The European digital economy continues to lag behind

‘Digital Decade’ wishful thinking The European digital economy continues to lag behind

05/16/2022From dpa-AFX

Germany and other EU countries are falling further and further behind in the digital economy compared to China, South Korea and the USA. This is the main finding of a study conducted by two researchers at the University of Bonn on behalf of the Konrad Adenauer Foundation.

The diagnosis contradicts the statements of the European Union Commission. “The planned digital contract will not put Europe in a position to compete for ‘digital leadership’ at the global level,” says the study, now published in Berlin.

Researchers Maximilian Mayer and Yen-Chi Lu developed a “Digital Dependence Index” (DDI) for their analysis, which shows the relationship between domestic demand and external supply of digital technologies. No region in the world achieves the ideal value between 0 and 0.25.

The US is the only leading economy with a DDI just below 0.5. This scale means that the local display provides the majority of digital technologies. This puts the United States of America in the best position when it comes to trade in digital goods and services, in the field of information and communications infrastructure and in intellectual property rights for digital technologies.

“Severe weakness in the digital economy”

In the study, China comes in second with a DDI of 0.58, South Korea is third with 0.66, and Germany and other EU countries cross the 0.75 threshold, indicating significant weakness in the digital economy. In this context, the authors question whether large-scale EU projects such as the Gaia-X cloud initiative are the right choice to become the flagship of ambitions in terms of technological independence.

How far Europe lags behind can also be seen by the number of patents granted in the context of the digital economy. “US, Chinese and South Korean companies are filing more and more ICT-related patents,” the study said.

Germany has a DDI of 0.82, which is only reasonably well positioned when it comes to trading in the digital economy. On the other hand, the dependence on foreign digital platforms is very high. There is also a significant intellectual property shortfall.

Therefore, the claim to digital sovereignty in Germany is unrealistic and akin to the proverbial battle against windmills. A more realistic goal would be to put in place policies that shift the level of economic dependency from “extreme weakness” to “weak weakness”.

(No.: 48283025)