad guys to take your personal
information (Participant 11). I don't know much about these terms but I have heard on the news
that we need to be careful when giving out our personal information about ourselves, I would
say that is probably social engineering, when someone is trying to get some information out of
us but I don't know how to describe phishing or malware (Participant 12). Participants from
group C said that they haven't received phishing emails.

4. DISCUSSION
All participants who were a part of this study are from Zagreb area, 5 women and 7 men,
majority employed (58%) while in group C, unemployed are in retirement (75%) and with an
university degree (75%). Regarding the daily average time spent on the Internet, the youngest
participants that were a part of group A exceeded with the average above 8 hours per day (8,75
hours), group B with 6,5 hours and group C with 2,75 hours. Even though all the participants
have heard of digital literacy before conducting the interviews, there is a difference between
groups in the level of details provided. When asked about cyber security, all participants were
familiar with the term, but the least knowledge has shown group C. All participants in this study
have agreed that digital literacy has an impact on the knowledge level of cyber security with
notation that if it was thought in school that participants would be more knowledgeable about
it. Cyber security knowledge rate was a little bit surprising as the participants in group B have
rate it higher than younger participants while as expected, group C thought they have the least
knowledge on the subject. One participant from each group was a victim of cyber attacks in
form of stolen personal information (created a fake social media account of the participant),
attempt of identity theft and malware attempt. Regarding types of cyber attacks, as predicted,
the group A had the most knowledge whereas the group C had the least. Nobody from group C
received phishing emails which cause may be that they are spending far less time on the Internet
n comparison with the participants in group B and A where some participants received that type
of email.

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• Hypothesis 1 - Younger participants have more knowledge on digital literacy and cyber
security, has been confirmed the causal relationship about the amount of time they spend
on the Internet and the fact they have been born in the digital era whereas the older
participants have not.

• Hypothesis 2 – Older participants are at higher risk of being victims of potential cyber
attacks has been denied because the study hasn't shown the oldest participants as the
potential victims, rather the younger participants. The reason behind this could be the fact
that older participants are more careful when diving into digital space as they don't know as
much.

• Hypothesis 3 – Digital literacy has an important role in the awareness level of cyber security
has been confirmed as all participants have shared the same opinion on the importance of
digital literacy and having it as a part of a school subject.

• Hypothesis 4 – participants that have a higher education background can better distinguish
potential cyber threats cannot be confirmed or denied as only 25% of participants have only
finished high school.

Old age has a role in the impact of digital literacy on cyber security, which was shown in the
research as the older participants weren't cyber attacks victims as it might be excepted before
conducting the study. However, it is important to note that there is unambiguous answer to the
main research question due to limitations of this study because of the small number of
participants. This study has confirmed what has been shown in the research Tinmaz and others
(2022) as it was shown that learning about digital literacy starts from young age. This research
has shown that participants who weren't born into digital era (were born before the Internet)
and are currently employed have shown similar knowledge and skills when it comes to digital
literacy and cyber security. There is a visible difference between group A and group C and the
cause for it is due to lack of involvement in the digital space from the young age. Regarding
potential cyber attacks victims based on their age, this research hasn't shown that older
participants are more prone to being victims of these attacks but the reason behind this result
could be one of the limitations of this research which is a small number of participants.

5. CONCLUSION
Since we are living in a digital era in which we are almost completely intertwined with digital
tools that we use on an everyday basis such as the Internet, mobile phones, GPS etc., and
evidently digital literacy has an impact on individuals life. As there are many positive aspects
regarding the digital space, there is also a big threat that lies under cyber security which are
cyber attacks such phishing emails, malware and social engineering. These attacks are made to
prevariety individuals and use the stolen information to their own advantage. On a global scale,
in 2020, there was more than 3 million dollars lost due to data breaches and it is more important
then ever that the society has the skills to recognize these types of attacks. The results of the
study have shown that most participants have at least basic knowledge of digital literacy and
cyber security but are still prone to become cyber attack victims due to lack of knowledge.
Furthermore, all participants agreed that if there was a subject or a topic in school which dealt
with digital literacy that they would have more knowledge than they do now, stating that their
level of knowledge is they was it is because of individuals affinities for research and prevention.
The research hasn't shown that older participants are more cyber security victims than the
younger participants but there was a lack of knowledge in the older participants on the subject
of the study.

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Since this study has limitations because of the small number of participants, it is great start for
future studies in which could increase number of participants and design a causal model of the
digital literacy impact on personal cyber security. To conclude, in old age, a person better
protects themselves from misfortune and in youth, better endures it (Schopenhauer).

ACKNOWLEDGEMENT: Publications of this paper was supported by the University North

to which the authors express their gratitude for the support. The authors would also like to
express their many thanks to professor Ljerka Luić, lecturer of the PhD course Methodological
Approaches in Researching Digital Intelligence in the Media and Communication Area for her
ongoing support.

