{"id":100126,"date":"2024-09-27T06:00:00","date_gmt":"2024-09-27T04:00:00","guid":{"rendered":"https:\/\/www.futuribles.com\/sur-le-decrochage-economique-europe-etats-unis\/"},"modified":"2025-01-29T13:57:55","modified_gmt":"2025-01-29T12:57:55","slug":"sur-le-decrochage-economique-europe-etats-unis","status":"publish","type":"post","link":"https:\/\/www.futuribles.com\/en\/sur-le-decrochage-economique-europe-etats-unis\/","title":{"rendered":"On the economic stall between Europe and the United States"},"content":{"rendered":"
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The hypothesis that Europe\u2019s economy is falling behind that of the United States (US) has become a key topic in economic and media debate in recent months. S\u00e9bastien Bock and his co-authors (from OFCE) recently published a note[1]<\/a><\/sup><\/strong> providing valuable background information on this subject. It covers the period 2000-2019. The more recent years marked by the health crisis and the energy crisis are not covered here, but they confirm the gap: at the end of 2023, the level of gross domestic product (GDP) in the United States will exceed that of 2019 by just over 9 points, compared with just 3.2 points in the eurozone (while Germany is stagnating).<\/h6>\n\n\n\n

The slowdown in European economic growth began before these shocks, indicating longer-standing structural factors. GDP per capita <\/em>in the eurozone, expressed in constant dollars and purchasing power parity, grew by an average of 0.9% a year over the period studied, a rate lower than in the United States. The GDP per capita<\/em> in the eurozone represented 77% of the one in the US in 2000, compared with 72% in 2019 (and 70.6% in 2022). It should be noted that the differential with the US has remained stable at 68% in the 27-member European Union (EU) (growth of 1.2% per year). China\u2019s GDP per capita <\/em>has increased fivefold over this period, but in 2019 will be only 40% of that of the EU. At national level, the picture is mixed. Germany\u2019s GDP per capita <\/em>relative to that of the United States rose slightly to a peak of almost 85% in the early 2010s, before falling to 82% in 2019. Italy has seen a steady decline from over 80% to 65%. France\u2019s trajectory is similar to that of the eurozone.<\/p>\n\n\n

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\n Relative level of GDP per capita <\/em>in France, Germany, Italy and Spain compared with the United States (base 100)\n <\/p>\n <\/div>\n

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Source: <\/em>Bock<\/span> S\u00e9bastien et alii, <\/em>op. cit<\/em><\/a>, p. 5.<\/p>\n\n <\/div>\n\n\n\n

The economic and financial crisis of 2008 marked a turning point, with European economies unable to rebound as quickly and strongly as their American counterparts, facing a depression exacerbated by the sovereign debt crisis. So in their paper, the authors ask is it \u201cex ante <\/em>fragility (institutional and\/or economic) that is preventing the rebound, an inability to fully embrace the digital economy that has driven growth over the past 10 years, or […] greater vulnerability to emerging players, notably China, that is hampering the European export engine that had previously been its strength?\u201d. To shed light on this question, they analyse trends in indicators linked to the factors of production: changes in worktime, labour productivity and capital investment, both tangible and intangible (software, patents etc.).<\/p>\n\n\n<\/div>\n

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A widening gap in hourly labour productivity<\/h2>\n

From an accounting point of view, the increase in GDP per capita <\/em>can be explained either by an increase in hourly labour productivity or by an increase in the number of hours worked per capita.<\/p>\n

Contrary to popular belief, working time per capita <\/em>is falling in the United States (down 0.3 percentage point), while it is stable in Europe. In fact, the average working time is falling in both regions, but the more marked ageing of the population in Europe is clearly offset by the rise in the activity rate among the population of working age (+0.5 point in the eurozone compared with -0.2 point in the United States) \u2014 an indicator in which France stands out from its neighbours with more moderate growth (+0.2 point).[2]<\/a><\/sup> The contribution of the unemployment rate to growth in GDP per capita <\/em>is low over the period, except in Germany where the Hartz reforms of the 2000s increased the number of people in work.<\/p>\n

