The European Union’s remarkable growth performance relative to the United States
The European Union’s remarkable growth performance relative to the United States
The EU has outperformed the US on per-capita output growth; in terms of output per hour worked, some EU countries are as productive as the US
The article chooses to take a metric that you usually do not see much: GDP per employee and per hours worked, at purchasing power standards
The European Union suffers from numerous weaknesses compared to the United States, including the lack of European tech giants
I for one do not mind that the EU legal environment does not lend itself easily to forming megacorporations. There is a lot of great innovation coming from the EU. The development of Lemmy is for example funded by the EU public sector.
On the topic of the article, I wonder how much of our economy is still restrained by still existing protectionism and division between member states. There is free trade, yes, but we still speak different languages and moving to work between countries is still not as easy as moving between US states.
So why are Stellantis and VW owning all your car companies if it’s hard to form mega corps?
Unilever own almost everything you can think of in the world and Britain was in the EU.
Nestle.
Etc etc. just because you don’t have a successful tech industry doesn’t mean you don’t have ridiculously large mega corporations
Because the companys at the core (and the sectors they work in) of these megas are comparably ancient compared to technologiy megas. And they started at a time before today's easily accessable global market.
While big tech companies are the startups of just a few decades ago. And there it is immensely beneficial a) to have a big domestic market and then b) to be able to reach a lot of international markets that speak your language without the need for translations (the translations can basically start later for the countries with an already established market to finance it).
For this reason you see a US dominance in tech (big domestic market and the language most internationally understand), then followed by countries like UK (same language), China or (emerging) India (big domestic market).
While new European companies especially in the tech sector basically have no chance unless they develop in foreign english in the first place, and even then they are still at a disadvantadge.
I don't think the language barrier is that big of a deal. And more importantly I think the cultural value it provides us vastly outweights the economic benefit of a shared tongue.
I think one of the more urgent reforms that could help the EU prosper would be a common fiscal policy. We have the same tarifs on goods coming from abroad and most of us share the same currency, but countries are still offering varying tax rates. I think having an EU wide tax policy would help spreading the European branches of foreign companies more evenly. Though I reckon not everyone would like this (wink wink, Ireland).
EDIT: oh and also. I agree with your overall point, but using Lemmy as an example for "great innovation coming from the EU"...
I think one of the more urgent reforms that could help the EU prosper would be a common fiscal policy. We have the same tarifs on goods coming from abroad and most of us share the same currency, but countries are still offering varying tax rates. I think having an EU wide tax policy would help spreading the European branches of foreign companies more evenly. Though I reckon not everyone would like this (wink wink, Ireland).
It's interesting because every US state has a different fiscal policy (Delaware being the well-known tax heaven for companies for instance), and it doesn't seem to hinder them too much.
There is free trade, yes, but we still speak different languages and moving to work between countries is still not as easy as moving between US states.
The language is a big one. English seems to become the lingua franca, but the proficiency level among the population differs a lot from one area to the other, and also brings the question of the local culture and heritage.
I was thinking the other day that just even a language such as Interlingua (https://en.wikipedia.org/wiki/Interlingua), that can be easily learned for all speakers of Romance languages, would help a lot in collaborating between populations of neighboring countries. On the other side of the spectrum, languages like Latvian might go extinct due to the massive emigration: https://data.worldbank.org/indicator/SM.POP.NETM?locations=LV
We will not get people who are past their 40s to learn a new language en-masse. Meanwhile many of the young generations are quite proficient with English.
In the business context in particular it is important that language is precise, so contracts can be negotiated. This often enough is an issue even if all parties are of the same native language. There exists a lot of legal interpretation for each language as to how specific terms are to be understood, as well as standard formulations and references for specific industries.
All of this established practice would have to be re-established with a constructed language. This process takes decades, if not centuries. In the current situation it seems much easier to teach proper English in school and encourage usage of English, so people are proficient in it.
There is a lot of great innovation coming from the EU. The development of Lemmy is for example funded by the EU public sector.
How does Lemmy affect GDP though, how many work places has Lemmy created? The article is about economics, after all. And what's the actual innovation? It's based on a W3C standard and is essentially a clone of reddit. There's no innovation.
Those are partly the same topic btw...
Not having a massive domestic market to start in and even higher requirements to translate your product costs money. It's not a coincidence that the country with the most successful tech startups in europe is english-speaking.
This is very good info, most US /EU comparison studies are US centric. And any comparison between these two, although interesting, is too different. This article compensates the difference by using Purchasing Power, finally.
But in this article, and this still bites me a bit, they are still comparing the US universities according to the US ranking and the Times ranking, in which they score lower. Other articles comparing education, state clearly that the standards for US/ EU education quality are different.
Also flinging in China's economy as a third party for comparison, won't help us much. The WTO ( iirc) just accepts any output figure Beijing gives them, but there is no accounting for it.
So let's keep this quality studies and info rolling, and see how it can enlighten us.
Added:
● par 2:" Frustrated with current university rankings – mostly commercial ventures that give greatest importance to research – the European Union is backing a new form of listing." link euroactiv 2013
● par 3:" How to measure China’s true economic growth? Mr Li confessed that the province’s gdp figures were “unreliable”. link economist 2023
I had an argument with some blog poster here recently, who tried to compare the US and EU based on how neoliberal the economic policies are. But the difference in economic growth was then attributed to these policies, ignorinh the underlying structural factors.
Unfortunately i rarely see articles like this one, that adresses the structural aspects. Overall population and working population are key factors to economic growth. The US population grew siginificantly over the past two decades, while European populations only grew minimally or stagnated.
If the reactionary and liberal politicians in the EU blame the overall slower growth of the economy compared to the US on labor rights, social systems or public companies they deflect from how their restrictive immigration policies are the main factor why the US can grow faster economically.
I get the impression that the young people in the West are, in general, poorer than their parents were.
Compare how many days the generation of our parents needed to work to maintain a family to how many hours the younger generations work.
Our parents did it with 5 days of work (single income) and now we work 7 approximately (one full and one parttime or 2 parttime).
Definitely true, but valid on both sides of the Atlantic, there were a few articles on !personalfinance@lemmy.ml about cars and houses becoming unaffordable in the US
All this is to say employee pay rise is some 15 years overdue.