EU lagging behind US due to lack of ICT knowledge, finds report

April 29, 2004

Brussels, 28 Apr 2004

A report published by the Economist Intelligence Unit (EIU) has warned that European economies are significantly lagging behind the US because of their failure to develop IT skills, innovation, and research and development (R&D).

The survey, entitled 'Reaping the Benefits of ICT [information and communications technology]: Europe's Productivity Challenge' calls for European countries to make better use of their investments in technology if they want to remain competitive with the US.

Despite an EU-wide investment in information and communication technology (ICT) of around 1.9 trillion euro between 1995 and 2001, this has not led to an improvement in either productivity or economic growth, says the report.

'People who want to see the European Union deliver on its Lisbon agenda, to catch up with the US within a decade, will be disappointed, because it is not happening,' stated Laza Kekic, director of country forecasting at the EIU.

Between 1995 and 2002, the US' average annual growth in gross domestic product (GDP) per capita was 0.52 percentage points higher than in France, Germany and Italy. According to the EIU, the US' effective use of ICT accounts for 0.4 percentage points of that difference. Furthermore, the report predicts that the gap will persist over the next few years.

'The issue is not a lack of investment in ICT by European companies and governments,' said Daniel Franklin, editorial director at the EIU, in a statement. 'The research suggests that it is deficiencies in Europe's policies and business practices that prevent Europe from preaching the productivity performances achieved by the US.'

The US outperforms all countries in the quality of its ICT infrastructure. However, it is closely followed by Sweden, Denmark and Finland, as well as the UK, Norway and the Netherlands. Germany, France and Italy, on the other hand, are far behind. Indeed, out of 26 countries surveyed, they ranked 18th, 17th and 22nd respectively. According to the survey, the greatest barrier to maximising the benefits of ICT is senior management's lack of understanding of ICT. The survey also claims that without policy and cultural changes, many European countries will not be able to profit from their investments in ICT. CROSOFT_FINAL.pdf

CORDIS RTD-NEWS / © European Communities

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