The 2020 PREDICT Key Facts Report provides a detailed analysis of the state of Information and Communications Technology Research and Development (ICT R&D) activities in the 40 advanced and emerging countries – the EU28 plus Norway, Russia and Switzerland in Europe, Canada, the United States and Brazil in the Americas, China, India, Japan, South Korea and Taiwan in Asia, and Australia.
In this, the 13th edition of the report, we get an insight into the dynamics and direction of ICT R&D worldwide.
The ICT sector is one of the most dynamic sectors in the EU economy
This sector stands out for its high R&D intensity and for a productivity level that is higher than that of the whole economy. For example, in the period from 1995 to 2017, the EU28 ICT sector:
multiplied its value added in real terms by a factor of 3.8 in comparison to that of the total economy which increased by a factor 1.5
employment grew by a factor of 1.5 (1.2 in the whole economy)
labour productivity grew by 2.5 (1.3 in the whole economy),
mixed behaviour on R&D: while business expenditure on R&D (BERD) multiplied its real value by 3.5 (1.9 in the whole economy), BERD intensity (measured as BERD / GDP) decreased in the period 1995-2017, and public funding of R&D ICT grew by 4.8% annually in nominal terms between 2006 and 2018, whereas in the total economy, it only grew at an annual rate of 2.8% (in nominal terms).
During 2017, the EU ICT sector expanded more than the economy in general
The ICT sector grew more than the whole economy in value added, employment, productivity and public funding of R&D. But in BERD, R&D researchers, and R&D personnel, the ICT sector grew at a slower pace than the whole economy.
Main values of the EU ICT sector in 2017
Value added: € 630 billion, 6.5% yearly growth (against 2.6% in the whole economy), represents 4.1% of the EU28 total value added
Employment: 6.3 million people, 2.7% of total employment
BERD: € 32 billion, 15.2% of total BERD.
In the international context, the centre of gravity of ICT is moving towards the East
China and India are challenging the traditional view of those countries as the factories of the world. China is quickly moving to a new scenario betting hard on higher value added activities –such as those within the ICT producing sector- as well as increasingly investing in R&D. From 2006 to 2017, the value added of China’s ICT sector has grown above 12% annually on average, and R&D investments have risen by 18% annually. The EU28 is not improving its overall position in the international context.
The rise of China in the digital landscape, confirmed by other evidence related to China’s position in the landscape of artificial intelligence. The data for all R&D related variables indicate that China wants to play a prominent role in the world economy. Up to now the US is still the leading country in the world. But China (due to the size of its economy) is already threatening the leading position.
The COVID-19 pandemic
The COVID-19 pandemic, which has profoundly affected almost every country in the world, has unveiled the crucial role played by ICT and its R&D in a number of areas, such as:
controlling the spread of the virus (e.g. the successful use of ICT for contact tracing and sharing information on social distancing measures in South Korea)
the answer to the shortage of appropriate equipment (i.e. the use of 3D printers technology);
the great stimulus given to online education;
its role in reducing the cost of confinement, both in terms of human lives and lost production, thanks to the possibilities offered by teleworking.
The COVID-19 outbreak has meant, among many other things, a tremendous boost to the penetration of ICTs in all areas. However, for the next two years a strong negative impact on the production of the ICT sector is expected due to both the fall in demand as a result of confinement, as well as the sudden stop of production in many countries as a consequence of the disruption of the global supply chains. Since the time reference of this report covers up to 2019, it does not reflect the impact of the outbreak, but next year’s report will be useful to detect the macroeconomic impacts in the ICT sector worldwide.
The PREDICT Dataset 2020
The PREDICT Dataset 2020 covers the period from 1995 to 2017, the latest year for which official statistics are available at the level of detail needed for this analysis. Furthemore, nowcasted values for 2018 and 2019 are provided for the main indicators. The JRC study "Prospective Insights in ICT R&D" (PREDICT) focuses on analysing the supply of Information and Communications Technologies (ICT) and Research and Development (R&D) in ICT in Europe, with comparison to major competitors worldwide. ICTs are indeed the technologies underpinning the digital economy.