Europe’s Middle-Technology Trap

Anita Dietrich, Florian Dorn, Clemens Fuest, Daniel Gros, Giorgio Presidente, Philipp-Leo Mengel and Jean Tirole

EconPol Forum, 2024, vol. 25, issue 04, 32-39

Abstract: The Lisbon strategy of the year 2000 failed: the share of R&D spending in Europe remains below the 3 percent of GDP target, far behind that of the US and China EU companies spend much less on R&D than their US peers and concentrate their innovation activities on midtech instead high-tech industries. Mid-tech sectors, however, tend to have lower growth rates and generate incremental innovations rather than large, disruptive ones Consequently, Europe currently lags in high-tech sectors (IT hardware, software, biotechnology, pharmaceuticals) and is losing ground to the US in terms of productivity, competitiveness, and economic growth EU funding for innovation is too small and needs reforms to focus more on disruptive leap innovations that foster business dynamics

Date: 2024
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