Developers in Europe vs USA: the race for Digitalisation and Innovation UPPER HAND

Motivation

There is a growing consensus that companies in Europe turn to invest hugely in tangible assets like machines and buildings, partly due to the legacy of the continent’s strong position in manufacturing industry. However, investing in intangible assets, like data and software, that might put Europe at front of the next wave of innovation is regretably ignored. The outcome of this is that, when it comes to innovating and carrying out successful digital transformations, Europe falls behind China and the USA. It is usually reported that, upscaling of Startups in Europe happens at only half the rate of that seen in the USA due to lack of needed capital.

Harvard University professor Michael E. Porter once said: “A nation’s competitiveness depends on the capacity of its industry to innovate and upgrade.”

Economic experts advised that, nations should consider investing in data and software, artificial intelligence, IoT, blockchain, quantum computing or synthetic biology with the reason that they are crucial for capturing the front position in next wave of future innovations.

Now assuming that Europe and the USA are racing for upper hand in Digitalisation and Innovation of their industries, how prepared are they? In which areas would Europe have an upper hand and in which areas would USA have an upper hand?

Against this background, we use in this article 2020 Stack Overflow Survey dataset focusing mainly on Developers form Europe and the US. The dataset has 12,469 respondents form USA and 17,534 respondents from Europe (28 countries (EU and UK)). Our reason for selecting these datasets is that we believe that Developers have crucial roles to play in shaping up the future landscape for digital transformations and innovations. By doing this, we hope to contribute in uncovering some sort of vital information that any interest group might use, when it comes to designing measures pertaining to digital and innovation policies.

We constructed our analysis using some selected variables. We first calculate the percentages for the given variable for each of the two sample (Europe and USA). Thereafter, we determine the between difference of the given variable by subtracting percentage values of the US from that of Europe. The table below explains how the percentage differences are calculated for each factor.

Percentage difference between Europe and the USA for Organsational Struture for Developers

Finally, we test the hypothesis to ascertain, if direction of magnitude of the measure (percentage differences) for the given factors are statistically significant or not and then draw our conclusion. The method of our approach is here.

To begin, we make following assumption on our sample dataset.

1. The sampling method for each population is simple random sampling.

2. The samples are independent.

3. Each sample includes at least 10 successes and 10 failures.

4. Each population is at least 20 times as big as its sample.

5. The null hypothesis is that: percentage difference for the considered factor is statistically insignificant as against the alternative that the difference is significant. The hypothesis test is done using 95% confidence interval.

  1. How are Developer types distributed within Europe and USA. For which Developer types can we observe significant differences.
Percentage Differences between Developers in Europe and the USA

Take a look at the graph above. This is a representation of the between difference for Developer types for Europe and the US. All the graphs above the zero line represent percentage differences, where Europe has an upper hand and the graphs below the zero line show where the magnitude leans towards the US. Just looking at these graphs, one may think, for example that there are more Back-end Developers in Europe than the US and more Full-stack Developers in the US than Europe. But are these differences significant?

Take a look at the outcome of the test for significance.

Below is a summary of the outcome of the test for the null hypothesis and the alternative. On the left-hand side, we have factors for which the null hypothesis is rejected — meaning that the between percentage differences for these factors are significant. In the next column, we see factors for which percentage differences are insignificant. For example, the second column indicates that there are potentially equal number of Desktop or Enterprise applications Developers, Game and Graphics Developers, Product managers, Scientist and System administrators in both Europe and the US.

Percentage Difference between Developers in Europe and USA

But when you consider the first column, we observe huge difference for Developer types for both Europe and US, with the US having more developers when totality is taken into consideration.

We will conclude that highly likely Europe has more Academic Researchers, Back-end Developers, Developers for embedded applications or devices and Educators.

US turn to have more Data or Business Analysts, Data Scientists or Machine Learning Specialists, Database Adminstrators, Designers, Front-end, Full-stack, QA or Test Developers, Devop Specialists, Data Engineers, Site Reliability Engineers, Engineering mangers and Marketing or Sales professionals and Senior excutive/VP.

Next we look at the organisational types .

2. How are the difference patterns for Organisational types distributed?

Percentage difference between Organisational Structure between Europe und USA

Here again, we present outcome for the test of significance.

Significance of the difference between organisational structure between EU and USA

So we see that potentially, there are more enterprises in the US having employee size ranging from 1000 to 10,000 and more, which may suggest that enterprises the US have large Enterprises. Europe has more freelancers, sole proprietors and organisations having employee size range between 2 to 1,000.

Next we consider the variable New Purchase Research.

3. What are the sources of information for Developers when they make research for the purchase of new tools?

Percentage difference for New Research Purchase between Europe und USA

Again the test of significance is presented below.

Significance of the difference in Research of New Purchase between Europe and USA

From table we see that, potentially Developers in Europe start a free trial, when they want to undertake new tool purchases. This seems to be different for Developers in the US. They turn to obtain their information most likely from various sources.

4. How are difference patterns for job satisfaction in Europe and the USA distributed?

Take a look at the percentage differences and significance of these differences graph and table below.

Percentage Difference in Job Satisfaction between Europe and USA

The outcome of the test is below.

Significance of the difference in Job Satisfaction between Europe and USA

From the above table we see, in terms of job satisfaction, Developers in the USA are very satisfied. But we have potentially huge variation in job satisfaction pattern for Developers in Europe.

5. How are Job Search difference patterns distributed between Europe and the USA?

Percentage Difference in Job Search between Europe and USA

Here once again, the outcome of the test.

Significance of the difference in Job Search between Europe and USA

Most likely, more Developers in the US are looking for jobs than their counterparts in Europe. More developers in Europe are potentially not actively looking, but are open for new job opportunities.

In Conclusion

Europe has potenitially more Academic Researchers, Back-end Developers, Developers for embedded applications or devices and Educators.

The USA seems to have more Data or Business Analysts, Data Scientists or Machine Learning Specialists, Database Adminstrators, Designers, Front-end, Full-stack, QA or Test Developers, Devop Specialists, Data Engineers, Site Reliability Engineers, Engineering mangers and Marketing or Sales professionals and Senior excutive/VP.

Certainly, they both have equal number of Desktop or Enterprise applications Developers, Game and Graphics Developers, Product managers, Scientist and System administrators.

2. Organisational Structure

It is highly certain that Europe has more freelancers, sole proprietors and organisations having employee size ranging between 2 to 1,000. The US has potentially more organisations with employee size between 1,000 to 10,000 and more employees.

3. Sources for Information for New Tool Research

Developers in Europe potentially start free trials before deciding buying new tools. Developers in the US use networking like Developers they know, visiting developer communities like Stack Overflow, observing ratings or reviews on third party sites like G2Crowd, using advertisements on companies sites, and adverisement emails from companies.

4. Job Satisfaction

Interms of job satisfaction, Developers in the US are very satisfied. But we have potentially huge variation in satisfaction pattern for Developers in Europe.

5. Job Search

Ultimately more Developers in the US are looking for jobs. Other other hand, more Developers in Europe are potentially not actively looking, but are open for new job opportunities.

We leave this question for you to answer.

Many thanks for reading.

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Paul Dzitse

Paul Dzitse

Econometrician and Data Analyst/Scientist