Government advisor warns that Europe is far behind the US when it comes to technology

The Netherlands Bureau for Economic Policy Analysis (CPB) has warned that Europe is increasingly lagging behind the United States when it comes to technology. According to the Cabinet's key advisor, the Netherlands has had a close connection with the American economy for years. "But in the last ten years, we have become much more dependent on the Americans than the other way around," said CPB researcher Debby Lanser after new research.

The attention has recently been focused on the American presidential elections and the possible consequences of import duties announced by presidential candidate Donald Trump. But the impact of this is "still manageable", according to Lanser.

Even if trade with the US were to come to a complete standstill, it would not cost more than 1 percent of the Netherlands’ gross domestic product (GDP), the CPB has calculated. This is because trade with other countries would then actually increase.

Lanser pointed out "vulnerabilities" that go far beyond trade policy and are also independent of who will be in the White House. For example, Europe does not have a single world-class tech company, while the US has companies like Microsoft, Apple, Meta, Google, and Amazon. "The global cloud market is dominated by the Americans, while 70 percent of AI models were developed by the US."

According to Lanser, the close ties with the US offer Dutch companies many opportunities. But there is also a downside, she warned. Policy changes in the US can limit access to crucial technologies, which can have major consequences. "What if the US denies us access to the cloud? Then our entire system will be down."

Europe has already "missed the boat" in the field of cloud computing, Lanser estimates. In order to prevent the balance from tipping further, she recommends increasing government spending on research and development. That would help European technology to develop further.

"The US spent 3.5 percent of their GDP on R&D in 2021. Dutch R&D spending as a percentage of GDP has varied between 1.6 and 2.3 percent for decades," she calculated. "The European Union has a 3 percent standard, but it is not being met."

Europe is also lagging far behind in the area of ​​defense technology. "66 percent of our weapons come from the US. What if the Americans say we can no longer use those weapons?" Here too, there is a large financial gap between the two parties. According to the CPB, the US spent almost three times as much on defense in 2023 as the European Union.