AUTONOMY (OR DEPENDENCE) OF THE EU ECONOMY ON CRITICAL SERVICES IN THE CONTEXT OF THE NEW EU INDUSTRIAL POLICY AND ECONOMIC SECURITY

Abstract

The paper addresses the following scientific problem: the autonomy (or dependence) of the EU industry on critical services in the context of reindustrialisation and economic security. Thus, this paper aims to capture the competitive position of critical services from both EU and non-EU origins within the European Single Market, in light of the New EU Industrial Policy and economic security. To this end we analysed 1) changes in rate of provision of critical services in the EU broken down by origin of providers; 2) a share of these services in total international service provision in the EU broken down by origin of providers; 3) competitive position of critical services and its changes in the EU market regarding the origin of the services providers; and finally, 4) competitive and trade positions of EU and non-EU critical services providers. Data on trade in services were obtained from the Eurostat International Trade in Services Database and are presented according to the Eurostat Balance of Payments Services Classification (EBOPS 2010). In order to identify the position of the EU and non-EU critical service providers to the European Union’s companies, we employ two specialisation measures commonly used in the trade literature - the Revealed Symmetric Comparative Advantage (RSCA) and the Trade Balance Index (TBI). The combination of the two indicators was visualised using the matrix proposed by Widodo adjusted to the aim of this research. In the first part of the paper, a literature review is presented, followed by a statistical analysis of trade and competitive positions of EU and non-EU critical services providers. The discussion, which is rather limited due to the small number of publications dealing with the problem raised, is presented. Finally, the paper ends with conclusions, policy recommendations and directions of further research. Our research allowed to state that the competitive position of critical services of EU providers is higher within the European Single Market in comparison to non-EU providers. This leads au to a conclusion that the EU maintains some level of autonomy in critical services and strengthened it over the last fifteen years (2010-2024).

Keywords: EU Industrial Policy, servitization, critical services, reindustrialisation, ICT, financial and transport services, economic security.