From Statistics Explained
- Data from October 2011. Most recent data: Further Eurostat information, Main tables and Database.
This article analyses data on high-technology or 'high-tech' sectors in the European Union (EU) and in some EFTA and candidate countries. Creating, exploiting and commercialising new technologies is essential in the global race for competitiveness and high-tech sectors and enterprises are key drivers of economic growth, productivity and social protection, and generally a source of high value-added and well-paid employment.
High-tech can be defined according to three different approaches:
- the sector approach looks at the high-tech manufacturing sector, medium high-tech manufacturing sector, and high-tech knowledge-intensive service sector, focusing on employment, and economic indicators as shown in Table 1;
- the product approach considers whether a product is high-tech or not and examines trade in high-tech products;
- the patent approach distinguishes high-tech patents from others and also defines what biotechnology patents are.
Main statistical findings
Economic statistics on high-tech
In 2008, the European Union had almost 50 000 enterprises in high-tech manufacturing and 756 000 in high-tech knowledge-intensive services (Table 1). High-tech manufacturers were most numerous in Germany, United Kingdom, Italy and France, all together accounting for around 55 % of the high-tech sector in the EU. The United Kingdom displayed the greatest number of enterprises in the high-tech knowledge-intensive services (KIS) sector (144 006), comprising almost one-fifth of the EU total, followed by Italy and Germany.
An interesting picture emerges when considering turnover; Germany led the way in 2008, with a total turnover and value added almost twice as high as in the countries with comparable numbers of high tech manufacturers. Germany's turnover represented almost one-fourth of EU total in 2008 rounded to EUR 128 billion in high-tech manufacturing, ahead of France (EUR 76 billion) and Italy (EUR 50 billion). The value added was distributed in 2008 in a similar way with the higest contribution of Germany close to EUR 41 billion, followed by France and United Kingdom (EUR 20 billion each).
Turning to the high-tech KIS sector, in 2008, the European Union had 756 thousand enterprises in high-tech knowledge-intensive services, 33 % of which were registered in the United Kingdom and Italy with 144 000 and 104 000 respectively. However, what it is striking is that the turnover, production value and value added figures were practically twice as high in the United Kingdom as in Italy. One of the main reasons for this is the size class of enterprises and a prevailing share of small and medium-sized enterprises (SME).
Employment in high-tech
In 2010, 34 million people were employed in the manufacturing sector in the EU-27, representing 15.9 % of the total employment. Out of 34 million workers, 2.3 million were employed in high-tech manufacturing what equals to 1.1 % of total employment. High-tech KIS sector in 2010 was more than double that of high-tech manufacturing and accounted for 2.7 % of total employment. The shares of both manufacturing and services in the high-technology sectors in total employment varied considerably from one country to another. High-tech manufacturing shares ranged from 0.2 % in Cyprus, 0.3 % in Turkey, 0.4 % in Portugal, Norway and Croatia to 3.1 % in Ireland, 2.8 % in Switzerland and Hungary, and 2.6 % in Malta. Discrepancies in terms of the proportion of high-tech KIS in total employment were also observed across countries. The biggest share of more than 4 % was recorded in Former Yugoslav Republic of Macedonia, Iceland, Sweden and Denmark, and the lowest below 1.9 % was found in Portugal, Poland, Greece, Lithuania, Romania and Turkey. (see Table 2)
At the EU level, over the period 2008–2010, the number of employed persons in the manufacturing sector decreased by roughly 4.5 % a year. The high-tech manufacturing recorded a little slower fall of 4.3 % a year. This decrease in employment can be partially explained by the economical crisis in 2010 affecting numerous European countries. The impact of the crisis was also observed in the services sector which did not record any growth from 2008 to 2010, while up to 2008, this sector used to generate new jobs at the pace of 2 % a year. At the same time, the high-technology services (KIS) showed a certain resistance to crisis and recorded a rise in the number of jobs at the level of 0.3 % on average per year from 2008 to 2010. Some important differences emerged when comparing the employment change among countries with significant growth on the one hand, and equally significant decline on the other. Twenty-three out of thirty-three observed countries registered a fall in the employment in high-tech manufacturing in the period 2008–2010, with the biggest fall of 28 % recorded in Cyprus and Croatia and 26 % in Portugal. Growth in high-tech manufacturing was observed in the following five countries: Turkey (15 %), Switzerland (3 %), Denmark (1 %), Slovenia (1 % ) and Estonia (0.2 %). In high-tech KIS the loss was more moderate. Eleven countries registered a decline. The biggest job loss was reported in Malta (-16 %), Cyprus (-10 %) and the United Kingdom (-8 %). The best performing countries in terms of growth of the employment in high-tech KIS were: Turkey (27 %), Luxembourg (14 %), Slovakia (10 %), Belgium and Czech Republic (8 %).
