The Role of European Funds in Accelerating Digitalization and Human Capital Development: Impact on Poverty Reduction and Economic Growth

This paper examined the role of European funding in promoting digital transformation by focusing on improving the level of development and innovation of human capital, emphasizing its role in poverty reduction, but also economic development. By supporting e-vocational training programs and initiatives focused on critical thinking and digital skills, these funds help to adapt the workforce within the limits of the evolving requirements of the contemporary economy. As a result, they not only increase employability, but also encourage social inclusion, promoting entrepreneurship, allocating the necessary resources to maintain a level of competitiveness in an economic environment that is constantly changing. The European Commission has required European states to implement the components of the European Social Fund used through a decentralized management framework, established by a common agreement, while ensuring compliance with the principle of sound financial management by the national authorities that are designated. The purpose of this research is to assess the level to which European funds have supported this current digitization process and the way in which human resources in Romania have developed and how these factors lead to poverty reduction and economic growth. The study explored the relationship between the absorption rate of European funds and GDP growth through a linear regression model. The findings underline the existence of a statistically significant positive correlation, indicating that each one-unit increase in the absorption rate leads to an increase of RON 723,798 million. The model demonstrates the existence of a high degree of power, about 82.9% of the GDP variation stimulates economic performance.