Facts and physics

What is the most important industry to the European economy? If you guessed finance, retail or construction, you’d be wrong. The industry that contributes most significantly to European GVA is, according to a recently published study by Cebr, the ‘physics-based industry’ (12% of GVA; €4.4tn). OK, this cheats a little, in that the roles which employ physics (including IT, engineering, life sciences, medicine and design) cross many traditional industry sectors. Nevertheless, physics’ contribution to highly skilled roles that contribute significantly in the long run, and which are typically resilient to automation is significant. These latter points are important, in that firstly, investments in physics tend to have multiplier effects that are not immediately apparent or direct. As European Physical Society President, Petra Rudolf illustrated, ‘Einstein, when he worked on stimulated emission, certainly did not think of lasers being used to operate on the eyes’. Secondly, the durability of these roles and associated businesses, is likely to lead to increased contributions to GVA over time relative to the contributions of other sectors. The industry ‘birth rate’ (the number of new businesses each year as a percentage of total businesses) has tracked consistently at around 11%, whereas the death rate has been consistently lower than that in the general economy, suggesting some measure of improved resilience in businesses which utilise physics in their operations. You can read the report here#economics