Production and international trade in high-tech products

Data extracted in February 2018.

Planned update: April 2019.

Highlights

In 2017, high-tech products represented 19 % of total extra-EU imports and 18 % of total extra-EU exports.

In 2017, China was the main partner for high-tech imports to the EU ahead of the United States and Switzerland.

The United States was the main partners for EU exports of high-tech products followed by China and Switzerland in 2017.

Total sold production of high-tech products, EU-28, 2007-16

This article focuses on trade and production of products identified as being of high-technology. The high-tech products are divided into nine groups according to the Standard International Trade Classification (SITC — Rev. 4): Aerospace, computers & office machines, electronics-telecommunications, pharmacy, scientific instruments, electrical machinery, chemistry, non-electrical machinery and armament.

This article is part of an online publication providing recent statistics on international trade in goods, covering information on the EU's main partners, main products traded, specific characteristics of trade as well as background information.


Full article

Manufacturing of high-tech products

In 2015 the European Union (EU) had almost 47 000 enterprises in the high-tech manufacturing sector (Table 1), which represents 0.2 % of the total number of enterprises [1] in the EU. High-tech manufacturers were most numerous in Germany (7 894), the United Kingdom (7 423), Italy (5 553), the Czech Republic (3 393), France (3 382) and Poland (3 238), together accounting for almost two-thirds of the number of high-tech enterprises in the EU-28. Luxembourg and Malta recorded the lowest numbers of high-tech enterprises (11, and 34 respectively).

Table 1: High-tech manufacturing statistics, by country, 2015
Source: Eurostat (sbs_na_sca_r2)

Turnover in high-tech manufacturing accounted for 659 billion euro in the EU in 2015, corresponding to 2.3% of total turnover of enterprises in the EU. Germany led the way with EUR 161 billion, ahead of France (EUR 109 billion) and the United Kingdom (EUR 80 billion). Production value in high-tech manufacturing accounted for 612 billion euro in the EU in 2015, corresponding to 3.1% of total turnover of enterprises in the EU. Here Germany also ranked top in value (EUR 148 billion), again followed by France (EUR 102 billion) and the United Kingdom (EUR 77 billion)

The value added of high-tech manufacturing in the EU amounted to 198 billion euro in 2015, a share of 2.7% of total value added of enterprises in the EU. Among the Member States, the highest contribution was recorded in Germany (EUR 54 billion), followed by France (EUR 32 billion) and the United Kingdom (EUR 28 billion).

Sold production of high-tech products

In 2016, high-tech sold production in the EU-28 reached a new peak. Within the 10 year period (from 2007 to 2016) the value of high-tech sold production increased by 11 % from EUR 304 billion in 2007 to EUR 337 billion in 2016 reaching a bottom of EUR 258 billion in 2009 (Figure 1) as result of the global financial and economic crisis.

Figure 1: Total sold production of high-tech products, EU-28, 2007-16 (EUR billion)
Source: Eurostat (Prodcom database DS-045339)

Figure 2 shows the evolution of the sold production of high-tech goods from 2007 to 2016 by type of product. There were large increases in this period for scientific instruments (+ 41 %), pharmacy (+ 68 %) and aerospace (+ 74 %). The more modest increases in the shares of electrical machinery (+ 3 %), chemistry (+ 15 %) and non-electrical machinery (+ 18 %) also added to the overall growth of high-tech production. In armaments there was a 42 % increase but from a small initial value. Finally in computer-office machines (- 58 %) and electronics-telecommunications (- 22 %) production decreased.

Figure 2: Total sold production of high-tech products by sector, EU-28, 2007-2016 (billion EUR)
Source: Eurostat (Prodcom database DS-045339)


The result of these developments is that in 2016 the shares of the four product groups with the most sold production were close to each other. These were electronics-telecommunications (23 %), scientific instruments and pharmacy (both 20 %) and aerospace (17 %). The share of the other groups were between 1 % and 7 % (Figure 3).

