Introduction

In modern conditions of globalization and digitalization technology stays as a key factor in increasing the competitiveness, intensity and profitability of business. High-tech industries are developing especially quickly and actively in world trade, thereby ensuring the growth of not only the country’s economy, but also its science. High-tech production is one of the most knowledge-intensive industries. [19, С.701] High-tech industries include aerospace engineering, computing, robotics, microelectronics, pharmaceuticals, microbiology, nuclear energy and telecommunications. Over the past 10 years, trade activity in these industries has increased rapidly worldwide, which is directly related to the development of telecommunications enterprises, scientific and technological progress and global digitalization.

Methodological basis of the study

In this article the author used general scientific research methods such as methods of system analysis, synthesis, the method of comparisons and analogies, as well as formal logical, graphical methods and the transition from the general to the particular.

Governmental spending on Research and Development in the EU

According to Eurostat, government spending on research and development (R&D) in the European Union in 2023 increased by 5,3% and amounted to 123,684 billion euros or 0,73% of GDP. This indicator increased by 54,8% compared to the statistics of 2013. Per capita government spending on R&D in the European Union in 2023 increased to 275,6 euros compared to 262,7 euros in 2022. Ten years ago, in 2013, they amounted to 181 euros. This figure in 2023 was the most significant in Luxembourg (646,6 euros per person), Denmark (552,4 euros) and Germany (529,3 euros). At the same time, the lowest values were recorded in Romania (21,2 euros), Bulgaria (33,1 euros) and Hungary (48,1 euros). In 2023, the largest part of the allocations from the EU state budget in the field of R&D was directed to general education needs in state university-wide funds – 35,5%. Also, 17,3% of the total expenditure of funds were allocated to other educational projects, 11% — to industrial production and technology, 6,9% — to healthcare, 6% — to space research, and about 4% — to the defense sector. Comparative analysis of the EU R&D expenditures in some countries of the Union is presented in the Table 1.

Table 1

Expenditures of the European Union countries on R&D, billion euro [2]

As it is seen due to the data in Table 1, the two leading economies of the EU – Germany and France — spent the most among all the EU members. On average, 2,2% is spent on R&D in the EU, but the distribution of expenditures in this area across countries is extremely uneven. This fact confirms the level of socio-economic and financial differentiation within the EU.

Tendencies of the high-tech production in the EU

The development of high-tech production is one of the key areas of EU activity. Investment in research, development, innovation and skills is a key EU policy area as it is essential for economic growth and the development of a knowledge-based economy. [20, С.21] According to the EU development strategy, high-tech manufacturing plays an important role in climate, environmental, economic and digitalization issues.

However, over the last decade from 2012 to 2022 we note a trend towards a decrease in the EU share in the production of high-tech goods (Table 2), as evidenced by indicators that decreased from 23% to 17% over the specified period of years. In addition, there is a contradiction associated with EU policy arises simultaneously, which has recently been aimed at developing this industry. However, here it is worth noting the key role of other associations, primarily BRICS, in whose countries the increase in production of high-tech goods over the same period uplifted from 10,4% to 31,1%. Also it’s worth noting that the indicators of the North American Union showed the same percentage decline as the indicators of the EU. Thus, we can say that BRICS is “squeezing out” both the EU and the USMCA from global production.

Table 2

 Share of high-tech production in the EU, USMCA and BRICS from the world volume for the period from 2012 to 2022, % [2]

However, in comparison to the two Western blocs, the priority position of the North American unification is the most evident. All technical production as computers, communications, semiconductors and scientific equipment in North America throughout the period under review was multiple times higher. However, according to the table, production within the pharmaceutical industry in the EU is at a consistently high level compared to the global average. At the same time, when independently examining the share of production of the main European countries and the United States, there is a significant gap between them (Table 3).

Table 3

 Participation of the three leading EU countries and the USA in industrial high-tech production, % [2]

According to the Table 2, the share of production of the largest European countries in the world production of high-tech products does not exceed 0,1, while the US share in some industries is more than half of global indicators. [1]

Most profitable high-tech export sectors of the EU

By the data of Eurostat, for the period 2012-2022, the EU’s international trade in high technologies and high-tech products showed an average annual growth of approximately 6%, which over a ten-year period meant an increase in profits from 259 billion dollars to 446 billion dollars (picture 1).

Picture 1. EU exports of high-tech products by product group, 2012-2022, billion euro [3]

In 2022, the most profitable high-tech export sector for the EU was pharmaceuticals. Exports of pharmaceutical products to countries outside the European Union amounted to 145 billion dollars. Also, exports of pharmaceutical products for the period 2012-2022 showed the largest annual growth of 13%. It is worth mentioning here again that pharmaceuticals were one of the few industries that managed to keep production levels at a fairly high level for a decade. Key trading partners for the EU were the US, China and the UK, accounting for 26%, 12% and 9% of exports respectively (Picture 2).

Picture 2.  EU exports of high-tech products, top 6 partners, 2012-2022, billion euro [3]

According to the data on the Picture 2, the bulk of exports to all mentioned leading countries were pharmaceuticals, telecommunications equipment and scientific equipment. [21, С.888]Thus, we see rather diversed European high-tech product structure to top six world countries.

Catching up the USA in ICT-technologies: is it real?

As a result of the analyzed data, it can be noted that the European Union is by no means a leader in ICT technologies, the United States take precedence in them. Thus, the capitalization of the largest American corporations of the FAMGA group (Facebook, Apple, Microsoft, Google, Amazon) reaches more than 4 trillion dollars. Overall, according to UNCTAD, these five “super platforms”, as well as two Chinese companies – Alibaba and Tencent – ​​account for two-thirds of the total capitalization of the global ICT market. Therefore, as UNCTAD experts rightly point out, in the global value chain, many countries may find themselves in a dependent position due to the fact that value creation and data are largely controlled by just a few of these global “super platforms”.

Such monopolization is extremely disadvantageous for the EU. Thus, according to the European Commission (EC), Google pays less than 1% taxes on its revenue in EU countries. The US has resisted attempts to introduce a digital tax, but since January 2020 it has been introduced in France, Austria, Hungary, Italy and Turkey, and 9 European countries are preparing to introduce it. Under such circumstances, some Western experts are considering the option of integrating Europe into Chinese technological standards (5G), which involves excluding the United States from them and depriving the West of a technological advantage.

Conclusion

In order to prevent such a turn of events, the EU adopted the EU Digital Strategy in February 2020, the main goal of which, as stated in the document, is to achieve global leadership in the field of creating artificial intelligence (AI). It is difficult to determine how it will be implemented, since economic difficulties in the EU are only increasing. [22, С. 608]

The EU is betting on an accelerated transition to a new technological structure, primarily to the digitalization of the economy. But, as UNCTAD experts note, the digital revolution can create enormous opportunities, but also enormous difficulties. Thus, in the face of challenges and threats, the EU faces the task of strengthening government support for the development of high-tech in order to achieve a higher level of international competitiveness in the field of innovation.