US and China: IT Superpowers: Study: Europe's Digital Dependence is Growing

Europa has grown increasingly dependent on digital technologies from the US and China compared to its previous levels. A comprehensive comparative study from the Center for Advanced Security, Strategic and Integration Studies (CASSIS) at the University of Bonn, in collaboration with the Vodafone Institute for Society and Communication, reveals that Europe is now more dependent on foreign digital technologies than it was over a decade ago.

The research employs the "Digital Dependence Index" (DDI), which assesses dependence across four key areas – hardware trade, IT services, software platforms, and technology patents – on a scale from 0 (full independence) to 1 (full dependence) over a 14-year period from 2010 to 2023. The average digital dependence of European states rose slightly by 0.5 percentage points to 0.69 during this period.

Conversely, China reduced its digital dependence by 10.8 percentage points to 0.43, while the US improved by 6.0 percentage points to claim the top spot as the most autonomous digital nation with a value of 0.38. Germany occupies a middle position, ranking 25th globally with a DDI value of 0.73. The study shows that Germany's digital vulnerability has worsened by 2.4 percentage points between 2010 and 2023, primarily due to increasing dependence on software and IT services.

While Germany ranks highest among European states in information and communication technology patents, it still lags significantly behind the US (26 percentage points), China (20 percentage points), and South Korea (12 percentage points). Moreover, Germany is entirely dependent on foreign providers for platforms such as operating systems, search engines, and cloud services, placing it among the cluster of postindustrial states with major industrial and research strengths but substantial gaps in platform ecosystems.

Germany, along with partners like France, Italy, and the UK, is part of this cluster. The European average reveals a significant bifurcation, with services at 0.42, hardware at 0.59, platforms at 0.98, and patents at 0.99, indicating near-total reliance on third-party states. The researchers caution against a statistical distortion caused by the "Irish Effect", where Ireland's seemingly independent value of 0.40 is mainly due to many US giants having their headquarters there for tax reasons.

Excluding Ireland, the European trade balance in digital services for the years 2022-2024 shifts from a surplus to a deficit of approximately $350 billion.