by Franz Pichler

At the beginning of July, at the Informal Competitiveness Council in the Netherlands, European research ministers discussed ways to encourage the productivity performance of European firms. Between 1991 and 2003, the U.S. economy grew by 47 percent, compared to the EU growth of only 28 percent. Europe’s poor productivity record does not prevail across the board: in fact, in about half of its industries, Europe actually performs better than the United States. However, the United States has been remarkably successful in raising productivity in a small number of excellently performing service industries, e.g., retail, wholesale, financing. Furthermore, the fastest growing industries in the United States grow considerably faster than those industries in the EU. The innovative environment of excellent research universities and start-ups plays an important role in helping U.S. firms to achieve significant productivity improvements. The response of the ministers to these challenges from the United States and also from Asia, was a commitment to accelerate the “internal market strategy” and prioritize science and research on the European and national level within member states.

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