However, it is the trend in hourly labour productivity that largely explains the trend in growth in per capita <\/em>income, both in the United States (+1.5 point) and in the eurozone (+0.8 point), and hence the European stall over the period. In particular, Italy\u2019s productivity gains are virtually nil. Readers should keep in mind that the slowdown in productivity gains over the last few decades is a major trend affecting all developed countries.<\/p>\n\n <\/div>\n

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\n Voir aussi<\/span>\n
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\n \n \"\"<\/a>\n <\/span>\n \n Thoughts on Productivity: What Prospects After the Pandemic and the War in Ukraine?<\/a>\n \n \n \n <\/use>\n<\/svg>\n <\/a>\n <\/span>\n
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27 June 2022<\/div>\n CETTE Gilbert<\/a>\n BERGEAUD Antonin<\/a>\n LECAT R\u00e9my<\/a>\n
\n 13 p.\n <\/div>\n <\/div>\n\n
\n \n \n <\/use>\n<\/svg>\n\n Article Revue\n <\/a>\n Economics<\/a>\n <\/div>\n <\/div>\n<\/div>\n <\/div>\n <\/div>\n <\/div>\n<\/div>\n
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Europe is falling further and further behind in terms of physical capital, particularly ICT equipment<\/h2>\n

Investment in equipment enables a company to increase its production capacity or improve the efficiency of existing equipment. It is one of the determinants of economic growth and productivity gains. The rate of investment (expressed as a proportion of value added) has followed a similar pattern in the United States and the eurozone over the period 2000-2019. Initially around 15%, it fell following the bursting of the internet bubble and the financial crisis, to stabilise at around 13%. However, the breakdown of this investment by type of asset varies markedly between the two regions and within European countries. The difference in investment in information and communication technology (ICT) equipment is significant (15% of the total in the United States, compared with 6.6% in the eurozone).<\/p>\n

Relating material investment to the number of jobs gives a better idea of the volumes involved. This indicator highlights a marked gap between the two regions after 2008: the difference in material investment per job tripled in a decade. While investment levels in the US returned to pre-crisis levels in 2011, this was not the case in the eurozone until 2019. While all types of asset are affected by this drop in European investment, investment in the ICT sector has become five times lower in 2019, whereas it was relatively close in the early 2000s.<\/p>\n

This European lag is reflected in similar trends in the stock of tangible capital. Capital intensity per job in the eurozone is 76% of that in the United States. According to the authors, de-industrialisation is not an explanatory factor: while industry is certainly more intensive in material capital than the service sector, the share of this sector in GDP has fallen similarly in the two regions, to reach almost 10% today.<\/p>\n\n <\/div>\n

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\n Voir aussi<\/span>\n
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\n \n \"\"<\/a>\n <\/span>\n \n L\u2019Acc\u00e9l\u00e9ration de l\u2019histoire<\/a>\n \n \n \n <\/use>\n<\/svg>\n <\/a>\n <\/span>\n
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10 April 2024<\/div>\n PAGLIA Morgan<\/a>\n
\n 4 min.\n <\/div>\n <\/div>\n\n
\n \n \n <\/use>\n<\/svg>\n\n Read, Seen, Heard\n <\/a>\n Geopolitics<\/a>\n <\/div>\n <\/div>\n<\/div>\n <\/div>\n <\/div>\n <\/div>\n<\/div>\n
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\n \n <\/p>\n

\n Equipment investment as a percentage of value added, by country from 2000 to 2019 (in %)\n <\/p>\n <\/div>\n

