Europe: High-tech also-ran?

April 13, 2006
The Hannover Fair kicks off later this month in Germany. Hannover has long been billed as the premier industrial event in Western Europe and a place where you are likely to get a look at the latest technology Europe has to offer.

— Leland Teschler, Editor

But there may not be much innovative technology to see, at least not if European funding of research and development is any indication. Europe just doesn't spend as much on research as we do in the States. Whether you look at amounts spent on total research and development, percapita spending on R&D, or research efforts as a percent of GDP, Americans outspend the French, Germans, and Italians. The number of researchers relative to the size of the workforce is also higher in the U.S. America even has a higher "market share" of Nobel laureates.

Aside from notable exceptions such as CERN in Switzerland, European establishments have fallen behind in cutting-edge research and in high-tech work. No wonder, then, that the production of high-tech goods continues to grow at a much greater rate in the U.S. than in France, Germany, and Italy. In fact, some observers go so far as to say that Europe is slowly falling out of the major league when it comes to technology. Since 1997, for example, Singapore has produced more high-tech goods than Italy. Figured on a per-capita basis, high-tech production was more than three times higher in Korea during 2003 than in Germany.

With all these problems, you might think European leaders would be pulling out the stops to stimulate the development of new technologies. But it appears they aren't too concerned. In fact, the evidence is they are more distressed about the creative destruction that accompanies new industries and how innovation may upset the regulations they've imposed on themselves. Their biggest fear seems to be that technological change might make European labor markets more like those of the U.S.

Oddly, Europeans appear particularly determined to avoid giving workers incentives to improve their lot, whether through technology or other means. That is the only conclusion I can draw from comments made by a German politician a few years ago. He was serving as the president of Germany when he claimed there should only be a small difference between the pay of workers and managers because in Germany, "we mustn't slip down into American conditions."

Those sorts of attitudes don't bode well for the likelihood of seeing Europe become a wellspring of technological marvels. To my mind, that's a shame. In another era, we congratulated ourselves on spiriting the best rocket scientists in the world out of Europe before the Soviets could. Now it is more likely that Europe's finest brainpower goes toward devising regulations rather than launching rockets.

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