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1. Quantum Technology: A Policy Primer for EU Policymakers

Author:
Oscar Guinea, Dyuti Pandya, Oscar du Roy, and Andrea Dugo
Publication Date:
01-2025
Content Type:
Policy Brief
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
Quantum technology is rapidly emerging as a transformative force with the potential to reshape industries ranging from finance and pharmaceuticals to automotive and aerospace. In 2024 alone, investments in quantum technology reached over USD 56 billion. Its development, however, presents unique geopolitical challenges, stemming from its applications in defence and encryption, as well as its power to unsettle established comparative advantages and market specialisations across countries. Against this backdrop, an open and collaborative approach to quantum innovation is critical for maximising the benefits of this technology. Countries perform more effectively in quantum technology when they support cross-border collaborations and market specialisation. Firms producing quantum hardware or software solutions can sell to a range of industrial users who, in turn, integrate these cutting-edge systems into goods and services. Such synergy reduces the overall risks and costs of R&D, as different partners share both the financial burden and any uncertainties related to the commercial viability of quantum applications. Moreover, collaboration fosters a wider diffusion of quantum technologies. As firms specialising in quantum computing, communication, or sensing deepen their expertise, their insights permeate adjacent sectors through the shared knowledge enabled by joint collaborations. Conversely, restrictive policies that limit interaction between domestic and foreign firms risk stifling innovation. Self-reliance strategies reduce opportunities for knowledge-sharing, limit the pool of potential partners, and ultimately slow the pace of quantum breakthroughs. This operating framework supports the current EU approach to quantum technology, which emphasises openness and encourages a higher number of collaborations between EU and non-EU companies. This approach is grounded in economic realities: the EU ranks second only to the US in terms of the number of companies and collaborations between firms and it thrives on partnering with non-EU countries as the number of collaborations with companies outside the EU far exceeds the number of collaborations within the EU.
Topic:
European Union, Digital Economy, Digital Policy, and Quantum Computing
Political Geography:
Europe

2. The Impact of Increased Mass Litigation in Europe

Author:
Fredrik Erixon, Oscar Guinea, Dyuti Pandya, Vanika Sharma, Elena Sisto, Oscar du Roy, Renata Zilli, and Philipp Lamprecht
Publication Date:
03-2025
Content Type:
Working Paper
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
The purpose of this study is to better understand the growth of mass litigation in the European Union (EU) and its economic consequences. European authorities have long encouraged consumers to seek redress through private litigation in European competition law and, more recently, they have shifted their focus towards collective actions in a broad range of areas, including data privacy and product liability. Facilitating access to justice through collective actions is not a cost-free option. Unfortunately, there is a lack of economic analysis on the consequences of an increase in collective action cases in the EU. It is crucial to understand the economic consequences of a “mixed regime” – that is, a regime based on both ex-ante public enforcement through regulation and ex-post enforcement through private litigation. The combination of these two enforcement models raises questions about how the system is intended to work together and what the consequences might be for the economy. This study examines the economic implications of these developments in the EU.
Topic:
Law, European Union, Regulation, Regional Economy, and Litigation
Political Geography:
Europe

