Amid geopolitical shocks, the EU is revisiting its industrial strategy. However, traditional metrics often paint a misleading picture of Europe's underlying strength. This column uses a new approach to measure the EU's relative state of technology in different sectors. It shows that although EU manufacturing broadly outperforms the rest of the world in productivity terms, the industries in which it specialises are not always those in which it is relatively more productive. It argues that industrial policy must be rooted in productivity diagnostics and support should target sectors with strong relative state of technology but weak trade performance.

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25 June 2025

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Vox EU

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https://cepr.org/voxeu/columns/export-strength-does-not-equal-tech-strength-rethinking-eu-comparative-advantage

This Blog is published under the centre's Trade programme.

This publication comes under the following theme: Trade Policy and barriers to international economic integration