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N.B.: <\/em>authors\u2019 calculations. Total market sector. Physical investment is defined as the sum of nominal investment in machinery and equipment, transport equipment and ICT, but excludes residential investment and arable land. Calculations are based on value data.
\nSource: <\/em>Bock<\/span> S\u00e9bastien et alii, <\/em>op. cit<\/em><\/a>, p. 9.<\/p>\n\n <\/div>\n\n\n<\/div>\n

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Stronger accumulation of intangible capital in the United States<\/h2>\n

Investment in intangible capital is an increasingly important factor in the growth of today\u2019s economies. They enable the accumulation of knowledge, fostering innovation, technical progress and its appropriation, and therefore productivity gains.<\/p>\n

Some of these intangible investments are captured by national accounts: research and development (R&D), software, databases and other intellectual property rights (mining exploration rights, artistic works etc.). Other investments that could contribute to production gains are not, but work by economists provides estimates of<\/a> their value (professional training, financial and design innovations, advertising, marketing, organisational innovations).<\/p>\n

Whether or not all these investments are taken into account, intangible capital in the eurozone represents only 35% of that in the United States, an even greater drop than for tangible capital (53%). Investment in intangible capital per job was three times higher in the United States than in the eurozone in 2019. This gap is driven by a higher rate of investment in intangible capital in the United States than in the eurozone (22% of value added in 2019 compared with 14%). France stands out from its neighbours with an investment rate similar to that of the United States.<\/p>\n

Growth in intangible investment was 41% in the eurozone over the period 2000-2019, compared with 62% in the United States. The graph below breaks down this growth by type of asset. It clearly shows Italy\u2019s marked fall, France\u2019s good performance, and Spain\u2019s catching up. Organisation expenditure is the main driver of growth in investment in intangible capital in the United States, while training expenditure is growing less rapidly. France, which has benefited less from the growth of the digital sector after deindustrialisation, has seen a smaller increase in its R&D investment than the United States and the rest of the eurozone.<\/p>\n\n <\/div>\n

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\n Voir aussi<\/span>\n
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\n \n \"\"<\/a>\n <\/span>\n \n Et si la tech pouvait sauver le monde<\/a>\n \n \n \n <\/use>\n<\/svg>\n <\/a>\n <\/span>\n
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23 September 2024<\/div>\n SOUPIZET Jean-Fran\u00e7ois<\/a>\n
\n 3 min.\n <\/div>\n <\/div>\n\n
\n \n \n <\/use>\n<\/svg>\n\n Read, Seen, Heard\n <\/a>\n Economics<\/a>\n Science and Technology<\/a>\n Society<\/a>\n <\/div>\n <\/div>\n<\/div>\n <\/div>\n <\/div>\n <\/div>\n<\/div>\n
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\n Structure of 2000-2019 growth in intangible investment per asset, by zone\/country\n <\/p>\n <\/div>\n

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Interpretation: <\/em>the average annual growth rate in intangible investment was 41% in the euro zone (EUZ) and 62% in the United States (USA). France increased its intangible investment by 51%, of which 15 percentage points in software and databases. Authors\u2019 calculations.
\nSource: <\/em>Bock<\/span> S\u00e9bastien et alii, <\/em>op. cit<\/em><\/a>, p. 15.<\/p>\n\n <\/div>\n\n\n<\/div>\n

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The United States leads the way in R&D, with strong growth in Chinese innovation<\/h2>\n

Finally, the OFCE authors conclude their note with a more specific analysis of R&D spending. By 2019, the EU had invested \u20ac312 billion (87% of which in the eurozone). This represents almost half the investment of the United States, which exceeds that of the EU and China combined. France invests twice as much as Italy, but half as much as Germany (\u20ac110 billion), whose R&D effort is ahead of France\u2019s (3.2% compared with 2.2%).<\/p>\n

If we focus solely on private sector investment, the US R&D effort reached 2.38% in 2019. Over the period, this effort increased more than in China, and more in China than in the EU. The public R&D effort in the EU (0.8% of GDP) was higher in 2019 than in the other regions. However, the 1% target set by the Lisbon European Council in 2000 had still not been reached, and neither had the 2% target for private R&D. This represents a gap of 90 to 100 billion euros per year.<\/p>\n

