According to a report presented in 2024 by the former head of the European Central Bank and minister-of-all-trades in Italy, Mario Draghi, the EU Member States and the EU institutions need to raise their ambition, invest on a larger scale, implement reforms faster, and increase their coordination regarding cross-border cooperation. In the report, he noted, “The US acts as one country; Europe often behaves like 27.”
He further compares Europe’s performance with that of the USA, pointing out that “no EU company with a market-capitalization over EUR 100 billion has been created from scratch in the last 50 years, while all six US companies with valuations above EUR 1 trillion were created in that period.”
Mr Draghi hits the nail on the head in telling EU leaders that they will have to develop concrete programmes and do more than simply teach the world to sing in perfect harmony.
There are cultural differences, however, that separate the EU from the USA. For example, the American’s fierce individualism: the ethos that emphasises personal freedom (meaning freedom from interference), self-reliance, and success through individual effort (the so-called “American Way”).
One apocryphal story that best illustrates the difference in business mentality between the Americans and Europeans involves a shoe company. It wanted to expand its markets and open up a sales facility in Africa. In order to gauge this market, its director sent a European salesman and an American salesman. When they arrived in Africa, they noticed very few people were wearing shoes. After two weeks and visits to several countries, they returned to the Director with their reports. The European salesman said, “There is no market there. Practically no one wears shoes.” The American said, “What a market. Practically no one wears shoes!”
The crucial question is: How do we shift a mentality away from resignation to leveraging opportunity? There is no need to imitate the United States. The EU can maintain its identity and still draw lessons from American success stories. Here are several concrete recommendations the EU should consider:
1. Deepen the Single Market
The US has a truly unified domestic market—capital, data, and labour move seamlessly across states. By contrast, the EU Single Market is still fragmented, especially in digital services, capital markets, and energy. To overcome this disadvantage, the EU should complete the capital markets union to improve access to venture capital and private equity for start-ups and small companies. In addition, it should quickly establish a Digital Single Market, reducing regulatory fragmentation in data flows, cloud computing, and AI governance. Finally, the EU must harmonize rules for cross-border business formation, taxation, and insolvency.
2. Boost Innovation through Scale and Incentives
US innovation thrives on a strong venture capital ecosystem, flexible labour markets, and strong links between research and corporations. By comparison, attempts at innovation in the EU are often trapped in academia or small-scale pilot projects due to risk aversion and limited private investment. A good way to approach the innovation question would be the creation of an EU-wide innovation agency with flexible, simplified funding for high-risk, high-reward technologies, coupled with an expansion of the European Innovation Council (EIC). To incentivise the process, the EU should offer innovation tax credits and stock option reforms to make start-ups more attractive to talent and investors.
3. Strengthen Strategic Industries and Energy Independence
The US used the CHIPS and Science Act and Inflation Reduction Act (IRA) to build domestic capacity in semiconductors, green energy, and advanced manufacturing. Europe faces slower permitting, higher energy costs, and smaller fiscal capacity. To catch up, the EU should launch a coordinated, simplified funding programme to scale clean tech, semiconductors, and AI manufacturing. Simultaneously, it should streamline permit procedures for renewables and industrial projects and develop joint energy procurement mechanisms.
4. Encourage Risk-taking
The US celebrates failure as part of its business culture; bankruptcy laws and social norms allow for second chances. Europe faces countless cultural and legal barriers to failure, which discourages entrepreneurship. A way to change the risk-averse mindset is by reforming bankruptcy laws to make business recovery easier. The EU should also promote entrepreneurial education and incubators at universities, and reduce the administrative burden for start-ups (fewer licenses, faster registration).
5. Invest in Human Capital and Talent Mobility
The US attracts global talent through universities, flexible immigration policies, and competitive pay. Conversely, Europe’s talent pool is aging and constrained by slow mobility and bureaucratic immigration systems. To compete, the EU should create an EU Talent Visa for high-skilled workers, similar to the US H-1B visa. Internally, it could deepen education-industry partnerships for reskilling in AI, green tech, and engineering, and encourage labour mobility across member states by simplifying recognition of qualifications and social benefits portability.
6. Create Regions of Excellence
US innovation clusters like Silicon Valley, Austin, and Boston thrive through local autonomy and strong university–industry ties. In the EU, innovation is geographically uneven and overly dependent on national programmes. Instrumental steps can be taken to organise an EU-wide programme by supporting regional innovation clusters with flexible funding, governance, and promoting public-private partnerships at the regional level. By using EU structural funds, successful clusters can scale up rather than spread money thinly across regions. One successful example is the university in Leuven, Belgium (the KUL) and the spinoffs it has helped create.
7. Strengthen Fiscal Flexibility and Coordination
US fiscal transfers between federal and state levels support investment in poorer regions and national priorities. EU fiscal rules limit investment in growth-enhancing sectors. By revising EU fiscal rules, it would allow for green and digital investments. If it expands joint borrowing, instruments like NextGenerationEU could fund strategic projects. In order to avoid internal subsidy competition among Member States, the EU should coordinate industrial subsidies.
Can Europe change some of its attitudes and approaches to the economy, become more open, entrepreneurial, and more willing to take risks? Facing the pressures of geopolitical and economic changes, Europe cannot play it safe. It has to advance with a triathlete’s zeal. It has to find the rhythm of ambition, where risk is a virtue and success a personal victory.