Europe’s REAL Problem: Innovation!

By Shlomo Maital

EU Innovation

Innovation: Only the Dark Green is “Innovation leader”

The EU has a lot of headaches – more than an ocean-full of Tylenol can assuage. Brexit, and copycat exit movements (including Austria, Catalonia, parts of France, eastern Europe); Greek debts that can neither be paid off nor written off (owing to stubborn German banks); a banking system that has an EU central bank but fragmented country-level banks, that can neither be integrated nor freed and opened; and many more.

   Some of these headaches are being (badly) addressed. But one key issue is utterly ignored, as the Washing Post recently noted. *   In an EU report, EU Regional Innovation Scoreboard 2016, it is claimed that:

   The continent’s most creative and productive regions are in Germany, France, Britain and the Nordic countries. Southern England, northern Denmark, southern Germany and Paris are particularly successful — whereas Romania, Poland and Spain have disproportionately more regions that lack innovation. But as a political and economic union, all of Europe should be worried. Europe is becoming less innovative overall.

   Why is this worrisome?   One of the main points of a single market is that by creating a huge market, the world’s 2nd biggest economy, you open huge opportunities for entrepreneurs, whose path-breaking ideas can now reach 510 million people (EU), $20 trillion economy (2nd in the world) and per capita GDP of $37,000.   But the opposite has occurred. Europe is becoming less innovative, as the report shows.  

     In Belgium, Greece, Ireland, the Netherlands and Romania, performance declined in all regions,” the report’s authors note. Germany — often considered the economic powerhouse of the continent — was also unable to improve performance.

         I taught in France for many years.   France has some of the world’s most talented creative engineers. But they don’t start businesses! Why? There are a hundred reasons. Risk, bureaucracy, lack of finance, rigid labor markets…

           You can’t solve a problem until you face it. Europe is preoccupied with other problems, and is not even beginning to face its innovation problem.  Alas.

* Rick Noack “Where Europe is most and least innovative, in 6 maps,” Washington Post. 2016.