The author, Philippe Aghion,is a 2025 Nobel laureate in economics.
From Project Syndicate, December 10:
Now that major geopolitical developments have forced Europeans to rethink how they will ensure their own prosperity, security, and sovereignty, policymakers must not take innovation for granted. This primary engine of economic growth will not run smoothly unless it is properly tuned and carefully maintained.
PARIS – While debates about Europe’s flagging growth prospects have been ongoing at least since the turn of the century, the 2020s have lent them new urgency. Not only did Russia’s invasion of Ukraine expose a dangerous dependence on imported energy, but a change of administration in the United States has forced Europeans to rethink how they will ensure their prosperity, security, and sovereignty in the future. Moreover, with America and China racing ahead in AI – widely assumed to be the next general-purpose technology, on par with the internet – Europe’s lack of dynamism has become an emergency.
The problem is not just the commonly cited gap between per capita incomes in the European Union and US. It is that Europe has long been falling behind technologically, boasting few globally recognized leaders in the digital platform economy, AI, the new space race, and other sectors that will be central to competitiveness and security in the 21st century. Deeply dependent on advanced technologies made elsewhere, and unable to generate the growth needed to finance its strategic objectives and future liabilities, Europe is a textbook example of why creative destruction – the toppling of less productive firms by innovative new challengers – matters. Forego it, and moderately reduced growth prospects are only the start of your problems....
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If interested see also:
October 13 - Innovation and Creative Destruction: Joel Mokyr, Philippe Aghion, and Peter Howitt win Nobel Prize in Economics
October 18 - Once Upon A Time At Harvard: "What The Gospel Of Innovation Gets Wrong