LITERATURE:
1. Bosanac, D. and Luić, L. (2021). Importance of Digital Literacy in the Process of
Confronting the Stress During COVID-19 Pandemic. European Federation for Medical
Informatics (EFMI) and IOS Press, pp 1041 – 1045.
2. Cambridge Dictionary. (2022). Phishing. Cambridge University Press. Retrieved 27.04.
2022 from https://dictionary.cambridge.org/dictionary/english/phishing
3. CISCO. (2022). What Is Cybersecurity?. Retrieved 26.04.2022 from
https://www.cisco.com/c/en/us/products/security/what-is-cybersecurity.htm
4. IBM. (2022). What is cybersecurity?. Retrieved 27.04. 2022 from
https://www.ibm.com/topics/cybersecurity
5. Loewus, L. (2016). What Is Digital Literacy?. Education week. Retrieved 26.04.2022 from
https://www.edweek.org/teaching-learning/what-is-digital-literacy/2016/11
6. Schopenhauer, A. Retrieved 02.05.2022. from https://izrekeicitati.net/u-starosti-covek-se-
bolje-cuva-od-nesrece-u-mladosti-je-bolje-podnosi/
7. Skoko, B., Benkovic, V. (2009). Znanstvena metoda fokus grupa – mogućnosti i načini
primjene. Politička misao, Vol. 46. No 3, pp 217 – 236
8. Studentski Poduzetnički Inkubator. (2019). Evolucija digitalne kompetitivnosti: digitalna
pismenost u EU. Retrieved 26.04.2022. from http://spi.efst.hr/evolucija-digitalne-
kompetitivnosti-digitalna-pismenost-u-eu/
9. Škoda J., Luić L. and Brlek E. (2020). Informational aspects of digital literacy. Proceedings
of EDULEARN20 Conference, pp. 3910 – 3916.
10. Tinmaz, H., Finea-Ivanovici, M. and Baber H. (2022). A snapshot of digital literacy. Library
Hi Tech News, Vol. ahead-of-print No. ahead-of-print.

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DIGITAL COMMUNICATION AND DIGITAL COMPETENCIES -

PREREQUISITES FOR BUILDING THE ORGANIZATION'S DIGITAL
IDENTITY
Mateja Fras Venus
University North, Croatia
mafras@unin.hr

ABSTRACT
Modern countries pay great attention to the development of digital communication of civil
society organizations and the public, citizens, through various digital media and channels, of
which social networks according to recent research are the most represented. For the purposes
of this study, fire brigades were selected from a wide range of functionally different civil society
organizations because of their presence in all societies, regardless of level of development and
organization, and because of almost equal importance for the safety of citizens regardless of
geographical and any other affiliation. Civil society organizations meet problems in
communicating with the public on a daily basis: from up-to-date transmission of relevant
information, how to transmit it and the selection of relevant media. The rapid development of
digital technologies, and consequently the intensification of digital communication, has posed
a challenge to civil society organizations on how to transmit relevant information to citizens
through digital media and how to build the digital identity of the organization. Whether digital
communication and digital competencies of civil society executives influence the creation of
their organization's digital identity is a research question on which this study is based, the aim
of which is to assess which variable, digital communication or digital competences and
consequently on their dissemination in public, some of the questions were asked to the
respondents in the survey questionnaire submitted to the heads of fire organizations. The
research was conducted on a sample of fire brigades from one county in the Republic of
Croatia, the analysis of the results of which showed that the factors of digital communication
and digital competencies significantly affect the creation of digital identity of fire brigades.
How citizens perceive this identity and whether their perception is in line with strategic
projections of the implementation of social media in public relations of fire brigades are
questions that require further research.
Keywords: Civil society organizations, Digital communication, Digital competences, Digital
identity, Fire brigade

1. INTRODUCTION
Digital identity is a term that is very often used in the virtual world of the 21st century and is
closely related to media literacy. Tafra-Vlahović (Tafra-Vlahović, 2012) lists three key criteria
that an organization must meet in order to form its digital identity: central position (features of
key identities for the organization recognized through the appearance of the virtual profile);
diversity (compared to other organizations, and meet the need of members of the organization
to stand out); continuity (features of virtual identity that make it resistant to time and possible
changes). Organizations (companies, institutions, associations) that have a serious business
intention and a long-term vision of advancing their activities, greatly invest their financial and
human resources in building a positive digital reputation. To build a positive digital reputation,
it is important that real and visual identities are equal. It is the only way for an organization to
gain the trust of its customers in its primary business through the virtual and digital spheres.
Gaining the trust of users through virtual reality is a great challenge for all producers of certain
information. The challenge is for several reasons: the constant movement and change of the
digital world, the rapid flow and exchange of information, demanding and critical consumers

