Deindustrialization and the technological intensity of manufacturing subsystems in the European Union

Abstract

This paper provides new and deeper evidence on the extent and the main characteristics of the deindustrialization process in the EU27 over the period 1995‒2011. This evidence is linked to the debate on the “manufacturing imperative” and the need for a renewed approach to industrial policy in the European Union. To investigate the issue, we adopt a subsystem approach, based on input‒output tables from the World Input‒Output Database, and decompose subsystems according to three different technological taxonomies. The analysis shows that the deindustrialization process affecting the EU27 is not homogeneous. Great differences exist between the EU15 and the other EU countries and among the technological classes of manufacturing. This evidence confirms and better delimits the effects of the hierarchical reorganization of the EU’s industrial structure and of the processes of intra-European offshoring described in the literature. The general result is that the horizontal industrial policies, and in particular the horizontal innovation policies promoted since the early 1990s, appear to have failed to achieve the objective of strengthening the influence of high-technology production on economic growth across the European economies.