EU’s laggard tech a democratic blessing in disguise

Europe invests a lot in research, and publishes and patents many ideas. But it fails to compete with the US and China when it comes to translating its innovation effort into large, global technology firms. The seven largest US tech companies, Alphabet (Google), Amazon, Apple, Meta, Microsoft, Nvidia and Tesla, are 20 times bigger than the EU’s seven largest, and generate more than ten times more revenue.

That isn’t to say Europe has no tech success stories. The world leader in music streaming is Spotify, a Swedish company. Dutch company ASML produces the world’s most advanced computer chips, and Danish drugmaker Novo Nordisk is leading the extremely profitable market for weight-loss drugs.

European start-ups are also actually a better deal for venture capitalists on average than US ones. But they rarely develop into major global players. The main reason for this is that Europe regulates more.

Research has found that Europeans are less optimistic than Americans about social mobility, want to redistribute income more than they do in the US, and have a more cautious relationship to owning risky assets.

This leads to some very predictable outcomes. Environmental, inequality and life expectancy metrics perform better in Europe, while the US does better on purely economic indicators.

This is not necessarily bad news. In the competition to define the rules of the technological game, combining the huge US tech ecosystem and the European obsession for regulation may be the best chance to protect consumers, freedom of expression, accountability and transparency around the world.

The world leader in regulation

The US Food and Drug Administration (FDA) is faster to expedite its approval of new drugs than the European Medicine