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Donald Trump's national security strategy offers a flawed view of Europe. The document asserts that open-border policies and so-called "progressive" agendas pose an grave risk to the continent's identity. Yet, this perspective is based on a serious misinterpretation of the reality. The true danger facing the EU is not societal but technological and economic backwardness.

A Glaring Economic Divide Between Europe and the US

The data reveal a sobering contrast. From 2008 and 2023, US GDP surged by eighty-seven percent, while a paltry thirteen and a half percent increase for the EU. Over this period, European income per person fell from over three-quarters to just 50% of the American figure. Remarkably, even Mississippi now boasts a greater average income than major EU nations like France and Italy.

Today, roughly 50% of the world’s 50 largest tech companies are American, while a mere four are European.

The Technological Shortfall: A Critical Problem

This widening economic gap is driven by stronger efficiency gains in the US, fueled by breakthroughs and better use of resources. The scene of world technology leadership is overwhelmingly American. In the last fifty years, 241 US firms have scaled into companies valued at more than ten billion dollars, compared with only fourteen in Europe.

This disparity prompts a pressing question: As the competition for tomorrow's sectors like semiconductors, AI, and fusion energy, where does the EU positioned? Most analysts agree it is largely a two-horse race between the United States and China, with European nations starting at a significant disadvantage.

Underlying Factors of Europe's Technological Lag

A number of major factors account for this technological divide.

• Financing Ecosystem: The United States has a far deeper and more dynamic network for financing new ventures. The EU has yet to establish a genuine unified investment market, which caps the growth potential of emerging companies.
• Bureaucratic Hurdles: Excessive and fragmented rules hinder European business. A US startup can launch a product under a single regulatory framework to access a consumer base of hundreds of millions. The EU, despite a bigger population size, is divided among twenty-seven separate systems, creating huge market obstacles.
• Cultural Attitudes: Attitudes toward risk-taking vary greatly. In some EU nations, a startup's collapse was once met with penalties, whereas in the United States, it is often seen as a valuable lesson.
• Military Investment: The United States enjoys a tightly woven academic-military-industrial complex. Europe's chronic underinvestment in defense has weakened its capacity for pioneering research.

The Road Ahead: Grounds for Hopefulness

Despite these challenges, there are causes for hope. Policymakers are increasingly aware of the severe threat and have begun to propose serious reform. Key reports on European competitiveness and the internal market point to the necessity of sweeping reforms.

Given appropriate policies and rule changes, these assets could support much higher degrees of business-led breakthroughs.

The continent retains significant advantages: skilled workforce, top-tier education systems, and world-class research institutions. Coupled with a large internal market and substantial household savings, these foundations could unleash a surge of venture creation.

Crucially, even if Europe does not become the leader in creating next-generation technologies, it can still significantly increase economic output by adopting and adapting innovations from other regions.

An Inflection Point

The European Union now faces a decisive crossroads. As the saying goes, decline often happens "gradually and then suddenly". To date, Europe's technological decline has been steady. But, without bold steps to address its deep-seated problems, today's gradual weakening could turn into a sudden and irreversible decline in global economic relevance.