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who demand that all information is available at any time and in any place. Research has shown
that younger users of digital platforms, those who continuously learn about media literacy in
education systems, have digital competencies and successfully manage and control the digital
identity of themselves as individuals and are aware of the belonging and impact of their digital
footprints on the virtual community (Škoda, Luić, Brlek, 2020). Media and social networks
bring their consumers into virtual relationships and situations that are equal to real situations.
They are no longer just a tool for transmitting information. They are part of the daily life of
every modern man (Bauer, 2007). Given that the demand for information and the speed of
progress are related, it is obvious what intensity and quality of available information today's
Internet consumers are looking for. Modern information exchange and interactive digital
communication are no longer limited in separate types of roles: journalist-audience-public-
private, but all roles are mixed, everything must be present everywhere. Private life is no longer
private. It becomes a social event, while public society becomes a private event. In the modern
digital world, mutual boundaries have been lost. The influence of social networks is of great
importance on the life of the individual, but also society in general. Today, the connection of
people, thanks to digitalization and social networks, is the greatest in history. Thanks to global
connectivity, every individual can receive countless information in a very short time. Media
literacy is extremely important when communicating through social media. Media literacy as
well as dealing with the media is not something that is taken for granted but is trained and
learned. This competence should be possessed by all heads of organizations as well as those in
charge of public relations and media. New technologies enable consumers to connect with
organizations through the virtual world, communicate with them, seek answers to their
questions, and it is understood that organizations are ready and adapted to new challenges and
requirements. But if they are not? Will this affect the less positive or even negative digital and
then the real reputation of the organization? Are the leaders of organizations aware of their
competencies that influence the development of the digital identity of the organizations they
represent? Nowadays, social networks are an area of the virtual world in which events are as
frequent and widespread as in the real world. Among the most widespread and most used social
networks are: Facebook, Twitter and Instagram (Zečević, Miletić, Luić, 2020). The identity of
the organization is the personality of the organization that is formed in the new virtual world
based on the logo, website, behavior and culture of the site owner, message and mode of
communication (one-way and two-way) (Tomić, 2016). The purpose of this research is to
measure the responsiveness of civil society organizations in terms of communication through
social networks on the example of fire organizations in Virovitica-Podravina County. The aim
of this paper is to analyse the results of the research to determine the situational readiness of
civil society organizations, on a representative example of fire brigades, to use social networks
and check their readiness to inform the public through social networks. Are the leaders of civil
society organizations aware of their influence in building the digital identity of the organization
they represent? The environment and speed of information exchange affect the extremely rapid
progress of technology, but are the people involved in this exchange competent and media
literate enough to critically accept and provide information, especially when in the digital world
they represent a particular organization that carries out social activities?

2. METHODOLOGY/ MATERIAL AND METHOD

2.1. Respondents (participants)
The survey was attended by the heads of fire organizations of Virovitica-Podravina County.
There are 54 fire departments in the county. 43 of them responded to the survey in the period
from March to May 2022. 93%, approached the survey online, while 7% of the respondents
approached the survey on paper due, while they have to low media literacy.

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Fire brigades are the most numerous civil society organizations in the Republic of Croatia, and
the research was purposefully conducted on this sample.

2.2. Procedure
The paper combines qualitative and quantitative research methods. The questions for the survey
were taken from Wendling, Radisch and Jacobzone (Wendling, Radisch, Jacobzone, 2013), and
they relate to checking the situational readiness to use social networks and checking the
readiness to address the public via social networks.
Hypothesis: Civil society organizations are unprepared to present their official information on
activities and scope of work through social networks.

3. RESULTS
3.1. Checking the situational readiness to use social networks
The results of the research showed how competent civil society organizations are to use social
networks in order to inform the media and the public (Wendling, Radisch, Jacobzone, 2013).

Yes No
1. Do you have a blog, Facebook page or Twitter with a group of people 77% 23%
who follow your interventions and activities, and at some point, they
could help you solve a problem at the intervention?
2. Does your organization regularly follow social media related to 82% 18%
activities related to the profession?
3. Do you use analytics and measurement of visits to your website, 30% 70%
social media pages in order to notice certain trends of visits and focus
on a certain topic?
4. Do you have the methodology or tools to monitor the flow of 23% 77%
information exchanged on social media?
5. Do you encourage citizens to report and inform through social media 61% 39%
during some lengthy firefighting intervention? (floods, earthquakes,
storms, large fires, health crisis)
6. Do you educate your members on how to use social networks 51% 49%
constructively and affirmatively for the profession?
7. Is social media integrated into your education and training? 61% 39%
8. Do you use crisis mapping using social media data? 25% 75%
Table 1: Situational readiness checklist for the use of social networks
(Source: Wendling, Radisch, Jacobzone, 2013; Author research)

3.2. Checking the readiness of fire organizations to address the public through social
networks

Table following on the next page

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Yes No
1. Does your organization have guidelines on the use of social media 32% 68%
for its members / employees?
2. Does your organization have an RSS feed on its website? 0% 100%
3. Is your organization on Twitter? 0% 100%
4. Is your organization on Facebook? 73% 27%
5. Is your organization on Instagram? 0% 100%
6. Does your organization have ready hidden websites or other social 0% 100%
media ready for use in crisis situations?
7. Are you as the head of your organization on the Facebook page / 84% 15%
Twitter / Instagram?
8. Does your organization use social media to direct visitors to content- 43% 57%
like sites?
9. Does your organization use multimedia to communicate through 45% 55%
social media?
10. Does anyone else communicate with social media for your 21% 79%
organization?
11. Does your organization have a fast process for approving social 27% 72%
media posts in crisis situations?
12. Does your organization have a list of its followers on the Internet 45% 55%
and their profiles?
13. Are you trying to build a follower base and expand your reach on 37% 63%
social media? Do you know who the influential people on social
media are?
14. Do you publish your organization's presence on social media 34% 66%
through press releases with links to your social media pages?
15. Do you have a strategy for developing your organization's social 20% 80%
network?
16. Has your organization tried to raise awareness of crises and certain 41% 59%
dangers through social media? (sending weekly information and
interesting facts, explanations of what to do in various situations,
virtual campaigns on YouTube)?
17. Does your organization monitor social communication and follower 36% 64%
profile in real time?
18. Does your organization have elaborated methods of coordination 30% 70%
with other organizations to make certain information consistent and
widely disseminated?
19. Does your organization share other service information on its site? 48% 52%

