Falling behind and in between the United States and China: can the European Union drive its digital transformation away from industrial path dependency?

Patricia Nouveau

Chapter 11 in EU Industrial Policy in the Multipolar Economy, 2022, pp 332-381 from Edward Elgar Publishing

Abstract: Can the European Union drive its digital transformation away from industrial path dependency? The increasingly pervasive importance of digital industries in all stages of the economy has revealed Europe's growing reliance on foreign technologies, that are better-served or only served by US and Chinese firms. US-China rising confrontation over technological hegemony compromises the ability of EU Member States to make autonomous choices in terms of digital policies and supplies. Europe's perceived drift towards technological and political disempowerment brings into question the industrial policy path followed by the EU. EU industrial policy instruments have remained constant over the years: on the one hand coordinating decentralized Member States' Research & Development policies to boost digital innovation, and on the other hand setting Europe-wide norms to help innovating companies scale up and reinforce their market position worldwide. Results failed to materialize, and the digital gap kept on widening, recognition of which has entailed the adaptation of EU digital objectives from a full catch-up policy to a specialization strategy recentred on the current digital transformation of European industry. The perpetuation of failing policies, this chapter shall argue, is strongly linked to the long-standing resilience of technological rivalries between Member States and between their national champions, which have structurally shaped industrial policies and the related EU institutional framework.

Keywords: Business and Management; Economics and Finance; Law - Academic; Politics and Public Policy (search for similar items in EconPapers)
Date: 2022
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