Europe is facing a grave threat, but it's not coming from the supposed "woke" policies that US President Donald Trump has labelled as a menace. Instead, the real challenge is Europe's own economic and technological backwardness.
The numbers tell the story: between 2008 and 2023, the US GDP rose by an impressive 87%, while the EU's grew by just 13.5%. The disparity in per capita income is even more staggering, with the poorest US state outdoing several major European economies. This is not a result of demographics, but rather stronger productivity growth in the US, driven by technological innovation and higher total factor productivity.
The US has a far deeper and more dynamic ecosystem for financing startups, while Europe still lacks a genuine capital markets union. This limits the scale and speed at which new firms can grow. Excessive and fragmented regulation also hampers European companies, making it difficult for them to access new markets. The internal market barriers in the EU act like a tariff of about 44% for goods and 110% for services – far higher than the tariffs imposed by the US on most imports.
Cultural attitudes toward risk-taking differ sharply between the two regions. Until recently, failed entrepreneurs in some EU countries faced criminal penalties, while in the US, a tech founder who has never failed is often seen as too risk-averse. The US also benefits from a deeply integrated academic-military-industrial complex, which drives innovation and investment.
Europe's chronic underinvestment in defence has weakened its innovation capacity, with many political leaders framing higher spending as a trade-off between security and social welfare. This free-riding on US defence spending since the end of the second world war has limited the type of innovation that could have generated more of both through higher productivity.
If Europe fails to address its structural weaknesses, today's slow erosion could give way to a sudden and irreversible loss of economic relevance. The next wave of innovation is expected to be even more disruptive than anything seen over the past half century.
Despite this, there are reasons for cautious optimism. Policymakers have begun to advance serious reform proposals, including two major reports on EU competitiveness and the single market by former Italian prime ministers Mario Draghi and Enrico Letta. Europe retains considerable strengths, including high-quality human capital, excellent education systems, and world-class research institutions.
These assets could support much higher levels of commercial innovation if given the right incentives and regulatory reforms. Even if Europe never leads in cutting-edge technologies, it could still boost productivity by adopting and adapting American and Chinese innovations – many of which are general-purpose in character and benefiting both adopters and pioneers.
In conclusion, Europe's technological lag is not a consequence of "woke" policies or other cultural issues. It's a symptom of deeper structural weaknesses that need to be addressed. The clock is ticking, and if Europe fails to confront these challenges, it risks becoming increasingly irrelevant in the global economy.
The numbers tell the story: between 2008 and 2023, the US GDP rose by an impressive 87%, while the EU's grew by just 13.5%. The disparity in per capita income is even more staggering, with the poorest US state outdoing several major European economies. This is not a result of demographics, but rather stronger productivity growth in the US, driven by technological innovation and higher total factor productivity.
The US has a far deeper and more dynamic ecosystem for financing startups, while Europe still lacks a genuine capital markets union. This limits the scale and speed at which new firms can grow. Excessive and fragmented regulation also hampers European companies, making it difficult for them to access new markets. The internal market barriers in the EU act like a tariff of about 44% for goods and 110% for services – far higher than the tariffs imposed by the US on most imports.
Cultural attitudes toward risk-taking differ sharply between the two regions. Until recently, failed entrepreneurs in some EU countries faced criminal penalties, while in the US, a tech founder who has never failed is often seen as too risk-averse. The US also benefits from a deeply integrated academic-military-industrial complex, which drives innovation and investment.
Europe's chronic underinvestment in defence has weakened its innovation capacity, with many political leaders framing higher spending as a trade-off between security and social welfare. This free-riding on US defence spending since the end of the second world war has limited the type of innovation that could have generated more of both through higher productivity.
If Europe fails to address its structural weaknesses, today's slow erosion could give way to a sudden and irreversible loss of economic relevance. The next wave of innovation is expected to be even more disruptive than anything seen over the past half century.
Despite this, there are reasons for cautious optimism. Policymakers have begun to advance serious reform proposals, including two major reports on EU competitiveness and the single market by former Italian prime ministers Mario Draghi and Enrico Letta. Europe retains considerable strengths, including high-quality human capital, excellent education systems, and world-class research institutions.
These assets could support much higher levels of commercial innovation if given the right incentives and regulatory reforms. Even if Europe never leads in cutting-edge technologies, it could still boost productivity by adopting and adapting American and Chinese innovations – many of which are general-purpose in character and benefiting both adopters and pioneers.
In conclusion, Europe's technological lag is not a consequence of "woke" policies or other cultural issues. It's a symptom of deeper structural weaknesses that need to be addressed. The clock is ticking, and if Europe fails to confront these challenges, it risks becoming increasingly irrelevant in the global economy.
the whole article just read... I'm so over how they always make EU vs US comparisons like this... can't we have a more balanced discussion? 
GDP numbers don't even tell the whole story, there are other factors at play... like healthcare and education systems, for instance. And what's with all the "menace" talk around US policies? Can't they just focus on finding solutions? 
Europe's GDP has been stagnant for decades! 13.5% growth over 15 yrs 
compared to US's 87%. EU's lack of capital markets union is crippling startups. Regulation's too much, tariffs are insane - 44% for goods, 110% for services 
. Failed entrepreneurs in some EU countries were even jailed 
. Now they're all about "innovation" while US has a thriving academic-military-industrial complex 
. Europe's underinvesting in defense and that's affecting innovation. If they don't fix this, they'll be left behind 
. But there's hope - reform proposals are coming 
. Maybe they can adapt American & Chinese innovations to boost productivity. Fingers crossed 
Europe needs to wake up to its own problems, not just blame others 
. The numbers don't lie – US is crushing it in terms of innovation & growth, while EU's are struggling to keep up 
. It's not about being "woke" or anything else, it's about making some serious changes to its economic & technological systems 
. The US has a way more dynamic startup ecosystem and capital markets union – what does EU have? 
A whole lotta regulation that's stifling innovation 
. And don't even get me started on cultural attitudes toward risk-taking 
. Europe needs to start taking bold action, not just talking about reform proposals 
. But if it gets its act together, I think EU has some great strengths that can drive innovation & growth too 
.
I'd love to see more context on that one.
. It's easy to say Europe needs to "fix its internal market," but what does that mean in practice? We need concrete proposals, not just empty promises 
.
. But let's not underestimate the US's advantages either - that academic-military-industrial complex doesn't happen overnight 
.
. Seriously though, if they don't address these issues, they might end up being left behind in the innovation game 
! They're not even keeping pace with US economic growth 
️. And don't even get me started on those internal market barriers 
. And let's not forget about regulation 
and education systems 
, so that's not the problem... it's just a matter of putting those skills to use 
. And who knows, maybe adopting American and Chinese innovations 
could be the way forward? 
It's time for Europe to get serious about closing the innovation gap 
More focus on innovation & risk-taking should help Europe catch up 
but seriously, what's up with european politics? they're always so serious all the time 
can't they just take a chill pill for once? i mean, don't get me wrong, innovation is important and all that jazz 