3. Regulating the Working Conditions of Platform Work: What Can We Learn from EU Member States?

Author:
Oscar Guinea, Elena Sisto, and Oscar du Roy
Publication Date:
01-2024
Content Type:
Policy Brief
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
Policymakers in Estonia, France, Greece, and Spain share the common objective of enhancing the working conditions of platform workers. However, variations in their labour markets, legal frameworks, and political landscapes have led to four distinct approaches in achieving this goal. Predominantly, the Spanish regulation has been geared towards attempting to reclassify platform workers from self-employed to employees. In contrast, the regulatory strategies in France and Greece have focused on retaining the sector within the realm of independent work, while simultaneously improving the working conditions of platform workers. Estonia adopted a broader perspective, emphasising the enhancement of working conditions for all freelancers, not exclusively those categorised as platform workers. This Policy Brief offers a comprehensive evaluation and comparison of the regulatory frameworks governing platform work in four European countries. The comparative analysis draws upon research conducted by the OECD and the World Economic Forum (WEF) on the principles of good regulation. Adapting this research to the context of digital platforms, three key principles for assessing the regulation of working conditions on these platforms were identified: (i) the consistency with the policy objective of improving the working conditions of platform workers; (ii) the feasibility of implementing the regulatory requirements; (iii) the presence of regulatory dialogue and appeal mechanisms. The evaluation of the four countries’ regulations against the three outlined principles offers valuable insights into the regulation of platform work. In Spain, the primary aim of the regulation regarding platform workers was not solely the improvement of working conditions but predominantly the reclassification of platform workers from self-employed to employees. This distinction is crucial, as platform workers highly value the benefits of self-employment, such as access to work, income opportunities, flexibility, and autonomy. Evidence presented in this study suggests that a majority of Spanish delivery workers preferred to maintain their self-employed status, while only about one-third expressed a desire to be classified as employees. Moreover, the Spanish regulation is characterised by a broad formulation of the conditions defining employment for digital delivery workers. This lack of specificity has led to an uncertain application of the regulation, with digital platforms adopting diverse strategies to achieve compliance. Ultimately, the Spanish regulatory framework has been marred by a profound disregard for the interests of, and a notable lack of communication with, those directly impacted by the regulation: the digital platforms and the platform workers. Greece has demonstrated that it is possible to enhance working conditions for platform workers while preserving the advantages of self-employment. The Greek regulation mandates that digital platforms adhere to the same welfare, health, and safety obligations for platform workers as they would for employees. Additionally, Greece has established clear criteria to define the presumption of self-employment for platform workers. This clarity offers legal certainty and enabled platform workers to accurately assess their employment status. Consequently, there has been a notable reduction in court cases regarding the classification of platform workers. France has progressively developed a comprehensive legal framework that has systematically enhanced the rights of platform workers. This development culminated in six pivotal agreements, addressing some of the most challenging aspects of working conditions on digital platforms, such as account deactivation and minimum revenue. These agreements were reached under the auspices of the Autorité des Relations Sociales des Plateformes d’Emploi (ARPE), a public entity instrumental in facilitating effective social dialogue between digital platforms and trade unions. The establishment of clear administrative procedures governing the negotiations within ARPE has been crucial in formulating measures that digital platforms can effectively implement. Estonia’s primary focus is on ensuring adequate working conditions for all freelancers, including platform workers. A considerable number of platform workers in Estonia engage in a contract-for-services (töövõtuleping) with digital platforms. This contract offers a social safety net, including unemployment benefits, sick pay, and healthcare services, while retaining the self-employed status of platform workers. Moreover, this framework provides clarity regarding the rights and responsibilities of both platform workers and digital platforms, facilitating the implementation of a clear and unambiguous regulatory system.
Topic:
Labor Issues, European Union, Regulation, Digital Economy, and Labor Market
Political Geography:
Europe

4. Calling on the EU-US Trade and Technology Council: How to Deliver for the Planet and the Economy

Author:
Oscar Guinea, Vanika Sharma, Philipp Lamprecht, Dyuti Pandya, and Oscar du Roy
Publication Date:
02-2024
Content Type:
Policy Brief
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
This Policy Brief proposes the establishment of an agreement on conformity assessment between the EU and the US that covers machinery and electrical equipment. The initiative aims to increase the number of European and US conformity assessment bodies authorized to test and certify EU and US machinery and electrical equipment for exports into each other’s markets, without recognizing the equivalency or otherwise altering the product requirements in regulation, standards, or other normative documents on either side. While this study focuses on the economic effects of an agreement on conformity assessment that includes machinery and electrical equipment, the scope of such an agreement could potentially be extended to several additional product categories, particularly those that are subject to requirements for mandatory third-party conformity assessment in both the EU and the US. The increase in the number of conformity assessment bodies is expected to reduce the costs and the time required to demonstrate conformity. If this policy succeeds as expected in achieving a reduction in trade costs between 2 and 6 percent, US exports to the EU are projected to increase between US$ 11 billion and US$ 32.5 billion while EU exports to the US are estimated to grow by between US$ 13.8 billion and US$ 42.2 billion. In percentage terms, US firms are anticipated to experience a larger increase in exports of machinery and electrical equipment than their EU counterparts. The increase in trade flows as a result of this agreement is estimated to be larger than the rise in trade flows achieved in other Free Trade Agreements signed by the EU or the US. Moreover, as an increasing number of EU regulations begin to mandate third-party conformity assessment, US firms will increasingly benefit from this agreement when exporting to the EU. Given China’s status as the largest supplier of machinery and electrical equipment to both the EU and the US, the implementation of an EU-US agreement on conformity assessment would not only improve conditions for transatlantic trade but also lead to reduced trade dependence for the EU and the US on China. The reduction in trade costs between the EU and the US on machinery and electrical equipment due to the agreement could lower Chinese exports to the EU and the US by between US$ 6.5 billion and US$ 19.4 billion. Importantly, machinery and electrical equipment are crucial inputs for some of the key technologies in which the EU and the US Administrations have identified trade dependencies on China. However, in contrast with other policies aimed at reducing reliance on Chinese imports, an agreement on conformity assessment for machinery and electrical equipment will not require public subsidies or impose any financial burden on taxpayers. This agreement also has the potential to benefit the environment. Machinery and electrical equipment are essential inputs for green technologies. Therefore, a reduction in the cost and time of conformity assessment in these industries will accelerate the adoption of green technologies. An agreement on conformity assessment between the EU and the US covering green goods and clean technologies could increase transatlantic exports between US$ 3.1 billion and US$ 9.2 billion. While this increase in exports is significant, broadening the scope of the agreement to include the entirety of machinery and electrical equipment, rather than just a subset, is projected to lead to trade effects eight times larger. Moreover, as green technologies rapidly evolve, an agreement on conformity assessment has the potential to serve as a dynamic instrument that evolves to accommodate future regulatory and economic developments on climate and the environment on both sides of the Atlantic.
Topic:
Science and Technology, European Union, Economy, and Trade
Political Geography:
Europe, North America, and United States of America

