Will the euro-zone’s product sophistication improve after COVID?
It is widely argued that the euro-zone economy’s product sophistication will improve after COVID , based on the following ideas: The economies will become increasingly digital; The energy transition will drive technological progress; Sophisticated industries (medicine s , electronics) will be reshored in European countries. We fear the opposite trend, due to : Labour market polarisation, between high-skilled and low-skilled jobs, due to technological progress; The low technological level of electric cars compared with internal combustion cars ; the low technological level of thermal insulation of housing; The small size of the technology sector (in the broad sense) even in the countries where it is larger; The major difficulty of reshoring industry in the euro zone.