Figure 3: Sold production of high-tech products by sector, EU-28, 2016 (% share of each sector)
Source: Eurostat (Prodcom database DS-045339)

EU imports of trade in high-tech products

In 2017, EUR 357 billion of high-tech products was imported by the EU which represented 19 % of total extra-EU imports. Figure 4 shows the evolution from 2007 until 2017 of imports of high-tech products of the EU-28 from its 6 main partners. EU imports from these 6 countries represented around 79 % of total imports of high-tech products in 2016. This ratio has grown 11 percentage points over the period mainly due to growth in imports from China (+8 p.p.) , Vietnam (+5 p.p.) and the United States (+2 p.p.) while the shares of Japan (-4 p.p.) and other countries (-11 p.p.) decreased.Looking at the evolution of total imports of high-tech products into the EU-28’s from 2007 to 2017, 2009 saw the lowest value, due to the impact of the global financial and economic crisis. However in 2010 imports already exceeded pre-crisis level. Between 2010 and 2014 there was little change but from 2014 to 2015 there was a 18 % increase. From 2015 to 2016 there was only a 2 % increase but in 2017 growth amounted to 7 %.

Figure 4: Imports of high-tech products, top 6 partners, EU-28, 2007-17 (EUR billion)
Source: Eurostat (Comext database DS-018995)

In 2017, China was the main partner for high-tech imports to the EU-28 (EUR 121 billion), ahead of the United States (EUR 96 billion), Switzerland (EUR 23 billion) and Vietnam (EUR 17 billion) (Figure 5). Compared with 2013 four countries entered the top 20: Vietnam (4th), Malaysia (5th), Thailand (9th) and Israel (14th), while Algeria, Australia, South Africa and Taiwan dropped out.

Figure 5: Imports of high-tech products, top 20 partners, EU-28, 2017 (EUR million)
Source: Eurostat (Comext database DS-018995)

In 2017, 37 % of high-tech products imported into the EU were in the product group 'electronics-telecommunications'. This share has been fairly stable throughout the whole period from 2007 to 2017 (see Figure 6). The product group whose share increased the most was 'pharmacy' which went from 7 % in 2007 to 11 % in 2017. The largest decrease was in 'computers-office machines' going from 25 % in 2007 to 18 % in 2017.

Figure 6: Imports of high-tech products by product group, EU-28, 2007-17 (EUR billion)
Source: Eurostat (Comext database DS-018995)

Figure 7 shows the import by product group for the six largest extra-EU import partners in 2017. Either China or the United States was the largest provider in all nine of them and also occupied five of the second spots. China was the leading provider in electronics-telecommunications (EUR 64 billion), computers-office machines (EUR 45 billion) and electrical machinery (EUR 4 billion). The United States was the leading provider in the aerospace (EUR 46 billion), pharmacy (EUR 18 billion), scientific instruments (EUR 12 billion), non- electrical machinery (EUR 4 billion), chemistry (EUR 1 billion) and armament (EUR 0.2 billion). Second places other than those for the United States or China where held by Switzerland (pharmacy and non-electrical machinery), Vietnam (electronics-telecommunications) and Japan (aerospace).

Figure 7:Imports of high-tech products by product group, top 6 trading partners, EU-28, 2017 (EUR billion)
Source: Eurostat (Comext database DS-018995)

In all categories, except chemistry, imports of high-tech products increased between 2007 and 2017. The highest increases were found in electronics-telecommunication (EUR 47 billion), aerospace (EUR 26 billion) and pharmacy (EUR 24 billion). In electronics-telecommunications China (EUR 36 billion) and Vietnam (EUR 14 billion) had the largest increases while South Korea and Japan lost EUR 4 and 5 billion respectively. In aerospace almost all of the increase came from the United States. In pharmacy the United States (EUR 11 billion) also had the largest increase together Switzerland (EUR 8 billion).

Table 2: Variations in imports of high-tech products by product group for top 20 partners, EU-28, 2007-2017 (EUR million)
Source: Eurostat (Comext database DS-018995)

EU exports of trade in high-tech products

In 2017, EUR 334 billion worth of high-tech products were exported by the EU, which represented 18   %of all extra-EU exports.

From 2007 to 2017 high-tech product exports grew from EUR 199 billion to EUR 334 billion (see Figure 8). Compared to imports this growth was larger both in absolute terms (EUR 1353 billion vs. EUR 117 billion) and as a growth rate (68 % vs 48 %). The trend in EU exports of high-tech followed roughly the same pattern as total exports, showing the same decline during the global financial and economic crisis, followed by an increase.

