Innovation: where Europe is stronger than China – economy

Germany is a pro-European country. According to the Eurobarometer survey, 79% of Germans consider joining the European Union to be a good thing. After Ireland, Luxembourg and the Netherlands, it is the fourth highest value in the EU. Nevertheless, one gets the impression that the German relationship with Europe is sometimes a little cerebral. In domestic political discourse, two narratives dominate why the process of European integration is so important to us: the EU as a guarantee of peace in Europe and as a guarantee that Germany can continue to play an important role in the concert of big. Unfortunately, now, 64 years after the signing of the Treaty of Rome, the two stories have little impact. Fortunately, no reasonable person can now imagine a war between France and Germany. And the idea of ​​a great power Europe, apart from pragmatic considerations in favor of closer coordination of European foreign policy, is rightly meeting with skepticism.

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Paul Hünermund is Assistant Professor at the Institute for Strategy and Innovation at Copenhagen Business School. Before that he worked at ZEW in Mannheim and did his doctorate at KU Leuven in Belgium.

(Photo: oh)

For many people, Europe has a very practical meaning. The EU allows students to study at top foreign universities – and in many cases for free. Employees find employment in neighboring European countries which is sometimes barely available in their country of origin. The harmonization of legal framework conditions and the dismantling of entry barriers make it easier for young entrepreneurs to access markets abroad. Scientists benefit from the exchange with their international colleagues, for example within the framework of joint projects funded by the European Commission research framework programs. And an integrated European capital market lays the foundation for funding the best ideas and the brightest minds.

Economic Research Papers: Innovations and the resulting increases in productivity occur geographically in a very concentrated manner. Scientific and technological sites such as Munich, Barcelona, ​​Vilnius, Copenhagen or Milan create an economic dynamic that goes far beyond regional borders and is essential for the growth and prosperity of an economy. Due to this concentric effect, however, a high degree of labor mobility is required so that well-trained specialists and the most productive employers can come together in the best possible way. This aspect is much more pronounced in the United States, for example, than in Germany. It is common for employees to move across national borders more frequently due to better vacancies, which of course is also reflected in the wages that can be achieved.

The resources available to Europe should not be underestimated for a modern knowledge-based economy. Creative ideas are more likely to arise when people with different backgrounds, experiences and perspectives come together. Europe has a multitude of urban centers with very different and historically developed political and educational institutions. The motto of the European Union is “United in diversity”. If Europe managed to mobilize its enormous intellectual and cultural diversity even more strongly in the future, that would be a huge geographical advantage, also compared to the United States and China.

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View of the University of Milan: Because of Corona, it is currently more empty than usual, knowledge is still being produced there.

(Photo: Antonio Calanni / AP)

However, the European Union is still far from the utopia of an economic and working space without limits. Language barriers and the slow internationalization of companies and administrations make it difficult for employees to accept suitable job offers abroad. There is no uniform system for funding university places, which leads to ineffective quota regulation, as domestic taxpayers often show little interest in paying for international students. When today’s generation of expatriates retires, they will have to struggle to collect their pension rights in different countries with different social and tax systems. Even for start-ups, expansion into other European countries continues to come with huge costs, reducing the growth potential and scalability of innovative business models. The economic damage caused by a lack of cooperation across national borders and a lack of concepts for common health protection were not least highlighted by the corona pandemic.

Europe is the source of future prosperity. However, it doesn’t bubble for free

Apart from the usual Sunday speeches, questions of European politics are surprisingly under-represented in the German domestic debate. In the current election campaign, too, the question of how we imagine the future of the European Union is once again only a marginal question. Europe has long been part of the daily life of many Germans. For these people, European integration is not an abstract political historical process.

The specific course set by the policy will largely determine how the mobility of workers, inventors and scientists within the EU, so important for growth and innovation, will develop in the years to come. Europe will increasingly become the source of our prosperity. Anyone who doesn’t understand this is not preparing the country enough for the future.

However, this prosperity is not free. An ever closer political union inevitably goes hand in hand with the transfer of sovereign rights. In order for the European Parliament to have real room for maneuver, it must also be given appropriate fiscal sovereignty. A monetary policy decided in Frankfurt for the entire euro zone cannot focus solely on German interests. And transfer payments between regions with different economic capacities are inevitable in a common currency and economic space. Moving the process of European integration forward is not an easy undertaking and requires some patience and fierce negotiation. Small steps are allowed as long as they are taken continuously. Appreciating the EU only rhetorically, but not strengthening it practically, cannot be the motto of European politics.

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