Table 2: Presentation of the results of checking the readiness of fire organizations to address
the public via social networks
(Source: Wendling, Radisch, Jacobzone, 2013; Author research)

4. DISSCUSION
The results of the research showed that, despite the great and intensive development of digital
technology and the big step forward in expanding the virtual world after the crown of the crisis,
there is still a large percentage of organizations that do not have blogs, Facebook or Twitter and
do not follow hashtags. There is a large percentage of those who do not follow social media at
all related to activities related to their profession, 18% of them.

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Many organizations do not use analytics and measurement of visits to the organization's website
in order to identify certain trends of visits and focus on a particular topic, which shows that
organizations do not have information about the interest of consumers and users. This is
confirmed by the result of research which shows that 80% of organizations do not have a
strategy for the development of social networks. According to the share of social networks,
Facebook is used by 72% of organizations, while Twitter and Instagram are not used by any
organization, just as no organization has a hidden website or other social media ready for use
in crisis situations. It is surprising that no organization has an RSS feed. These data are an
indicator of the unwillingness of fire organizations for sudden, unexpected and unannounced
events that are the primary job of firefighters to react and communicate with social media and
through the digital platform in times of major disasters. It is encouraging that 61% of
organizations report and inform through social media during a long firefighting intervention
(floods, earthquakes, storms, health crises), but there are still a large number of others who do
not (39%). Regarding the integration of social media in the education of fire organizations, 61%
of them answered that the media are integrated, while 39% said that they do not use this
advantage. Media literacy as one of the main prerequisites for digital competencies of
organizational leaders is extremely important when using social networks. 51% of managers
confirmed that they educate their members on how to use social networks constructively and
affirmatively, while 49% of them do not. The research was conducted in civil society
organizations on the example of fire brigades that are specific organizations and have
hierarchical authority, obligations and powers prescribed by special laws. The results of some
other civil society organizations may not necessarily be like this, and the people who manage
them may be more competent in digital communication, and thus more positively build the
digital identity of their organizations. These are all areas that need further research. Since the
public and media consumers seek information about organizations through social networks, if
the responsible persons in the organization do not provide the information in time and in the
amount requested, they put pressure on organizations and it often happens that, under this
pressure, comes to unplanned and incomplete information that is placed in the public. Public
opinion on the identity of an organization has an important role and influence in modern society
because it affects the formation of a public issue, its resolution, social impact on the
organization and a number of other factors that affect the quality of work and development of
the organization (Tomić, 2016).

5. CONCLUSION
Every organization has its own identity. Given the importance of digitalization and equalizing
the importance of life in the virtual and real world, in addition to building a real identity, it is
important to build a digital identity. Civil society organizations have recognized the importance
of media literacy in building a digital identity. Although the work on building and forming the
digital identity of some civil society organizations is extremely good and can serve as an
example to others, it is still acting individually and there is a lack of a common development
strategy for developing media literacy (Peruško, 2008). This was also shown by the above
research, which confirmed the hypothesis: Civil society organizations are unprepared to present
their official information on activities and scope of work through social networks. Since there
is no national strategy for the development of civil society in the Republic of Croatia with
components and emphasis on digital identity, the development and construction of each
organization is left to non-professional individuals whose competencies and media literacy
remain on the subjective progress of each. In order to build a digital identity of the organization
that meets the challenging requirements of modern consumers, managers need to meet some of
the strategic determinants based on the principle of convergence (Gavranović,2006):
continuously produce and provide interesting content; produce forms of organization promotion

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for all available media platforms; establishment of multimedia packages; establishing a single
editorial system that unites all platforms of organizations with a common database for all users;
identification of the most popular content based on visits and user impressions. At the same
time, everyone who manages the organization, if he is also a person who places information in
the public, must have managerial and journalistic skills, but must also be aware of the large
number of social network users and continuously work on educating and educating their own
media literacy. His own digital identity has to be as similar as possible to the real one, and then
the organization he represents in the virtual world would have a positive digital footprint. This
paper is a contribution to the field of communication and educational sciences and opens a
number of other possibilities for further research into the communication of civil society
organizations in the digital world.

ACKNOWLEDGEMENT: Publication of this paper was supported by Ljerka Luic to which

the author of this article is grateful for the big support.