Figure 8: Exports of high-tech products, top 6 partners, EU-28, 2007-17 (EUR billion)
Source: Eurostat (Comext database DS-018995)

Figure 9 shows the distribution of EU high-tech exports in 2017 by country of destination, revealing that the United States was the main partners for EU exports with 84 billion euro (25 % of extra-EU exports) followed at some distance by China (EUR 39 billion), Switzerland (EUR 21 billion) and the United Arab Emirates (EUR 13 billion) Russia and Japan (both EUR 12 billion) were the only other countries where EU-exports exceeded 10 billion euro. The four countries that had entered the list of top 20 partners (Malaysia, Israel, Thailand and Vietnam) occupied the 17th to 20th places as export destinations, with exports below 5 billion euro.

Figure 9: Exports of high-tech products, top 20 partners, EU-28, 2017 (EUR million)
Source: Eurostat (Comext database DS-018995)

In 2017 high-tech exports, aerospace is the product group with the highest extra-EU exports (EUR 90 billion) (Figure 10). Three other product groups have exports of more than EUR 50 billion, namely pharmacy (EUR 69 billion), electronics-telecommunications (EUR 67 billion) and scientific instruments (EUR 54 billion). The other five product groups' exports ranged from EUR 3 billion to 20 billion Euro.

Figure 11: Exports of high-tech products by product group, EU-28, 2007-16 (EUR billion)
Source: Eurostat (Comext database DS-018995)

Among the six largest trading partners, the United States was the main export partner in all product groups (see Figure 11). China was second largest in the six groups. Switzerland was second in pharmacy and computers office machines and in armament.

Figure 10: Exports of high-tech products by product group, top 6 partners, EU-28, 2007-17 (EUR billion)
Source: Eurostat (Comext database DS-018995)

Comparing 2017 to 2007 (Table 3), there was a EUR 135 billion increase in the value of extra-EU exports in the high-tech sector. Aerospace (EUR 51 billion) had the largest increase followed by pharmacy (EUR 45 billion). For eight of the nine product groups there was an increase in exports between 2007 and 2017. Only in computers & office machines (– EUR 2 billion) there was a decrease.

At country level, the highest increases in high-tech exports were registered in pharmacy and aerospace exports to the United States (EUR 15 billion and EUR 10 billion respectively). Other large increases in aerospace were observed for China (EUR 7 billion) and Turkey (EUR 6 billion) while in pharmacy exports to Switzerland increased by EUR 6 billion.

Table 3: Variations in exports of high-tech products by product group for top 20 partners, EU-28, 2007-2017 (EUR million)
Source: Eurostat (Comext database DS-018995)

EU trade balance in high-tech products

Overall, in 2017, the EU had a EUR 23 billion trade deficit in trade in high-tech products while the deficit with the top 20 trade partners was EUR 61 billion. By far, the largest deficit for high-tech products was with China (EUR 82 billion), see Figure 12a. Within the top-20 partners, the EU had a trade deficit in the high-tech sector with seven other countries: Vietnam, United States, Malaysia, Thailand, South Korea, Switzerland, and Japan, and a trade surplus with the remaining twelve: Mexico, Israel, Canada, Singapore, Norway, Brazil, Hong Kong, India, Saudi Arabia, Turkey, Russia and the United Arab Emirates.

Figure 12a: Balance of trade in high-tech products by top 20 partners, EU-28, 2017 (EUR million)
Source: Eurostat (Comext database DS-018995)
Figure 12b: Balance of trade in high-tech products by top 20 partners, details, EU-28, 2017 (EUR million)
Source: Eurostat (Comext database DS-018995

The trade deficit by product group (Table 4) reveals the deficit is mainly in electronics communications (EUR 65 billion) and computer office machines (EUR 46 billion) in both cases most the trade deficit is with China. The product groups with the largest trade surpluses were aerospace (EUR 31 billion), pharmacy (EUR 29 billion) and scientific instruments (EUR 22 billion).

