Digital Transformation as a Lever for Economic Diversification in a Hydrocarbon-Dependent Economy: Survey Evidence from Algeria

Abstract

Algeria presents digital transformation as one of its main routes away from hydrocarbon dependence, but there is little evidence on whether people working inside the economy see digitalisation changing its structure. This paper uses a survey of 124 respondents in Mascara province, read against national policy documents and UN e-government indicators, to examine the relationship between digital transformation and perceived economic diversification. Digital transformation is measured on four dimensions: strategic vision, infrastructure readiness, service quality and financial readiness. Respondents rate overall digital transformation (M = 3.34) and diversification (M = 3.36) as moderate on a five-point scale. A simple regression of diversification on overall digital transformation gives β = 0.74 and R² = 0.55, and each dimension is individually significant. The dimensions differ sharply, however. Strategic vision is rated favourably but explains only 9 per cent of the variance in diversification, whereas infrastructure, the lowest-rated dimension (M = 2.87), explains 31 per cent. Ratings do not differ by gender, education or sector. We read the results as describing a latent rather than a realised diversification lever, in which operational foundations matter more than declared strategy. Because the sample is non-probabilistic and both scales come from the same respondents, the findings are associations, not causal estimates.