EU Tech Sector Growth Shows Similar Trends to US

Just as our earlier U.S. research pointed to the pervasive and substantial growth of the high-value, high-tech workforce across the country, new research on high-tech employment and wages in the European Union highlights many of the same trends. Overall, the research establishes the high-tech sector as an important source of employment, income, and economic growth during what has otherwise been a difficult economic period for much of the EU.

In the first report of its kind to focus on the EU high-tech sector, we reframed the way Europe should be thinking about high-tech workers, expanding the definition to include STEM workers in non-high tech industries alongside workers within high-tech firms. Here’s what we found:

High-Tech Workers Are Better-Off in the Labor Market

With low unemployment rates and significant wage premiums, it’s clear that Europe’s high-tech workers face substantially more favorable labor market outcomes than their non high-tech peers.

High-Tech Employment is Booming Across Europe

Between 2000 and 2011, high-tech employment grew 20 percent where total employment increased only by 8 percent. The result was that by 2011, Europe’s 22 million high-tech workers represented 10 percent of total employment.

EU-27 High-Tech Employment Share of Total

8-20 percent
8-20 percent

Mirroring a similar trend in the United States

The study also finds that high-tech employment is spread throughout the continent, reaching far beyond regions that are well-known tech hubs -- in fact increasing most in the areas with with previously lower concentrations of high-tech activity. So, geographically and economically diverse regions are benefiting from high-tech job creation--but that’s not all. There is also a sizable secondary local jobs multiplier, where the creation of one high-tech job in a region results in more than four additional non-high tech jobs in the same region.

High-Tech Local Jobs Multiplier


Delving into the idea that growth in high-tech employment is happening across Europe, here are some findings that might be surprising to some:

  • The Czech Republic had the highest concentration of high-tech workers in 2011 (13.7 percent of total employment).
  • Finland, Sweden, Denmark, France, and eight additional countries had high-tech employment shares above 10 percent of total employment in 2011 -- in other words, above the EU average.
  • Spain has doing well--at least through 2011. Spain’s rapid high-tech growth, combined with its large population, amounted to an increase of 441,000 high-tech workers between 2000 and 2011—fourth in the EU-27 behind France, Germany, and Italy.

Employment Change by Country and Sector

employment change
employment change

This report certainly makes the case for the impact of the high-tech economy in Europe. Still, we need a deeper understanding of the contributions of this sector by looking at other measures of economic vitality, such as entrepreneurship, economic output, research and development, and productivity. Then, as in the United States, we are still left with the only question that counts: why do high-tech companies start where they do, and how can we create a better environment in each of our backyards? Our report doesn’t answer those questions, but it does establish a comprehensive set of facts from which policy makers and other stakeholders can draw upon as various proposals for increasing growth and competitiveness in the European Union are considered.