On the other hand, however, the global competitors, above all the USA and China, have been able to set themselves apart from the EU in a number of relevant competitive factors. The EU's share of global gross domestic product has fallen in recent years because other countries have grown faster. Even with its smaller population, the USA accounts for a larger share of global economic output than the EU. Since 1999, the People's Republic of China has been in a steady process of catching up in per capita economic output. It started at around eight percent of the US level and was around 27 percent in 2020.
These observations are complemented by a comparative analysis of consumer spending by private households, which grew much faster in the USA and China than in the EU. Significantly less is invested in the EU than in the other regions of the world considered. This raises the question of the quality of the EU as a location and how it can position itself better in international competition for investments. The relevant indicators when assessing the competitiveness of the EU are the quality of state structures and infrastructure, the available knowledge, access to natural and financial resources, the cost structures and the size and purchasing power of the market. The focus of the analysis of location quality is on industry, which is of particular importance for the economic development in Europe and the investment dynamics of the European national economies. The IW location index, which looks at the industrial location quality for 45 industrialized and emerging countries, clearly shows that the USA is the more attractive investment location overall compared to Europe. The gap in the availability of natural and financial resources is above average. Access to cheap commodities such as energy sources is an important, hard-to-catch location factor for the US, but Europe's chronic underdevelopment in corporate finance and skilled labor could be addressed. which considers the industrial location quality for 45 industrialized and emerging countries clearly shows that the USA is overall the more attractive investment location compared to Europe. The gap in the availability of natural and financial resources is above average. Access to cheap commodities such as energy sources is an important, hard-to-catch location factor for the US, but Europe's chronic underdevelopment in corporate finance and skilled labor could be addressed. which considers the industrial location quality for 45 industrialized and emerging countries clearly shows that the USA is overall the more attractive investment location compared to Europe. The gap in the availability of natural and financial resources is above average. Access to cheap commodities such as energy sources is an important, hard-to-catch location factor for the US, but Europe's chronic underdevelopment in corporate finance and skilled labor could be addressed.
The European Commission’s International Digital Economy and Society Index (I-DESI) paints a similar picture. On average, the EU performs significantly worse than the US and just ahead of China on the five factors examined, connectivity, digital skills, internet use, digital technology and public digital services.
In order to keep up with the world leaders in the industrial sector, but also in mastering important digital key technologies, existing potential must be leveraged. A study by the scientific service of the European Parliament comes to the conclusion that with the help of the European Union more than 2.2 trillion euros in potential for economic output can be raised. In view of the below-average development of the economic performance of the EU27 countries compared to the USA and the world, the use of this potential and the expansion of the digital single market in particular must not be forgone. Access to natural raw materials remains a fundamental disadvantage of the EU and is becoming increasingly difficult, also against the background of the Ukraine war.