Table 2 compares also the percentages of women of both high-tech sectors with the respective total in manufacturing or services.
In the EU-27, women accounted for 29.6 % of the employment in manufacturing and this share reached 39.2 % in high-tech manufacturing. However, even if in general the shares of women were higher in high-tech manufacturing than in manufacturing, the gender balance in high-tech manufacturing was in favour to women (above 50 % of all the employed) only in five countries: Portugal, Slovakia, Czech Republic, Slovenia and Hungary.
In contrast, high-tech KIS sector, as compared to total services sector, showed lower shares of women in all countries with the EU average of 30.8 % in high-tech KIS and 54.4 % in services. Moreover, in high-tech KIS none of the countries reached the gender balance. For high-tech KIS the lowest share was recorded in the Former Yugoslav Republic of Macedonia (10.5 %), the Netherlands (21.3 %) and Turkey (23.4 %). On the other hand, women were relatively strongly represented in Bulgaria (43.8 %), Lithuania (38.6 %) and Romania (36.0 %). The reasons behind the lower female participation in high-tech KIS lay in the specificities of sectors included in that aggregate: Computer programming, Scientific research and development, Telecommunication, and corresponding occupations which apparently remain more popular among men.
Trade in high-tech products
Trade in high-tech products refers to the import and export of products identified as being of high-technology. The high-tech products are divided in 9 groups: ‘Aerospace’, ‘Armament’, ‘Chemistry’, ‘Computer -office machines’, ‘Electrical machinery’, ‘Electronics - telecommunications’, ‘Non - electrical machinery’, ‘Pharmacy’, ‘Scientific instruments’. On the global level, the export value of high-tech products represented around 16 % of all exports value in 2009. The two groups of products together, i.e. ‘Electronics – telecommunication’ and ‘Computer – office machines’ accounted for 63 % of high-tech exports worldwide (Figure 1). ‘Scientific instruments’, ‘Aerospace’ and 'Pharmacy' jointly mounted up to for one fourth of global high-tech exports. By contrast, ‘Chemistry, ‘Non-electrical machinery’, ‘Electrical machinery’ and ‘Armament’ summed up to a mere 10% of total high-tech exports.
In 2009, the three world leaders in terms of exports of high-tech products were China (21.6 %), the EU (15.9 %) and the United States (13.5 %), the value for US being based on 2008 data. Hong-Kong ranked at the fourth position with a share of 8.1 %. Japan, which remained until 2007 the fourth biggest exporter of high-tech goods, fell to the sixth position with a share of 6.2 %. Two other countries: Singapore and South Korea recorded also significant shares of 6.2 % and placed themselves at the level of Japan. The high performance of Hong-Kong and Singapore, both being relatively small Asian countries was driven by the important number of transiting high-tech products. Those two countries owe their ranks to the hub effect and re-exports of goods. ‘Other Asian countries’, Malaysia, Switzerland and Mexico registered their shares in exports of high-tech products ranging from 5.3 % to 2.4 %. Close behind came Thailand, Canada and Philippines with shares between 1.8 % and 1.1 %. The remaining main EU partners, Israel, India, Norway, Russian Federation, Indonesia, Brazil and Australia each recorded global export shares in high-tech products below 1%.
In 2009, the 21 largest exporting countries (entities) accounted for 98.6 % of global exports in high-tech products.
