Shortly after being honored with this year's Nobel Prize in Economics, French economist Philippe Aghion issued a strong warning to Europe, saying that the continent is losing in the technology race with China and the US.
" Europe needs to wake up. We are technologically lagging behind the US and now China," the new Nobel Prize winner told France 2's evening news program.
He explained more clearly about the problem in Europe: "Since the 1990s, the US and China have continuously created breakthroughs and high-tech innovations, while we are limited to increasing innovations, at the level of average technology."
" Europe needs to become truly creative, because otherwise, its decline is inevitable. This location will be pushed to the edge," he warned.
Mr. Aghion's words took on more weight after he and two other economists won the Nobel Prize in Economics for their explanation of promoting economic growth based on innovation. Despite the serious warning, Mr. Aghion stressed that Europe is fully capable of turning the situation around and catching up with the US and China.
Many in Europe believe the continents lack of competitiveness is due to the social model which includes generous social benefits and relatively short working hours. However, Mr. Aghion believes that the European lifestyle can be an asset, an important form of soft power.
According to Mr. Aghion, the real reason for Europe's failure to fully exploit its potential is not people, but the cumbersome administrative apparatus. He said Europe needed to review its economic policies and remove excessive regulations and constraints.
In an interview with Le Monde, Mr. Aghion stated that the European Union (EU) itself was once an "obstacle" for France. According to him, EU regulations both tighten public spending through budget deficit limits and use competition policies to hinder France's development of key industries.
Mr. Aghion also expressed optimism that this trend could change, especially since Germany recently announced bold spending plans. He said that Europe has always been strong in promulgating laws but weak in general spending budgets. However, he believes that Europe could now become a "catalyst" to boost growth.
In the end, Mr. Aghion believes that Europe can find a balanced path: both creative enough to compete fairly with the US and China, while maintaining its own unique social values.
