Donald Trump's national security strategy presents a flawed view of Europe. It claims that unrestrained immigration and what it terms "progressive" agendas pose an existential risk to the continent's identity. However, this argument rests on a fundamental misreading of the reality. The true danger facing the EU is not societal but technological and economic lag.
The Stark Economic Divide Between the US and Europe
The data paint a stark contrast. Between 2008 and 2023, US GDP surged by 87%, while a paltry 13.5% increase for the European Union. Over this time, European income per person fell from 76.5% to just half of the American figure. Strikingly, even the poorest US state now has a greater average income than major EU nations like Italy and France.
Today, roughly 50% of the global 50 largest tech companies are US-based, while only four are European.
The Technological Deficit: A Critical Question
This widening economic gap is driven by superior efficiency gains in the US, largely due to breakthroughs and better use of resources. The scene of world technology leadership is overwhelmingly American. In the last five decades, 241 US firms have scaled into enterprises valued at more than ten billion dollars, versus only fourteen in Europe.
This gap raises a vital question: As the competition for tomorrow's sectors like semiconductors, AI, and quantum computing, what is the EU positioned? Experts widely agree it is essentially a two-horse race involving the United States and China, with Europe entering at a significant handicap.
Root Causes of the Continent's Technological Lag
Several major factors explain this technological divide.
- Financing Ecosystem: The United States has a far deeper and more dynamic system for financing new ventures. The EU has yet to establish a true unified investment market, a factor that limits the scale of emerging companies.
- Bureaucratic Hurdles: Complex and divided rules hinder European business. A US startup can introduce a product under one regulatory framework to access a consumer base of over 330 million. The European Union, despite a bigger population size, is split among 27 separate systems, creating huge internal barriers.
- Cultural Attitudes: Views on risk-taking differ sharply. In parts of Europe, a startup's collapse was once viewed with penalties, whereas in the US, it is often seen as a valuable lesson.
- Military Investment: The United States enjoys a deeply integrated academic-military-industrial complex. Europe's chronic underinvestment in defense has eroded its ability in breakthrough innovation.
The Road Ahead: Grounds for Cautious Optimism
Despite these challenges, one can find causes for optimism. Policymakers are growing more conscious of the existential challenge and have started to advance serious reform. Notable analyses on European competitiveness and the single market point to the necessity of sweeping reforms.
Given appropriate incentives and regulatory reforms, Europe's strengths might enable far greater levels of commercial innovation.
The continent still possesses significant strengths: skilled human capital, excellent education systems, and world-class labs. Alongside a large internal market and high savings rates, these foundations could trigger a new wave of investment and entrepreneurship.
Importantly, even if Europe does not become the leader in creating next-generation technologies, it can still dramatically increase productivity by implementing and tailoring innovations from elsewhere.
An Inflection Point
The European Union now faces a decisive crossroads. To paraphrase a famous line, decline often happens "gradually and then suddenly". To date, the continent's technological decline has been gradual. But, if it fails to take bold steps to address its deep-seated problems, today's gradual weakening could give way to a sudden and irreversible loss of world influence.