5. Openness as Strength: The Win-Win in EU-US Digital Services Trade

Author:
Matthias Bauer, Dyuti Pandya, and Oscar du Roy
Publication Date:
03-2024
Content Type:
Policy Brief
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
The discourse surrounding the EU’s supposed over-reliance on digital services imports from non-EU countries, particularly the US, has been a recurrent topic among some political circles. However, this viewpoint tends to oversimplify and misrepresent the nuanced and complex reality of the EU’s status within the global Information and Communication Technology (ICT) sector and digitally enabled trade. A thorough analysis of trade data and trends clearly illustrates that the EU’s engagement with foreign (non-EU) digital services, notably from the US, represents a strategic economic advantage, bolstering Europe’s competitiveness and fostering productivity growth. Below we underline the critical importance of openness to foreign innovation and technology diffusion for the EU’s economic future.
Topic:
European Union, Digital Economy, Strategic Competition, Imports, and Productivity
Political Geography:
Europe, North America, and United States of America

6. Trading Up: An EU Trade Policy for Better Market Access and Resilient Sourcing

Author:
Fredrik Erixon, Oscar Guinea, Philipp Lamprecht, Oscar du Roy, Elena Sisto, and Renata Zilli
Publication Date:
05-2024
Content Type:
Policy Brief
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
Europe’s competitiveness could be substantially improved by a trade policy that facilitates more trade and other forms of cross-border exchange. The evidence is clear: the EU trades less with the rest of the world than would be expected given the size of its economy. With 85 percent of global growth happening outside of the EU – and with an increasing share of all new technologies, innovations, patents, human capital, and R&D expenditure emerging in other parts of the world than Europe – the EU needs to find better ways to integrate with international markets. It is now becoming urgent for the EU to revive its international trade policy. Europe’s increasing detachment from global markets lead to two major economic concerns: deteriorating market access and less capability to build economic resilience. Market access can be defined as an export challenge, as EU firms face increasing trade barriers that hinder their ability to sell products and services abroad. These barriers ultimately limit the EU’s ability to scale up production, specialise, and increase R&D spending. Economic resilience is an import challenge. To become more resilient, the EU must diversify its sources of supply, particularly for critical raw materials, and secure a stable and frictionless access to foreign high-end goods, services, and technologies. The next five years present a critical opportunity for the EU to address the challenges limiting the contribution of international trade to EU’s competitiveness. This Policy Brief outlines seven trade policy recommendations that tackle the lack of market access and address the need for economic resilience. These policy recommendations are there for the EU to take: they are realistic and achievable. The EU has the power to make these seven policy recommendations a reality.
Topic:
Markets, Treaties and Agreements, European Union, Trade, and Resilience
Political Geography:
Europe

7. Keeping Up with the US: Why Europe’s Productivity Is Falling Behind

Author:
Fredrik Erixon, Oscar Guinea, and Oscar du Roy
Publication Date:
05-2024
Content Type:
Policy Brief
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
The European Union stands at a crossroads. For decades, the EU’s productivity growth has consistently lagged the United States, leading to slower growth in living standards and decline in global economic power. While short-term factors like the strong US fiscal expansion have widened the gap in nominal GDP growth in recent years, the fact is that Europe has trailed the US economic development for several decades and the root of the problem lies in deeper structural issues within the European economy. Four major forces fuel this productivity divide. Firstly, the EU’s investment in research and development (R&D) pales in comparison to the U.S., leading to fewer patents and a slower pace of technology-fuelled innovation. Secondly, Europe trails America in the stock and growth of intangible capital investments, which are crucial for adopting and diffusing new technologies that drive productivity. Thirdly, the EU market exhibits slower business creation and destruction compared to the US. This rigidity hinders the flow of resources towards the most productive firms. Lastly, despite boasting higher levels of trade openness, the EU attracts less Foreign Direct Investment (FDI) than the US, curbing its access to cutting-edge global technologies and expertise. To close the gap, European policymakers should implement a comprehensive strategy for faster productivity growth. The first step is turning up the dial on R&D spending, targeting 4-5 percent of GDP by 2040. Next, Europe should prioritise investments in intangible assets and lay down the digital infrastructure that will underpin future growth. Revitalising the single market is also crucial: reducing internal and external market barriers for services, the primary vehicle for trading intangible assets. Moreover, the EU should foster a market environment that encourages entrepreneurship and facilitate the entry and exit of firms so resources cascade towards the most productive sectors. By harnessing the strengths of the single market and implementing these recommendations, European policymakers can propel the EU towards a more competitive and prosperous future.
Topic:
Markets, European Union, Productivity, and Economic Competition
Political Geography:
Europe, North America, and United States of America