LITERATURE:
1. Bauer, T. A. (2007). Mediji za otvoreno društvo. ICEJ. Zagreb
2. Gavranović, A. (2006) Medijska obratnica-novi čitatelji traže drugačije novine. Studio
Moderna d.o.o. Zagreb
3. Peruško, Z. (2008). Kultura, mediji i civilno društvo. Naklada Jesenski i Turk, Hrvatsko
sociološko društvo. Zagreb
4. Škoda, J., Luić, L., Brlek, E. (2020) Informational aspects of digital literacy. Proceedings
doi: 10.21125/eduleran.2020.1064.
5. Tafra-Vlahović, M. (2012). Komunikacijski menadžment, Strategija, modeli, planiranje.
Visoka škola za poslovanje i upravljanje s pravom javnosti „Baltazar Adam Krčelić“.
Zaprešić
6. Tomić, Z. (2016) Odnosi s javnošću, teorija i praksa, 2. dopunjeno i izmijenjeno izdanje.
Synopsis. Zagreb, Sarajevo
7. Wendling, C., Radisch, J., Jacobzone, S. (2013). The Use of Social Media in Risk and Crisis
Communication. OECD Working Papers on Public Governance 24, OECD Publishing
8. Zečević, P., Miletić, L., Luić, L. (2020) The impact of social media consumption on
culutural intelligence of user. Proceedings of the 19th International Conference on
WWW/Internet (ICWI 2020)

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PERSONAL CYBER SECURITY MANAGEMENT: BASED ON THE

EXAMPLE OF MASTERS OF EDUCATION
Drazenka Svelec-Juricic
University North, Croatia
drazenka.svelec-juricic@unin.hr

Matilda Bulic
University North, Croatia
mabulic@unin.hr

ABSTRACT
The pandemic period of Covid-19 introduced numerous changes in the educational system
almost overnight, and therefore, insufficiently prepared, the entire teaching process as well as
communication among schools, teachers, and students has been transferred online. The
extensive use of digital technology to meet the educational needs of students has exposed
teachers to threats in cyberspace. Microsoft's Global Threat Activity Tracker recorded a
significant increase in cyber attacks on the educational sector during this period, in an attempt
to obtain personal data of students and teachers or to set up malaware. The educational system
is still the most exposed because the level of protection is not strong enough and the number of
online users is constantly increasing. The importance of developing cyber security awareness
has been emphasized in the Council of Europe document "The Digital Competence Framework
for Citizens DigComp 2.2" as one of five areas of digital competence development through eight
proficiency levels. The authors of this paper aimed to determine which data protection and
storage procedures, device protection, and informed behavior when using social networks are
used by masters of education in their free time and how these behaviors differ in their business
environment. The research question the authors answer in the paper is which behaviors of
masters of education in virtual space pose a threat to their cyber security. A questionnaire was
used to conduct the study, which was focused on masters of education in the primary education
system from various parts of the Republic of Croatia. The results of the research show that two
thirds of the respondents estimate that they pay more attention to cyber security when students'
data is included than when it comes to their personal data. What raises major concerns in the
results of the research is that one third of the respondents do not apply behaviors and actions
in the virtual space that ensure the security of devices, personal data, and content. The findings
of the study can be used to develop instructional programs for educators in the field of personal
cyber security management.
Keywords: Cyber attacks, Cyber security, Masters of education, Pandemic, Personal data

1. INTRODUCTION
Regardless of the pandemic, cyber security has during the last decade become one of the major
national security issues in the 21st century taking into account technological vulnerabilities and
huge opportunities for its abuse, thus creating room for instability. High pace and extent of
changes in digital technology lead to a wide range and tendency to use destructive cybernetic
weapons for the achievement of certain goals and deliberate harm and damage (Dunn Cavelty,
Wenger, 2022). Fast development of digital technologies and expansion of digital applications,
tools for learning, transfer of knowledge, and communication in the educational sector have
become even more intense during the Covid-19 pandemic, not only technologically but also
regarding the plummeting number of users. Due to the unforeseen scenarios of Covid-19 and
owing to the infrastructural capacity of the educational system of the Republic of Croatia,
already established Internet networks as well as existing equipment, the transfer of the whole

