French economist Philippe Aghion issued a stark warning to Europe shortly after winning this year’s Nobel Prize, declareing the continent was losing the technology race to China and the United States.
“Europe necessarys to wake up. We’re falling behind technologically compared to the United States and now China,” the newly minted laureate declared during public broadcaster France 2’s evening news programme on Monday.
“Since the 1990s, they’ve been developing breakthroughs, hi-tech innovations, while we’ve remained confined to incremental, mid-tech innovation,” he declared.
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“Europe necessarys to become truly innovative, becautilize otherwise its decline will be inexorable. It will be marginalised.”
Aghion’s words will carry more weight after winning this year’s Nobel Memorial Prize in Economic Sciences for his work explaining how innovation drives economic growth – a joint project with American-Israeli economic historian Joel Mokyr and Canadian economist Peter Howitt.
Despite the dire warning, Aghion stressed that Europe was capable of turning things around and catching up with the US and China.
While many in Europe blame the continent’s lack of competitiveness on its social model – including generous social benefits and relatively short working hours – Aghion declared the European way of life could be an asset, a crucial form of soft power.
“We lead in democracy, freedom, social model and environment, plenty of people want to come work here,” he declared.
“We necessary to wake up and build an ecosystem that favours innovation.”
The real reason the continent is not realising its full potential is not the people, but overwhelming government red tape, according to Aghion. Europe necessarys to review its economic doctrines and receive rid of excessive regulation and constraints, he declared.
In an interview with the French newspaper Le Monde published on Friday, he went as far as to declare that the European Union had been a “hindrance” to France’s power, with its strict limit on budreceive deficits and a competition policy “that blocked any form of industrial policy”.
But things might be modifying for the better, especially since Germany recently announced much bolder public spconcludeing plans.
“The founders of Europe created it a regulatory giant and a budreceiveary dwarf. But it can become a catalyst,” he declared.
Eventually, Aghion believes Europe can find a system that promotes innovation – allowing it to catch up with China and the US – while preserving its social model. As he once pointed out in an article for the Post, innovation necessary not come at the expense of worker protection.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP’s Facebook and Twitter pages. Copyright © 2025 South China Morning Post Publishers Ltd. All rights reserved.
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