Europe, the old continent that was once the cradle of innovation, is now becoming that friend who always arrives late to the party. While China and the United States battle to lead the technological revolution, we remain seated, setting rules for ourselves, debating how to put the cap on plastic bottles. Regulation after regulation, as if that would bring back the leadership we lost a long time ago.
Here, I’m going to tell you why, if we keep this up, we’ll be left watching while others take charge. And I’m not saying this just because I enjoy being pessimistic, I’m saying it because the numbers and facts speak for themselves. Let’s get into it.
We Missed the Internet Train, and Now We’re Missing the AI One
First, a quick reminder of our brilliant track record. The Internet revolution came and went, and while the United States was giving birth to Google, Amazon, and Facebook, in Europe we were more concerned about regulating than creating. The result? We were left out of the game. Not a single European company has managed to reach the level of the big American tech giants.
And let’s be clear, it’s not that we lack talent or ideas here. We have plenty. The problem is that innovating in Europe is like running with a backpack full of stones. What in the U.S. or China is fertile ground for entrepreneurship, here is a minefield of regulations, taxes, and red tape that makes you wonder if it’s even worth trying. Guess what many European entrepreneurs do? They leave. In recent years, 30% of European startups valued at over a billion dollars (the famous “unicorns”) have moved their headquarters out of the continent. Why? Because it’s impossible to compete with so many obstacles here.
Draghi’s Plan: Too Little, Too Late
And now Mario Draghi, the former head of the European Central Bank, arrives with his report on Europe’s competitiveness. I don’t know what’s worse, the diagnosis or the solutions. The diagnosis we already know by heart: Europe is losing productivity, we’re falling behind the U.S. and China, and the funniest part of all is that it seems like no one in Brussels had noticed until now.
And what do they propose? The usual: spending money we don’t have, increasing debt (which will cost us dearly), and more regulation. Exactly, more rules, more hurdles, as if that would save us. But of course, who’s going to be the brave one to dare to deregulate? That would be a scandal. Here, the cool thing is to keep making rules, even if it condemns us to eternal mediocrity.
We Regulate Better Than Anyone, But We Don’t Innovate at All
In Europe, we are world champions in one thing: regulating. We love it. And I’m not saying we don’t need some rules, but at what cost? We are suffocating ourselves. While the U.S. and China are betting big on artificial intelligence, we’re more worried about how to regulate it. It’s as if, instead of inventing the wheel, we spent centuries arguing about how thick it should be.
Europe produces a disproportionate amount of laws and regulations that, far from fostering innovation, stop it dead in its tracks. The result? Less innovation and more bureaucracy. And the market doesn’t forgive. It’s not enough to have good ideas here; if you choke them before they become something, you’re left with nothing. In fact, while in the U.S. capital flows into technology, we’re still obsessed with regulating every inch of the process.
The Technology Gap: Falling Further Behind
Draghi’s report mentions the obvious: Europe is falling behind at an alarming rate. Did you know that since the 1950s, there haven’t been as many people at risk of poverty in Europe? That’s what happens when you lag behind. The gap in GDP per capita, productivity, and competitiveness between the European Union and the U.S. or China has only grown. And the most worrying thing is that technology isn’t saving us. While in Silicon Valley tech companies are booming with valuations exceeding a trillion euros, we’ve gone more than 50 years without a single European company reaching 100 billion.
What’s more, European investment in research and innovation is laughable compared to the U.S. To give you an idea, in 2021, we invested 270 billion euros less than they did. Then we wonder why we’re not competitive. Of course, if instead of investing in technology we’re still obsessing over the old automotive industry, this is what happens.
Less Regulation and More Action
Europe is at a crossroads, as all the reports say, and the decisions we make now will determine whether we remain a relevant continent or resign ourselves to being secondary. While others make bold moves, we continue swimming in our pool of rules. The problem is that when we finally realize it, it’ll be too late.
What we need is less regulation and more action. Less fear of innovation and more courage to create. Because if we stay on this path, we’ll be mere spectators of the future that others will build. It’s not about being reckless, but we can’t keep stifling our opportunities with excessive rules that smother any attempt to move forward.
So there you have it. Europe has the talent, has the ideas, but it lacks the ability to execute because it’s holding itself back. While others race ahead, we remain trapped in bureaucracy, regulating every last detail and letting ourselves be guided by the same policies that have led us to this point.
The choice is clear: either we bet once and for all on innovation and stop holding back our companies, or we resign ourselves to being the continent that could have been but never was. And if we don’t change now, there will be no turning back.