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teaching and learning process online overnight was made possible, without the previous
preparation of teachers, learners and parents i.e. participants in the whole process of teaching,
learning and communications. Such intensive activities in the virtual space address the aspect
of cyber security, particularly in the educational system, which is public and transparent, whose
users are the youngest and most vulnerable, and activities include teachers, professional
associates, students, and parents. As the number of cyber attacks increases, cyber security
becomes even more important implying all tools, policies, concepts, measures, activities,
education, and technology which are used to protect the cyber environment and its users.
(Karagozlu, 2020). The document of the Council of Europe "The Digital Competence
Framework for Citizens DigComp 2.2" in a conceptual model of digital competence citizen
development, as one of 5 key areas, envisages cyber security area, which includes acquiring
knowledge with the aim of undertaking activities for the protection of devices, personal data,
and content as well as health and environment. Cyber security as a specific segment of
information security does not cover only eliminating threats but also understanding and
managing risks. The fact that a person is the weakest element in the process of ensuring security,
stresses the fact that cyber security should not be treated exclusively as technological protection,
but we also have to understand and detect points of vulnerability (Laybatus, Tredinnick, 2016).
In order to increase cyber security, it is necessary to dedicate more interventions to change the
behavior of Internet users. These modifications will constantly be adapted and improved in
accordance with specific and continuously changing methods of attack, types of perpetrators
and victims, and targets of attack (Young, H. et al., 2018). Manipulating people to reveal
confidential information or access content unavailable to predators, poses great challenges to
cybersecurity experts, especially when it comes to activities and behaviors on social networks
(Borovac, Velki, Šolić, 2018). Threats come in different forms, from different sources, and with
different motives. Perpetrators from the outside always find system vulnerabilities and track
user’s digital clues as to how to obtain passwords using social engineering, password list, or
operating system vulnerabilities (Datt, 2016). The European Commission's document "2030
Digital Compass: the European way for the Digital Decade" (European Commission, 2021) also
emphasizes how the crisis, because of multiply increased frequencies and number of Internet
users, has revealed all shortcomings and vulnerabilities in digital space and has led to an
increase in cyber threats, attacks, and theft. One of the 6 rights and principles which the
European Commission points out are security and protection and, in that sense, the directions
and paths of digital transformation are envisaged with the aim of providing safe and protected
digital space to all users, from children to the elderly. Cybernetic security, information security,
digital competencies, and digital skills terms are strongly connected, high contextual and
demand simultaneous development in all segments, the same dynamics, following constant
technological development, quantity, and types of activities in digital space (Luić, Švelec-
Juričić, Mišević, 2021). Everyone should care about cyber security, but it is not enough that
employees in the education system only have a developed awareness of the necessity of cyber
security, because even good practice does not guarantee one hundred percent security. The need
to develop an awareness of teachers’ cyber security is already given as they teach students and
transfer their knowledge to them (Caparino, 2018). This work is based on assumptions that
masters of education who work as primary school teachers in schools in the Republic of Croatia,
with their behaviors in an online environment, endanger their own cyber security. The aim of
the research was to determine which behaviors of masters of education in the virtual space
represent a threat to their cyber security by determining the correlation between variables that
determine masters of education behavior and variables used in examining the levels of their
security in the virtual space.

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Starting from the problem and defining the goal of the research, the question which we want to
answer is to determine which protection procedures, data storage protection, informed behavior
while using social media masters of education use in their free time and how much these
behaviors differ in business environment.

2. METHODOLOGY
The research was conducted on a sample of masters of education who are primary school
teachers in the Republic of Croatia using the questionnaire method. It was used to research the
elements of personal cyber security that the masters of education apply in their free time as well
as in the business environment in terms of data storage and protection, device protection, as
well as informed behavior while using social media. In the introductory part of the survey, along
with the identification of the researcher, the purpose and goal of the research are presented.
Three questions about sociodemographic structure are included in the survey's 29 questions
(gender, age, and the county in which they live). The closed-ended questions are a mix of
multiple-choice and questions based on the notion of a five-degree interval scale (Likert scale),
with 1 (one) being the lowest value and 5 (five) being the highest. The survey was created in a
Google form. Between April 25 and May 6, 2022, a survey was conducted. A link to the survey
was sent to masters of education to their official email addresses asking them to complete a
questionnaire. The masters of education who are primary school teachers filled out the
questionnaire of their own free will.

3. RESULTS AND DISCUSSION

245 masters of education (N = 245) who work as primary school teachers in the Republic of
Croatia completed the survey, with 87% of women and 13% of men. Respondents came from
all counties in the Republic of Croatia, with the majority hailing from the City of Zagreb (26%),
Varaždin County (18%), and Split-Dalmatia County (18%). (14 percent). The majority of
respondents (66%) are between the ages of 41 and 60, while 22% are between the ages of 31
and 40. The youngest respondents (7%) are under 30 years old, and the oldest are over 60 years
old (5%).

3.1. Level of application of device protection security measures

When asked what strength of passwords they use to access services and applications, 64% of
respondents answered that they use simple passwords composed of a combination of letters and
numbers that do not provide the expected protection against cyber attacks. Only 13% of masters
of education use a password composed of 10 characters with a combination of letters, numbers,
and special characters, and 8% of respondents use a password consisting of more than 10-
character combinations of letters, numbers, and special characters. Of the surveyed, 15% of
them use the simplest passwords such as a personal name related to their family or words which
provide extremely weak protection, making them vulnerable in the virtual space and possible
targets of cyber attacks.

Table following on the next page

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f %
a password made up of a combination of letters and numbers 155 63,3
10-character password a combination of letters, numbers, and special
32 13,1
characters
my name and / or date of birth or details of my family members 32 13,1
password of more than 10 characters combinations of letters, numbers
20 8,2
and special characters
a word in Croatian or English 6 2,4
Total 245 100,0
Table 1: Password strength for accessing services and applications
used by masters of education
(Source: Authors' research)

When it comes to the level of security of using a password to access Internet services, almost
two-thirds of respondents (69%) answer that they have several passwords that they use for many
services and applications. Only 17% of masters of education apply the highest level of
protection, access to each service or application with a different password. The weakest level
of protection, the use of the same password for all services is applied by 15% of respondents.
According to the results of the respondents on the frequency of changing the password, more
than half of them (53%) change the password when they suspect the possible possibility of
misuse. Almost a third of respondents (32%) do not change their password once while using a
particular service or application, thus exposing themselves to the risk of any form of data
misuse. A small proportion of respondents (15%) apply procedures and behaviors that provide
a higher level of security such as changing the password every few months or once a year.

