Perspectives for the European ICT Industry (Les Perspectives Du Secteur Des Tic En Europe)

13 Pages Posted: 21 Nov 2008

Date Written: April 14, 2006


We present the main trends of evolution of the ICT sector. Its dynamics, supported by a constant technical progress in Ics, compounded with "non convexities" such as network effects and high sunk costs, may either lead to a Schumpeter Mark I or Schumpeter Mark II competition regime. This means that in some segments, the market will be more competitive (Mark I), while in other it will be more monopolistic (Mark II). But a key trend is also the so called "convergence". Digitization makes it cost effective to integrate different communications, information processing and entertainment systems and devices. Hence, Schumpeter Mark II grows at the core where software production dominates, while Schumpeter Mark I is established at the periphery.

In this context, the European ICT industry is potentially smashed between two forces : the cost advantages of Asian countries and the inventiveness and dynamism of the US industry. The way out of this very difficult situation is to create the conditions of restoring knowledge accumulation in a key sub-sector of ICT, software production. To do this, Europe can rely on its tradition of cooperation and knowledge sharing and on a set of institutions that have shown their ability to stimulate inter-regional cooperation. By concentrating on an ambitious project of open source software production in embarked systems and domestic networks, Europe could reach several objectives : to make freely accessible an essential facility, to stimulate competition, to help reaching the Lisbon objectives and to restore the European competitiveness in ICT.

Note: Downloadable document is in French.

Keywords: ICT, industrial policy, competition regimes, knowledge based society, open source.

Suggested Citation

Dang Nguyen, Godefroy and Genthon, Christian, Perspectives for the European ICT Industry (Les Perspectives Du Secteur Des Tic En Europe) (April 14, 2006). M@rsouin Working Paper No. 4-2006. Available at SSRN: or

Christian Genthon

affiliation not provided to SSRN ( email )

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