Based on a sufficient statistics approach, we show how the state of technology of European industries relative to the rest of the world can be empirically assessed in a way that is simple in terms of computation, parsimonious in terms of data requirements, but still comprehensive in terms of information. The lack of systematic cross-industry correlation between export specialization and technological advantage suggests that standard measures of revealed comparative advantage only imperfectly capture a country’s technological prowess due to the concurrent influences of factor prices, market size, markups, firm selection and market share reallocation. These findings offer policy insights relevant to the EU’s external competitiveness debate, echoing several recommendations from the Draghi report. Achieving export specialization in key sectors requires more than just technological superiority.

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1 October 2025

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International Economics 1832025

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DOI: 10.1016/j.inteco.2025.100601

https://www.sciencedirect.com/science/article/pii/S2110701725000241

This Journal article is published under the centre's Trade programme.