There are many different explanations for the euro crisis: poor fiscal management, loose banking regulation, etc...But one major contributor to Europe’s problems that continues to hold back economies today is a lack of innovation, reported Simon Nixon of The Wall Street Journal.
The European Commission’s own “Innovation Scorecard” shows that on almost every measure of innovation, the European Union lags well behind the U.S. and on some measures now lags parts of Asia, while differences between EU countries are widening.
Worryingly, in some countries, progress on improving innovation has gone into reverse as financial pressures have eaten into budgets. Boosting innovation is essential if Europe is to raise its long-term sustainable growth rates...
Nixon continues to report that innovation has been held back by the EU’s reluctance to adopt a science-based approach to regulation.
"There is overwhelming evidence that innovations developed by the biotech industry can bring substantial benefits to agriculture in terms of higher crop yields and more efficient use of land and water. Yet the EU, under pressure from domestic lobbies in member states, has ignored the science and only ever licensed two genetically modified organisms, or GMOs, one a maize product produced only in Spain, the other the Amflora potato, developed by German chemical giant BASF. The firm waited 13 years for approval before withdrawing the product from Europe and transferring its research to the U.S.
"Indeed, some fear that science has dropped even further down the EU agenda under the current commission. Last year it abolished the position of EU chief scientific adviser, a post only created in 2012. At the same time, the commission raided the Horizon program, a major source of funding for academic research, to provide seed capital for new EU infrastructure investment funds."
Simon Nixon nails it on the head with his conclusion: Successful innovation depends on collaboration and openness to outsiders and new ideas. If Europe is to truly escape its crisis-ridden past, it needs to abandon its instinctive protectionism.