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The recent US national security strategy offers a flawed assessment of Europe. It claims that open-border policies and so-called "woke" policies represent an existential threat to European civilization. Yet, this argument is based on a serious misreading of the situation. The actual danger confronting Europe is not cultural but economic and technological lag.

A Glaring Growth Gap Separating Europe and the US

The data paint a stark contrast. From 2008 and 2023, American economic output surged by 87%, while a mere thirteen and a half percent increase for the EU. Over this period, European income per person dropped from over three-quarters to just half of the US level. Strikingly, even the poorest US state now has a greater average income than major European economies like France and Italy.

Currently, roughly half of the world’s 50 largest tech companies are American, while only four are from Europe.

The Innovation Deficit: A Critical Question

The growing disparity is driven by superior efficiency gains in the United States, fueled by technological innovation and better use of resources. The scene of world technology dominance is decidedly American. Over the past fifty years, hundreds of American startups have scaled into companies valued at over ten billion dollars, versus just 14 in the European continent.

This disparity prompts a vital question: As the competition for tomorrow's sectors like AI, semiconductors, and fusion energy, where does Europe positioned? Experts widely agree it is essentially a two-horse race between the United States and China, with Europe entering at a clear handicap.

Underlying Factors of the Continent's Technological Lag

Several major reasons explain this innovation chasm.

• Financing Ecosystem: The US boasts a far deeper and more dynamic network for funding startups. Europe has yet to establish a genuine unified investment market, which caps the growth potential of emerging companies.
• Bureaucratic Hurdles: Complex and divided rules hamper European business. A American entrepreneur can introduce a service under one set of laws to access a consumer base of hundreds of millions. The EU, despite a bigger population size, is divided among 27 different national regimes, creating significant market obstacles.
• Mindset Differences: Attitudes toward entrepreneurial failure vary greatly. In parts of Europe, business failure was historically met with stigma, whereas in the United States, it is often seen as a badge of experience.
• Military Investment: The United States enjoys a deeply integrated innovation pipeline linking defense and academia. Europe's chronic underinvestment in military capabilities has weakened its capacity for pioneering research.

The Road Ahead: Reasons for Hopefulness

Despite these hurdles, one can find reasons for hope. Policymakers are growing more conscious of the existential challenge and have started to propose substantial change. Key reports on EU competitiveness and the single market highlight the necessity of major changes.

With the right policies and regulatory reforms, Europe's strengths could support far greater levels of commercial innovation.

Europe retains considerable advantages: skilled human capital, excellent schools and universities, and premier labs. Alongside a vast domestic consumer base and high savings rates, these foundations have the potential to trigger a surge of investment and entrepreneurship.

Crucially, even if Europe does not take the lead in creating cutting-edge technologies, it can still significantly boost economic output by adopting and adapting innovations from other regions.

A Critical Juncture

The European Union now stands at a decisive moment. As the saying goes, decline often happens "slowly, then all at once". To date, Europe's technological decline has been gradual. However, if it fails to take bold steps to address its deep-seated problems, today's gradual weakening could give way to a rapid and permanent loss of world influence.