High-tech employment at regional level
Figure 2 shows the regional discrepancies in high-tech sectors (by NACE Rev. 2) as a share of total employment. This figure combine the national average for each country as well as the regions with the lowest and highest shares of employment in high-tech sectors. At EU-27 level, the high-tech sectors (high-tech manufacturing and high-tech KIS) represented 3.7 % of total employment in EU-27 in 2010 with two-thirds of persons occupied in high-tech knowledge-intensive services one-third occupied in high-tech manufacturing.
The national and regional highest and lowest shares vary significantly from country to another and some significant discrepancies can be observed at the regional level in the countries.
With regards to national averages, 18 out of 32 observed countries registered values higher than the EU-27 average (3.7 %) with the rates of more than 5.0% in Ireland, Finland, Switzerland, Denmark, Malta, Slovenia and Hungary. On the other hand, the lowest national shares of high-tech sectors in total employment below 2.5 % were registered in Portugal, Greece, Cyprus, Lithuania, Romania and Turkey. It must be noted that 6 European countries (Estonia, Cyprus, Latvia, Lithuania, Luxembourg and Malta) and Iceland are classified only at country level, taking into account the regional data presented in Figure 2.
At regional level, especially capital regions or those situated close to capitals, high shares of employment in high-tech sectors are often observed. Berkshire, Buckinghamshire and Oxfordshire (United Kingdom), situated in close proximity to London, stood out with 9.7 % of their labour force in high-tech sectors. The following regions rated similarly: Hovedstaden (DK) with 9.5 %, Province Brabant Wallon (BE) with 8.9 %, Stockholm (SE) with 8.7 % and Praha (CZ) with 8.0 %. By contrast, the lowest shares of less than 1 % were registered in Samsun (TR), region Nord-Est (RO), Dytiki Ellada (EL), and Región de Murcia (ES). Spain, Romania, Turkey, France, the United Kingdom and Poland, showed the biggest regional discrepancies when assessed by the ratio of the highest share to the lowest share. The lowest discrepancies in employment between regions were observed in Ireland, Switzerland, Slovenia, the Netherlands and Slovakia.
Data sources and availability
High-tech statistics uses various other domains and sources mainly within Eurostat's official statistics (CIS, COMEXT, HRST, LFS, SBS, SES, PATSTAT and R & D). Its coverage and availability is therefore dependent on these other primary sources.
The sectoral approach is an aggregation of manufacturing industries according to technological intensity (R & D expenditure/value added) and based on the Statistical classification of economic activities in the European Community (NACE) at 2- or 3-digit level for compiling aggregates related to high-technology, medium high-technology, medium low-technology and low-technology. Services are mainly aggregated into knowledge-intensive services (KIS) and less knowledge-intensive services (LKIS) based on the share of tertiary educated persons at NACE 2-digit level.
Note that due to the revision of the NACE from NACE Rev. 1.1 to NACE Rev. 2 the definition of high-technology industries and knowledge-intensive services changed. For high-tech statistics it means that two different definitions (one according NACE Rev. 1.1 and one according NACE Rev. 2) are used in parallel and the data according to both NACE versions are presented in separated tables depending on the data availability.
Within the sectoral approach, a second classification has been created - Knowledge Intensive Activities - based on the share of tertiary educated people in each sectors of industries and services according to NACE at 2-digit level and for all EU 27 Member States. A threshold was then applied to rank sectors as knowledge intensive. In contrast to first sectoral approach mixing two methodologies one for manufacturing industries and one for services, the KIA classification is based on one methodology for all the sectors of industries and services.
The aggregations in use are total Knowledge Intensive Activities (KIA) and Knowledge Intensive Activities in Business Industries (KIABI). Two versions are in use also for Knowledge Intensive Activities one according NACE Rev. 1.1 and one according NACE Rev. 2. The data in this article are according NACE Rev. 2.
The product approach was devised to complement the sectoral approach. The product list is based on the calculations of R & D intensity by groups of products (R & D expenditure/total sales). The groups classified as high-technology products are aggregated on the basis of the Standard international trade classification (SITC). The product approach is used for data on high-tech trade.
Due to the revision of SITC from SITC Rev. 3 to SITC Rev. 4 the definition of high-tech products has also changed. The data in this article are according SITC Rev. 4.