The authors identify China as the main threat to the R&D gap over the next few years. The number of Chinese patent applications has been growing exponentially since the 2000s, and by 2020 it will have surpassed the level in the United States and Europe, where growth in the number of patents granted is tending to slow.<\/p>\n\n <\/div>\n

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\n Voir aussi<\/span>\n
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\n \n \"\"<\/a>\n <\/span>\n \n Disruptive Innovation: France in Global Competition<\/a>\n \n \n \n <\/use>\n<\/svg>\n <\/a>\n <\/span>\n
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26 February 2024<\/div>\n PAPON Pierre<\/a>\n
\n 8 p.\n <\/div>\n <\/div>\n\n
\n \n \n <\/use>\n<\/svg>\n\n Journal Article\n <\/a>\n Economics<\/a>\n Science and Technology<\/a>\n <\/div>\n <\/div>\n<\/div>\n <\/div>\n <\/div>\n <\/div>\n<\/div>\n
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Conclusion<\/h2>\n

This OFCE analysis is useful for gaining a better understanding of trends in US and European growth over the last two decades, from the point of view of production factors. It is hourly labour productivity that mainly explains Europe\u2019s lag behind the United States, and more specifically the levels of investment in tangible and intangible capital. The authors believe that the European lag is not due to a more pronounced positioning of production capacity in low-productivity sectors (excluding ICTs, for example), but rather to weak growth in productivity gains within sectors.<\/p>\n

Current investments will drive innovation in the digital sector over the next few years. In view of the accumulated lag, the authors of the report are concerned about the future prospects for Europe: \u201cThe evidence of divergences in the dynamics of capital accumulation required for the digital economy over the next 20 years raises questions about the resilience and rebound capacity of the eurozone, and its ability to support its environmental ambitions\u201d (p.\u00a020). The return of policies to support strategic investment in the United States (Inflation Reduction Act), at a time when the energy crisis was hitting Europe, could exacerbate this setback.<\/p>\n

It is important to remember that this analysis concerns growth dynamics over the period 2000-2019. A comparison in levels indicates a different contribution from the factors. A few years ago, in Futuribles<\/em>, Gilbert Cette, Antonin Bergeaud and R\u00e9my Lecat compared<\/a> the GDP per capita <\/em>of the eurozone and the United States in 2015. In their analysis, capital intensity did not contribute to the European gap, but working hours and the employment rate accounted for half of it.<\/p>\n\n <\/div>\n

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\n Voir aussi<\/span>\n
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\n \n \"\"<\/a>\n <\/span>\n \n Economic Prospects for the United States<\/a>\n \n \n \n <\/use>\n<\/svg>\n <\/a>\n <\/span>\n
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26 August 2024<\/div>\n BOU\u00cbT Antoine<\/a>\n
\n 18 p.\n <\/div>\n <\/div>\n\n
\n \n \n <\/use>\n<\/svg>\n\n Journal Article\n <\/a>\n Economics<\/a>\n Geopolitics<\/a>\n <\/div>\n <\/div>\n<\/div>\n <\/div>\n <\/div>\n <\/div>\n<\/div>\n
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\n Accounting structure of the GDP per capita <\/em>gap with the United States in 2015 (in % and points)\n <\/p>\n <\/div>\n

\n \"\"\n <\/div>\n <\/div>\n<\/div>\n
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Source: <\/em>Cette<\/span> Gilbert, Bergeaud<\/span> Antonin and Lecat<\/span> R\u00e9my, \u201cCroissance \u00e9conomique et productivit\u00e9. Un regard sur longue p\u00e9riode dans les principales \u00e9conomies d\u00e9velopp\u00e9es<\/a>\u201d, Futuribles, <\/em>no.\u00a0417, March-April 2017, p. 38.<\/p>\n\n <\/div>\n\n\n\n