Figure 1: Password change frequency

(Source: Authors' research)

3.2. Level of application of data protection and storage security measures

When leaving a device in a room where they know people, in order to prevent unwanted access
to their digital devices, less than half of respondents (45%) say that all their devices are
password protected. As no one would be able to access their devices, 21% of respondents say
they turn off the device when they leave the device in a room where people are familiar to them.
Almost a third of respondents answer that they leave the device on because they trust their
friends and acquaintances and thus allow unhindered unwanted access to their devices, content,
and data.

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Figure 2: Preventing unauthorized access to digital devices

(Source: Authors' research)

When it comes to actions they take to preserve the content they are currently working on, 58%
of respondents say that they save changes regularly, during their work. Less than a third of
respondents (23%) include automatic cloud storage, while the weakest security measures,
storage when finished, are used by 19% of respondents. When asked how often they back up
the content they have on their computer, 46% of respondents answered that they do not back
up content at all. On a weekly and monthly basis, 17% of masters of education work on backup
content, thus protecting content from loss, unauthorized use, or compromise of content by
viruses, while 37% of them say that they backup content several times or once a year.

f %
I don't do content backup 112 45,7
several times a year 46 18,8
once a year 44 18,0
monthly 27 11,0
weekly 16 6,5
Total 245 100,0
Table 2: Frequency of using safety back up
(Source: Authors' research)

3.3. The level of application of informed behaviour when using social media
Among the 245 masters of education who responded to the survey, 28 of them (11%) do not
have a profile on social networks, while 15% answered that they do not use their full name on
social networks. Three-quarters of respondents (74%) answered that they have a profile on
social networks with their full name and surname. When asked which free social networks and
applications for messaging they use, the most surveyed masters of education (91%) answered
that they use WhatsApp, 79% use Viber, 70% Messenger, 61% Facebook, and 37% Instagram.
Only 1% of respondents answered that they do not use any social network or application for
free messaging. Based on the frequency of use of social networks and applications for free
messaging, it can be concluded that the presence and activity of masters of education in virtual
space in private and business environment is very high, which implies an increased need to
raise cyber security.

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f %
WhatsApp 224 91,4
Viber 194 79,2
Messenger 173 70,6
Facebook 149 60,8
Instagram 91
37,1
Table 3: The frequency of using social media and applications for free messaging
(Source: Authors' research)

The frequency of certain activities on social networks and applications for free messaging was
examined by estimating the scale from 1 (never) to 5 (very often) for activities such as
messaging, sharing digital materials and documents, sharing photos, posting photos, writing
posts on Facebook, engaging in discussions in Facebook groups and writing comments under a
false name. Respondents give the highest scores for messaging activities via Viber, WhatsApp
and Messenger (4.51), photo sharing (4.05), and digital material and document sharing (3.87).
Masters of education are less likely to post photos on Facebook and Instagram (2.69) and write
posts on Facebook (2.50). Respondents very rarely or never get involved in discussions on
Facebook (1.91) and write comments under a false name (1.05) for which the activity of 95%
of masters of education gave the lowest score 1.

% M SD
1 2 3 4 5
messaging (Viber, Whatsapp,
1,2 0,8 3,3 34,7 60,0 4,51 0,71
Messenger)
exchange of digital material
and documents (Viber, 2,4 8,6 19,6 38,0 31,4 3,87 1,02
Whatsapp, Messenger)
photo exchange 2,4 4,9 15,9 38,4 38,4 4,05 0,97
post photos (Facebook,
20,4 24,9 28,6 15,9 10,2 2,69 1,24
Instagram)
writing posts on Facebook 27,7 24,5 25,7 13.9 8,2 2,50 1,25
engaging in discussions in
44,9 29,8 16,7 5,7 2,9 1,91 1,04
Facebook groups
writing comments under a false
96,0 2,4 1,6 0,0 0,0 1,05 0,29
name
Table 4: Frequency of activities of masters in social media and free messaging apps
(Source: Authors' research)

3.4. Procedures for personal data protection applied by masters of education

In case of suspicion or detection of cyber attacks on personal data of respondents such as their
name and surname, personal identification number, cell phone number, bank details via private
e-mail address or private computer 65% of masters of education answered they would report
such attacks to the police, and 22% would report it to the Personal Data Protection Agency,
while 8% would inform all people from their mailing list. Only 4% of respondents would not
do anything.

