Fixing the EU’s productivity, innovation, and competitiveness crisis requires a fundamental political reorientation. Until it makes that shift, expect more reports, more tinkering, and more decline.
Even from here in Taiwan, the view is concerning if one is focused on the Europe economy. With the U.S. and Taiwan completing a tariff deal this year, wherein Taiwan was given a very favorable rate of 15% - something I expected would happen all along and despite what many here feared every time they heard President Trump accuse Taiwan of “stealing” America’s chip industry - one could hear the sighs of relief around the boardrooms in Taiwan as it was clear their plans to open new plants and AI data centers in America could now proceed.
The same has not taken place for Europe, however. While it is fairly common to read in the news and company announcements that Taiwan’s major server ODMs are increasing their capex and building new servers for their clients in the U.S., we seldom see them announcing similar plans for Europe. Add that to problems in Europe’s auto market, and tech and industrial investments in America by Taiwan - a major technology island - could soon prove to be lopsided compared to what is being attracted to Europe, unless policymakers there get more serious and heed the recommendations made by Mario Draghi. And even those recommendations, as you correctly suggest, are not enough.
In addition to defense issues stemming from a weakening alliance with the USA, Europe faces an eroding industrial base due to the rise of China. To counter it, they may concentrate on sustaining and migrating the innovation epicenter of target products.
Thanks as always, Robert.
Even from here in Taiwan, the view is concerning if one is focused on the Europe economy. With the U.S. and Taiwan completing a tariff deal this year, wherein Taiwan was given a very favorable rate of 15% - something I expected would happen all along and despite what many here feared every time they heard President Trump accuse Taiwan of “stealing” America’s chip industry - one could hear the sighs of relief around the boardrooms in Taiwan as it was clear their plans to open new plants and AI data centers in America could now proceed.
The same has not taken place for Europe, however. While it is fairly common to read in the news and company announcements that Taiwan’s major server ODMs are increasing their capex and building new servers for their clients in the U.S., we seldom see them announcing similar plans for Europe. Add that to problems in Europe’s auto market, and tech and industrial investments in America by Taiwan - a major technology island - could soon prove to be lopsided compared to what is being attracted to Europe, unless policymakers there get more serious and heed the recommendations made by Mario Draghi. And even those recommendations, as you correctly suggest, are not enough.
Good points. They know what to do but can’t muster their will to do it
In addition to defense issues stemming from a weakening alliance with the USA, Europe faces an eroding industrial base due to the rise of China. To counter it, they may concentrate on sustaining and migrating the innovation epicenter of target products.