Your Sclerotic European Economy

Is doomed to be overtaken by the tech-fuelled surgeosity of US vitality, right?

Well, perhaps. Where would you decide to put a factory for the mass-production of Li-Ion batteries, the key technology in getting oil out of cars? California? China? Brazil? Try France: that’s what Johnson Controls is doing. Or how about launching 150kg satellites into LEO within the hour?

4 thoughts on “Your Sclerotic European Economy

  1. OK, OK, but do you have to engage in the snark every time a factory opens its doors in Europe? Are we really so juvenile that we feel justified in launching a bombastic jingoistic tirade just because a company does something new in the richest region of the world?

    Europe has been a hegemonic power globally for centuries. It’s accumulated capital (including human capital) and infrastructure for all that time, and naturally it’s not going to go away. China has its advantages too, and so do different regulatory regimes in the USA. But these are actually quite subtle; if there were really drastic differences, then only North Korean-style autarky would prevent them from being arbitraged away. In some cases, the low wages of China are going to lure FDI, and in other cases the high marginal revenue product of labor in Europe will.

    I’m not sure where Brazil fits in.

  2. Do these new plants balance out how many jobs in the telecom industry have been transplanted from Germany in the last five years?

  3. One point to remember in this everlasting horse race is that a lot of the high tech industries are notoriously bad neighbors. The telecom/information technology (TCIT) industry that blossomed in Santa Clara Co., California, enjoyed immense spillovers from government-sponsored universities. The industry brought in a huge amount of money, but this was mostly in the form of destructive urban sprawl and corporate parks; at the other end of the income scale, the line workers in the semiconductor fabrication plants were treated execrably and the fabs themselves–hotly coveted by legislatures–are miniature Chernobyls; after the high tech industry superseded them with new ones in places like Ireland or Malaysia, the local governments were forced to clean up or face reprisal. I’m not sure how the governments in Ireland and Malaysia are faring now, but it’s pretty disgusting at how they tend to whiplash their hosts about.

    See “ Ireland withdraws grants for €1.6bn Intel fab” (The Register).

  4. Here’s the ultimate horse race:

    William H. Frey, an analyst for the Brookings Institution think tank, predicts the median age in Europe will increase from 37.7 years old in 2003 to 52.3 years old by 2050 while the median age of Americans will rise to only 35.4 years old.

    (Just leave the decisions to the soon to be “elected” EU president. Forty-two years is a lifetime away anyway!).

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