Investment asymmetry in the development of the IT sector: a comparative analysis of European Union countries

Abstract

The aim of this article is to examine investment asymmetry in the development of the IT sector across European Union countries, taking into account structural, institutional, and macroeconomic factors. The author conceptualizes the notion of investment asymmetry in the context of the digital economy and elaborates on the unique characteristics of the IT sector as a specific target of investment, marked by high capital mobility, globalized competition, and dependence on innovation capacity. The study emphasizes the leading role of Western and Northern European countries: namely France, Germany, Sweden, the Netherlands, and Ireland in attracting more than 70% of venture capital directed toward digital industries. This concentration highlights a structural imbalance in the development of innovation infrastructure among EU member states. A comparative analysis is conducted on key institutional factors such as the quality of public governance, the presence of national digital strategies, the level of investor protection, the efficiency of the judicial system, access to venture and private capital, and the dynamics of investment attractiveness indices across EU countries. Particular attention is given to the role of government incentives, tax benefits for IT companies, and the availability of innovation infrastructure, such as technology parks, R&D centers, and innovation hubs. A quantitative approach is employed to measure asymmetry by comparing individual countries’ shares in total foreign direct investment in the IT sector with their respective shares of EU GDP, the number of jobs created in relevant sectors, and their level of participation in pan-European digital transformation projects. The study also addresses the potential of the IT sector to act as a compensatory force for economic inequality, particularly in countries with less developed industrial bases. It is argued that the IT sector offers relatively equal initial conditions for attracting investment, provided that human capital and basic digital infrastructure are present. The article underscores the importance of developing a coordinated EU policy aimed at reducing investment asymmetry and expanding opportunities for smaller member states. This can be achieved by fostering technological hubs, improving access to finance, and enhancing institutional capacity.