Europe’s competitive edge
Despite perceptions of lagging behind the US in productivity, Europe holds significant strengths that often go unrecognized. According to the European Central Bank, since the 1990s, the Eurozone’s productivity has declined by some 20% compared to that of the US. But this is not the full picture.
The dispersion of productivity, rather than average productivity, reveals Europe’s more egalitarian structure, typically offering higher social justice, quality of life, and income levels in many countries.
European economies such as the Nordic nations, as well as Switzerland, the Netherlands, and Germany, all frequently top quality of life indices, such as the OECD Better Life Index. On a per-capita basis, the US lags the net national income of Switzerland, Norway, Luxembourg, and Ireland. 
Still, criticism persists. It’s often said that Europe is falling behind in tech. And, though it has produced some home-grown tech giants like Skype, Spotify, Nokia, Ericsson, and Booking, few have become market leaders. Or they are snapped up by bigger American firms, like Google’s £400mn acquisition of DeepMind, an AI start-up based in London.
Nonetheless, Europe’s capacity for innovation is high. Take AI research: Europe far surpasses the US in terms of the sheer number of publications in journals. Between 2016 and 2020, Europe amassed 82,000 AI publications, compared to America’s 44,000, and China’s 76,000.
The challenge lies in investment, with the US leading in venture capital investment. The amount of VC money invested in the US has passed $77bn so far this year. European nations lag, with the UK top at $8.9bn, Germany at $3.5bn, and France at $3.3bn.
While there is plenty of European capital available for good deals, the problem is that much of it flows overseas to places like Silicon Valley in California. What this indicates is that Europe possesses substantial dry powder but lacks a unified capital market to allocate it locally.