The objective of this study is to examine the impact of digitalization on regional differences in economic growth within the European Union. A two-phase approach is applied, studying panel data spanning 22 nations and 240 regions from 2011 to 2021. The first phase focuses on economic growth, while the second estimates the effects of digitalization on inequality. In both stages, dynamic models are applied and the predictor variable is the digitalization index. The study's conclusions show that digitalization significantly boosts local economic expansion. The significance of human capital in the rise of digital technology is made apparent by the fact that areas with higher levels of digital competencies and integration also exhibit better economic performance. The study also shows that regional disparities within the EU are lessened by digitalization. This shows that, to combat economic inequality at the regional level, digitalization can be a useful tool.