NCPA - National Center for Policy Analysis

In High-Tech Innovation, The Eu Is No U.S.

April 3, 2002

It would be a mistake to compare the collection of 15 countries that make up the European Union to a sort of United States of Europe. There are too many important structural differences -- and those differences have hindered technological progress there compared to such advances in the U.S.

  • For example, the U.S. is a single market, but the EU is not, with each country regarding the others as technological competitors -- meaning that there are duplications in governments' funding of innovative projects.
  • Research funds don't flow as they do in the U.S. to a relatively small number of academic powerhouses, but are scattered among hundreds of lesser universities.
  • In Italy, Austria, Spain and elsewhere, European regulations make it hard for researchers to commercialize their work.
  • Political infighting also makes it hard to create a Europe-wide stock market to finance technology start-ups -- and a Europe-wide patent has been held up for years because governments can't agree on what language the patent should be filed in.

Overall, the U.S. government spends about $60 billion annually in research and development.

EU governments spend about $45 billion. But experts estimate that about 20 percent of that is wasted due to one nation's project duplicating another's.

Source: Bob Davis, "The Outlook: Why Europe Trails the U.S. in High-Tech Innovation," Wall Street Journal, April 1, 2002


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