The Uneven Development Paradox of the High-Tech Sector Amid a Comparable Economic Growth in the European Union and the United States

Z. A. Mamed’yarov ()
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Z. A. Mamed’yarov: Primakov Institute of World Economy and International Relations, Russian Academy of Sciences

Studies on Russian Economic Development, 2021, vol. 32, issue 5, 555-563

Abstract: Abstract In recent decades, the European Union has placed great emphasis on the development of the high-tech sector by increasing R&D spending and subsidizing science-based small and medium-sized enterprises (SMEs). This policy has intended to close the gap in the development of high-tech industries between the European Union and the United States, thereby strengthening the European economy. However, despite the relatively low development of the European high-tech sector, the GDP indicators of the United States and the European Union demonstrate convergence over time. In this paper, this paradox is explained by differences in the industry specialization and integration between the European Union and the United States. These differences are observed when analyzing the input–output tables with the data on sales flows between different types of industries and consumers. The results show an underestimation of the integration of traditional industries in Europe. This means that the economic growth is stimulated not only by the (high-tech) industry specialization but also by the integration of (traditional) industries.

Keywords: high-tech industries; innovative development; input–output; industry specialization; innovation (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1134/S1075700721050075

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