”Growth in the euro area has been, despite the strong third quarter, sluggish for some time now. The lackluster growth performance is even more visible on the backdrop of the robust growth seen in the US. There is not the one factor that can explain the euro area’s slow growth and underperformance vis-à-vis the US. Rather, this underperformance is the result of several adverse developments, some more cyclical in nature while others reflect structural weaknesses of the euro area economy. We focus in this report on the slowdown of productivity growth and the role the Information and Communications Technologies sector and the innovation system in Europe has played in all this. A first important difference is that the adaptation of information technology has been much slower in Europe than in the US. Europe also lacks a thriving ICT sector that, by its sheer size and profitability, is a significant driver of productivity growth in the US.”
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Morten W. Langer