8. Future-proofing the EU’s Investment Attractiveness: A Bold Reform Agenda for Competition Enforcement, Taxation and Digital Policy

Author:
Matthias Bauer, Dyuti Pandya, and Oscar du Roy
Publication Date:
07-2024
Content Type:
Working Paper
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
Reducing the deterrent effects from EU and Member State laws in three key cross-sector policy areas – competition policy, business taxes and VAT, and digital policies – could significantly enhance the business environment within the Single Market and boost the EU’s attractiveness to both domestic and foreign investors. The EU’s future competitiveness is at risk due to a significant disparity in investments, particularly in technological innovation, compared to the US. Despite having a larger population and labour force, the EU lags behind in large business activities, with US firms consistently outspending their European counterparts in key tech-intensive sectors such as software, computer services, pharmaceuticals, and biotechnology. Moreover, China and other emerging nations are rapidly catching up, dramatically diminishing the EU’s relative economic and political influence on the global stage. The urgency for the EU to bridge these gaps is more critical than ever (Section 2). The EU’s profound investment gap highlights a systemic advantage for the US in fostering innovation and economic growth. The EU’s regulatory complexity, largely driven by legal fragmentation in horizontal policies, further exacerbate the situation, deterring cross-border activities reducing the region’s attractiveness to global investors (Section 3).
Topic:
Markets, Reform, European Union, Digital Economy, Investment, and Digital Policy
Political Geography:
Europe

9. Enhancing Technology Diffusion in the EU amid Tough Structural Challenges

Author:
Matthias Bauer, Elena Sisto, and Oscar du Roy
Publication Date:
09-2024
Content Type:
Working Paper
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
To remain globally competitive, the EU must empower firms to adopt the best technology solutions available on global markets. Building on a strong tradition of innovation, the EU relies on corporations across industries to drive the diffusion of technology through the commercialisation of technological innovations. Technology diffusion is crucial for embedding new technologies into society and is essential for sustaining industrial competitiveness. EU and Member State governments must prioritise enhancing the EU’s “diffusion capacity” – the ability to effectively spread and adopt innovations across Member States.
Topic:
Science and Technology, European Union, Digital Economy, and Services
Political Geography:
Europe

10. If the EU was a State in the United States: Comparing Economic Growth between EU and US States

Author:
Fredrik Erixon, Oscar Guinea, and Oscar du Roy
Publication Date:
07-2023
Content Type:
Policy Brief
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
This Policy Brief is a warning call about Europe’s poor economic growth and its consequences for prosperity. The long-term trend of Gross Domestic Product per capita is crucially important but not always easy to grasp. While it’s common to compare levels of growth between countries in a single year, the reality is that it is the long-term trend that matters. An economy that grows at 3 percent per year will double in 24 years but an economy that grows at 1 percent per year will double only in 48 years. For a long time now, the average growth rate in mature and developed European economies has been closer to 1 than 3 percent. The EU has had positive economic growth but it has been slow in comparison with other developed economies. If European countries were states in the United States, many of them would belong to the group of poorest countries. In this Policy Brief, we rank GDP per capita in EU countries and US states, and the result is dispiriting. The ranking of GDP per capita in 14 EU member states, which together represented 89 percent of EU GDP, was lower in 2021 than in 2000. For instance, France and Germany were as rich as the 36th and the 31st US states in 2000, but twenty-one years later, French GDP per capita was lower than the 48th poorest US state, Arkansas, while German GDP per capita had fallen to become as prosperous as the 38th US state, Oklahoma. GDP per capita in Central and Eastern European countries have grown considerably but their relatively small size and lower starting point stop them from reverting the trend of relative European economic decline. The result of this economic divergence between EU member states and US states is a growing wedge of GDP per capita between the EU and the US, which in 2021 was as large as 82 percent. If the trend continues, the prosperity gap between the average European and American in 2035 will be as big as between the average European and Indian today. This Policy Brief tells a story about the EU’s unfulfilled economic potential but also offers a ray of hope. If the US states have managed to sustain robust rates of economic growth, the EU member states can do it too. However, to do so the EU must bring back economic growth and competitiveness to the centre of its economic policy. If Europe is to face the challenges presented by climate change and the digital transition, the growing burden of an aging society and defence budgets, higher economic growth is not an option but a necessity.
Topic:
European Union, GDP, and Economic Growth
Political Geography:
Europe, North America, and United States of America