Table 4: Trade balance of high-tech products for top 20 partners, EU-28, 2017 (EUR million)
Source: Eurostat (Comext database DS-018995)

Data sources

Multiple data sources High-tech statistics uses various other domains and sources mainly within Eurostat's official statistics:

  • International trade in goods statistics (COMEXT);
  • Statistics on the production of manufactured goods (PRODCOM);
  • Community innovation survey (CIS);
  • Human resources in science and technology (HRST);
  • Labour force survey (LFS);
  • Structural business statistics (SBS);
  • Research and development (R & D);
  • Structure of earnings survey (SES);
  • Patent database (PATSTAT).

The coverage and availability of high-tech statistics are then dependent on these other primary sources.

Trade in high-tech products

Trade in goods data comes from Eurostat’s COMEXT database. COMEXT is the Eurostat reference database for international trade in goods. It provides access not only to both recent and historical data from the EU Member States but also to statistics of a significant number of non-EU countries. Because COMEXT is updated on a daily basis, data published on the website may differ from data stored in COMEXT in case of recent revisions.

The product approach is used for data on high-tech trade. 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). Due to the revision of SITC from SITC Rev. 3 to SITC Rev. 4, the definition of high-tech products also changed in 2011. The data in this article use the high-tech aggregation by SITC Rev. 4. This list, based on the OECD definition, contains technical products of which the manufacturing involved a high intensity of R & D.

Production of high-tech products

Industrial production data comes from PRODCOM. Prodcom provides statistics on the production of manufactured goods. The Prodcom data includes:

  • the physical volume of production sold during the survey period;
  • the value of production sold during the survey period;
  • for some products, the volume of total production during the survey period;

The Prodcom data is obtained by the National Statistical Institutes (NSIs) who conduct a survey of enterprises. Eurostat calculates EU totals at EU-28 level from the national data.

Data limitations

List of the PRODCOM products without correspondence in COMEXT:

2844 10 10 2844 30 51 8523 49 25 8523 51 99
2844 10 30 2844 30 55 8523 49 31 8710 00 00
2844 10 50 2844 30 61 8523 49 39 9301 10 00
2844 10 90 2844 30 69 8523 49 45 9301 20 00
2844 20 25 2844 30 91 8523 49 51 9301 90 00
2844 20 35 2844 30 99 8523 49 59 9305 91 00
2844 20 51 2844 40 10 8523 49 91 9306 30 30
2844 20 59 2844 40 20 8523 49 93 9306 90 10
2844 20 99 2844 40 30 8523 49 99
2844 30 11 2844 40 80 8523 51 91
2844 30 19 2844 50 00 8523 51 93

Labels for these codes can be found HERE.

Context

In the context of economic globalisation, technology is a key factor in enhancing growth and competitiveness in business. High-tech industries are expanding most strongly in international trade and their dynamism helps to improve performance in other sectors. Investment in research, development, innovation and skills constitutes a key policy area for the EU as it is essential to economic growth and to the development of a knowledge-based economy.

Certain WTO Members including the EU have joined the Information Technology Agreement (ITA) which provides duty free access to high-tech products, including computers, telephones and inputs and components such as semiconductors. The new, expanded ITA agreement concluded recently will reduce the costs for consumers and for manufacturing IT products in Europe. It will offer new market access for many of Europe's high tech companies – some of which are leaders in their fields – and encourage innovation by simplifying access to state-of-the-art technology. As such, it will contribute to the further development of the digital economy in the EU.

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Traditional international trade database access (ComExt)
EU trade since 1988 by SITC (DS-018995)
Detailed data by PRODCOM list (NACE Rev. 2) (prom2)
Sold production, exports and imports by PRODCOM list (NACE Rev.2) — annual data (DS_066341)
High-tech industry and knowledge-intensive services (htec)
High-tech industry and knowledge-intensive services: economic statistics at national level (htec_eco)
Venture capital investments (htec_vci)
Economic statistics on high-tech industries and Knowledge Intensive Services at the national level (from 2008 onwards, NACE Rev. 2) (htec_eco_sbs2)


Notes

  1. Total business economy; repair of computers, personal and household goods; except financial and insurance activities, 2015 data