lack of investment in research, appetite for risk…”

The room was on its feet and visibly enthusiastic. The Marguerite-de-Navarre amphitheater of the Collège de France was packed to listen to the President of the Republic, Emmanuel Macron, exchange with the former president of the European Central Bank Mario Draghi, Wednesday November 13. The professor of economics at the College, Philippe Aghion, brought them together to discuss a subject that was not very exciting, the European disconnection from America, the theme of the report written by Mr. Draghi for the European Commission.

The loud applause from this audience of intellectuals, politicians, economists and industrialists praised the frightening clarity of the observation rather than the relevance of the solutions proposed. The shocking image that sums it up was provided by economist Antonin Bergeaud in his preliminary presentation. In 2005, in the United States, the top five companies filing research patents were Procter & Gamble, 3M, General Electric, DuPont and Qualcomm. From the general public, electricity, chemicals and telecommunications.

The same year, in Europe, Siemens, Bosch, Ericsson, Philips and BASF monopolized the top 5. Roughly the same sectors on both sides of the Atlantic. In 2023, the top five Americans are Microsoft, Apple, Google, IBM and Qualcomm. Digital on all levels. In Europe, it looks like a copy and paste from 2005: Bosch, Ericsson, Philips, BASF, only the chemist Bayer has replaced Siemens.

Economic marginalization

This comparison shows two essential things. On the one hand, the astonishing capacity of American capitalism to renew itself. And on the other hand, the violent shift towards the digital sector. It is the latter alone which explains Europe's decline. The observation suddenly becomes burning news when we realize that digital companies, such as the American Tesla or the Chinese BYD, have become the worst nightmare of European car manufacturers. Their last technological bastion attacked by a Californian company and a smartphone battery manufacturer.

Mr. Macron and Mr. Draghi have clearly identified the problem: lack of investment in research, appetite for risk, financial ecosystem… But Europe, according to Mr. Bergeaud, is also losing productivity and therefore ability to grow and create wealth because they work less than Americans and Asians. A social choice that the whole world envy but which has its downside, economic marginalization which limits the capacity to react to geopolitical and environmental challenges… So many limits of the Macronian “at the same time”, hit by the harshness of new times .