High-tech patents and biotechnology patents are defined according to the patent approach. The groups are aggregated on the basis of the International patent classification (IPC) - 8th edition. Biotechnology patents are also aggregated on the basis of the IPC - 8th edition.
For more detailed information of the various high-tech definitions see:
- High-tech aggregation by NACE Rev. 1.1
- High-tech aggregation by NACE Rev. 2
- Knowledge Intensive Activities by NACE Rev. 1.1
- Knowledge Intensive Activities by NACE Rev. 2
- High-tech aggregation by SITC Rev. 3
- High-tech aggregation by SITC Rev. 4
- High-tech aggregations by patents
Investment in research, development, education and skills is one of the European Union’s central policy areas. These key areas are essential to economic growth and to the development of the knowledge-based economy. The Europe 2020 strategy sets out a vision of Europe's social market economy for the 21st century. It aims to turn the EU into a smart, sustainable and inclusive economy that delivers high levels of employment, productivity and social cohesion. Innovation is a motor for economic progress: it is therefore a key element of Europe 2020.
Europe 2020 puts forward three priorities that go together and reinforce each other:
- smart growth: developing an economy based on knowledge and innovation;
- sustainable growth: promoting a more resource efficient, greener and more competitive economy;
- inclusive growth: fostering a high-employment economy, delivering social and geographical cohesion.
The European Commission has defined seven flagship initiatives to create progress under the Europe 2020 strategy. One of these is the "Innovation Union", supporting ‘Smart growth’. The Innovation Union initiative improves the framework for research and innovation in the EU. It also improves the access to finance. The aim is to ensure that innovative ideas can be turned into products and services that create growth and jobs.
A key element of the Innovation Union is to complete the European Research Area (ERA). ERA aims to increase the competitiveness of European research institutions by bringing them together and encouraging a more inclusive way of work. Increased mobility of knowledge workers and deeper co-operation among EU research institutions are central goals of ERA.
ERA should inspire the best talents to enter research careers in Europe and stimulate industry to invest more in European research. It enables European researchers to develop strong links with partners around the world, so that Europe benefits from the progress of knowledge worldwide, contributes to global development and takes a leading role in international initiatives to solve global issues.
However, there are still national and institutional barriers which limit the development of ERA. In 2008, the European Commission and the Member States launched new initiatives to develop ERA, including the ‘Ljubljana Process’ to improve the political governance of ERA. Several initiatives on specific areas have been initiated. These initiatives aim at establishing partnerships with Member States and business, universities and research organizations to develop the ERA in their specific field.
One of these five new initiatives intends to create a European Partnership for Researchers for mobility and career development. Improving the mobility of researchers will improve the flow of knowledge throughout Europe, balance demand and supply for researchers at the European level, help create centres of excellence and improve the skills of researchers in Europe. Improving career prospects for researchers in Europe will stimulate more young people to choose a research career, help keep researchers in Europe and attract more talented non-European researchers.
Further Eurostat information
- Science, technology and innovation in Europe - Pocketbook, 2011 edition
- Science and technology, see:
- High-tech industry and knowledge-intensive services (t_htec)
- Science and technology, see:
- High-tech industry and knowledge-intensive services (htec)
- High-tech industries and knowledge-intensive services: economic statistics at national level (htec_eco)
- High-tech industries and knowledge-intensive services: employment statistics at national and regional level (htec_emp)
- High-tech industries and knowledge-intensive services: science and technology statistics at national and regional level (htec_sti)
Methodology / Metadata
- High-tech industry and knowledge-intensive services (ESMS metadata file - htec_esms)
- Decision 1608/2003 of 22 July 2003 concerning the production and development of Community statistics on science and technology (Legal text)
- Regulation 753/2004 of 22 April 2004 implementing Decision 1608/2003/EC as regards statistics on science and technology (Legal text)
- European Commission - Europe 2020
- European Commission - Research - ERA
- Innovation Union Competitiveness Report 2011
- European Commission - Enterprise and Industry - Industrial innovation: Innovation Union Scoreboard
- OECD - Statistical analysis of science, technology and industry