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Figure 3: Procedures of masters of education in case of suspicion of cyber attacks on

personal data
(Source: Authors' research)

When it comes to students' personal data and the suspicion or detection of cyber attacks with
the risk of theft, threat, or misuse of students' personal data, more than a third of respondents
(35%) would take at least 3 out of 5 actions. Almost 60% of respondents said they would report
such an attack on students' cyber security to the principal, 42% would inform the student's
parents, 40% would report to the school technical support expert, 37% would inform the school
IT specialist, and 26% would report the case to the school's professional service. The results
additionally show that more than half of the respondents would take at least two or more actions
in case of suspicion or detection of cyber attacks on personal data of students, from which it
can be concluded that the level of awareness of masters of education is very high. To the
question of whether they protect students' personal data better than their own, masters of
education on a scale from 1 (I do not agree at all) to 5 (I completely agree) answered with a
high score of 4.25. Additionally, the data on the percentage of individual grades shows that
77% of masters of education claim that they protect students' personal data better than their
own, giving a score of 4 and 5, which also contributes to the conclusion of high awareness of
the need to protect students' personal data.

% M SD
1 2 3 4 5
2,0 2,9 18,0 22,9 54,3 4,25 0,98
Table 5: Assessment of masters of education on student data protection in relation to their
own
(Source: Authors' research)

When asked if they verify the security of their email account on the "Have I been pwned?"
website, over a quarter of respondents (23%) say they are unaware of such a service, while 38%
of masters of education say they do not check whether their email address has been
compromised. A small percentage of respondents (21%) check when they detect an e-mail
threat, and 14% of masters of education check when they receive an e-mail that appears to be
threatening to them. Only 4% of masters of education who took part in the poll said they check
their e-mail address for possible compromise on a regular basis.

Figure following on the next page

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Figure 4: Compromised Email Address Check

(Source: Authors' research)

The majority of masters of education (70%) working in elementary schools in the Republic of
Croatia who participated in the research were not victims of identity theft or any other type of
data misuse, according to the results displayed in Figure 5. A small percentage of respondents
(14%) are unsure whether they have been victims of personal data theft, while 16% say they
have been victims of personal data, identity theft, or other forms of data misuse.

Figure 5: The percentage of responders who were victims of personal data theft
(Source: Authors' research)

3.5. Masters’ of education knowledge and application of cyber security knowledge

The masters of education who took part in the study rated their understanding of cyber security
on a scale of 1 to 5 (lowest to highest). The average ranking for their level of cyber security
expertise is a poor 3.35. Furthermore, the percentage figures show that the majority of
respondents (76%) evaluated their level of awareness regarding cyber security as 3 or 4, while
only 9% believe their level of knowledge is the highest.

% M SD
1 2 3 4 5
3,3 12,2 39,2 36,7 8,6 3,35 0,92
Table 6: Assessment of cyber security knowledge of masters of education
(Source: Authors' research)

When it comes to the application of cyber security knowledge, masters of education give
assessments that are nearly indistinguishable from assessments of their degree of knowledge on
a scale of 1 to 5.

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The average score is 3.45, with the majority of respondents (75%) giving their knowledge
application ratings of 4 or 5, and only 12% believing they fully apply their cyber security
knowledge.

% M SD
1 2 3 4 5
2,9 10,6 36,7 37,6 12,2 3,45 0,94
Table 7: Assessment of the application of cyber security knowledge of masters of education
(Source: Authors' research)

4. CONCLUSION
The acts and behaviors in cyberspace, as well as their level of cyber security, were linked using
the findings of a study of 245 masters of education who work as primary school teachers in the
Republic of Croatia. Only one-fifth of the surveyed masters of education use passwords
consisting of 10 or more characters of combinations of letters and numbers, from which it can
be concluded that 80% of masters of education are exposed to cyber attacks every day by using
weaker passwords thus becoming vulnerable and exposed to cyber attacks in virtual space.
More than half of masters of education update their passwords only when they sense a probable
threat, indicating that they do not pay enough attention to regular password changes. Regular
content backup is a critical process for content protection that nearly half of the respondents do
not practice at all, implying that they expose their data and content to cyber risks, attacks, and
potential for compromise. Given the results that reveal the high frequency of activities of
masters of education on social networks and applications for free messaging, insufficient
implementation of security measures for the protection of devices and content provides a
persistent risk of attack on their personal data. According to research, at least a third of masters
of education engage in behaviors that leave them vulnerable and easy targets for cyber attacks,
as indicated by the fact that 30% of them have been victims of identity theft or are unsure
whether they have been victims of identity stolen data. The findings of the study reveal that
masters of education have a high level of knowledge of the need to protect students' personal
data as a result of legislation, as well as their willingness to act in the event of a threat to
students' personal data. These findings demonstrate that masters of education are aware of their
obligations and are highly professional. The results of the assessment of knowledge and
application of knowledge on cyber security of masters of education obtained by this study are
almost indistinguishable, but their average value indicates the need to include in systematic
education that would be institutionalized and mandatory at the level of the entire education
system with the aim of raising the level of cyber hygiene. The results of this research can form
the basis for designing a conceptual framework for educational programs in the field of personal
cyber security management of educators.

ACKNOWLEDGEMENT: Publication of this paper was supported by the University North,

to which the authors of the article are grateful for substantial support.

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