Europe must learn from the decline of its digital industries

Posted by Eberhard Rhein on 22/01/14

Humanity is set to produce some 2.5 billion (!) smart phones, tablets and computers in 2014: one device for every three inhabitants of the planet. Smart phones have become the indispensable means of communication, sharply boosting productivity in certain fields.

This development is taking place without an active European contribution: European companies have largely abandoned research and production in the most dynamic sector on earth. American and Asian companies, led by Apple and Samsung, have taken their place.

For the first time in history Europe has ceased to be in the lead of a strategic industrial sector. Nobody seems to be concerned about or to complain. Everyone seems perfectly happy with being able to buy the equipment from other continents at extremely low prices reflecting new divisions of international division of labour.

Success in this sector depends on research and assembly lines suited to manufacture hundreds of million pieces!

This is neither European tradition nor strength. It is therefore not surprising for European companies to go out of business. After having been one of the global leaders in handy manufacturing for the last two decades NOKIA has been the last one to sell its hardware business to Microsoft last year.

These developments seem to be irreversible; but they need not be a tragedy, provided Europe seizes the opportunities offered by digital software in areas where it has made great strides in the last two decades: combining digital technology and machine/machine tool manufacturing.

The progressive loss of competitiveness in a pivotal sector like smart phones and computers should, however, convey a simple message to European business leaders and politicians: Competitive superiority will disappear very fast if one stands still and falls asleep.

Eberhard Rhein, Brussels, 16/01/2014

 

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