The European Response

Although by the 1980s Europe constituted approximately one-third of the world market for electronics, European manufacturers were in a weaks position, supplying only 10 per cent of the world and 40 per cent of domestic IT markets. In 1975 the European Community had enjoyed a trade surplus in IT of 1.7 billion ECU; by 1984 this surplus had been turned into a 5 billion ECU deficit. By 1981 the Japanese had completed their VLSI project, and were on the threshold of their Fifth Generation Computer initiative; while IBM, as a consequence of large-scale, innovative and highly successful research, commanded 50 per cent of the European computer market. By contrast, the position of European manufacturers, which were estimated to be devoting 80 per cent of their R&D expenditure to catching up, appeared to be far less secure.