Get with it, Europe

By: Simon Tilford

Published: March 9, 2007 in the International Herald Tribune

This article is an opinion piece that discusses how Europe is moving too slowly to ensure its place among the winners of globalization. The author says that Europe is not moving into knowledge-based industries fast enough to ensure it profits from the new division of labor being brought about by globalization. The reason the author feels this way is because the EU invests less than 2 percent of its GDP in research and development, far less than its competitors such as the United States or Japan.

The author says this is happening for two reasons. The first is that the fast- growing and R&D-intensive sectors, such as pharmaceuticals, software and technology hardware, have been weakly investing in by Europeans. “The proportion of R&D accounted for by these sectors is actually falling in Europe, with R&D increasingly concentrated in mature, slow-growing sectors, like the automotive industry. The second is that many of Europe’s leading researchers are dying out, with graduation rates not increasing to meet the demand for new researchers.

This is an important issue for globalization because Europe constitutes a large portion of the global economy. If some of these countries do not reform in the near future, they could start seriously lagging behind, which would be bad for all countries in the era of globalization because of the inter-connective nature of our economies.