Si le d\u00e9crochage de la croissance \u00e9conomique europ\u00e9enne par rapport aux \u00c9tats-Unis est donc bien une r\u00e9alit\u00e9, sa mise \u00e0 l\u2019agenda n\u2019est pas neutre. Il conviendra, pour les d\u00e9cideurs europ\u00e9ens, de tenter de rem\u00e9dier \u00e0 ses causes, tout en gardant en t\u00eate des questions aussi fondamentales que la nature et la r\u00e9partition de la valeur \u00e9conomique cr\u00e9\u00e9e au sein de l\u2019Union, ou la fa\u00e7on dont elle peut r\u00e9pondre aux aspirations collectives face aux grands d\u00e9fis de ce si\u00e8cle. Le changement climatique sera le premier d\u2019entre eux, porteur de nouvelles contraintes \u00e0 la croissance auxquelles aucune des deux rives de l\u2019Atlantique n\u2019\u00e9chappera.<\/p>\n\n\n\n

The fact that Europe\u2019s economic growth is falling behind that of the United States is a reality, but putting it on the political agenda is not neutral. European decision-makers will have to try to remedy its causes, while keeping in mind questions as fundamental as the nature and distribution of the economic value created within the Union, and the way in which it can respond to collective aspirations in the face of the major challenges of this century. Climate change will be the first of these, bringing new constraints on growth that neither side of the Atlantic can avoid.<\/p>\n\n\n\n

\u2014\u2014\u2014\u2014\u2014\u2014\u2013
N.B.: <\/em>this article has been translated from French by DeepL, and revised by the author and Futuribles.<\/span><\/p>\n\n\n

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  1. \n

    Bock<\/span> S\u00e9bastien et alii, <\/em>\u201cLe d\u00e9crochage europ\u00e9en en question<\/a>\u201d, OFCE Policy Brief, <\/em>no.\u00a0128, 16 May 2024, 22 p., OFCE (Observatoire fran\u00e7ais des conjonctures \u00e9conomiques). \u2191<\/a><\/p>\n<\/li>\n

  2. \n

    The number of hours worked per capita<\/em> is the product of the proportion of the population that works (determined by demographics and the labour market) and the intensity of work (average number of hours worked per job). \u2191<\/a><\/p>\n<\/li>\n<\/ol><\/div>","protected":false},"excerpt":{"rendered":"

    The hypothesis that Europe\u2019s economy is falling behind that of the United States (US) has become a key topic in economic and media debate in recent months. S\u00e9bastien Bock and his co-authors (from OFCE) recently published a note[1] providing valuable background information on this subject. It covers the period 2000-2019. The more recent years marked … Continued<\/a><\/p>\n","protected":false},"author":25,"featured_media":97717,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_seopress_titles_title":"","_seopress_titles_desc":"","_seopress_robots_index":"","_seopress_robots_follow":"","_seopress_robots_imageindex":"","_seopress_robots_snippet":"","_seopress_robots_primary_cat":"none","_seopress_robots_breadcrumbs":"","_seopress_robots_freeze_modified_date":"","_seopress_robots_custom_modified_date":"","_seopress_robots_canonical":"","_seopress_social_fb_title":"","_seopress_social_fb_desc":"","_seopress_social_fb_img":"","_seopress_social_fb_img_attachment_id":0,"_seopress_social_fb_img_width":0,"_seopress_social_fb_img_height":0,"_seopress_social_twitter_title":"","_seopress_social_twitter_desc":"","_seopress_social_twitter_img":"","_seopress_social_twitter_img_attachment_id":0,"_seopress_social_twitter_img_width":0,"_seopress_social_twitter_img_height":0,"_seopress_redirections_value":"","_seopress_redirections_enabled":"","_seopress_redirections_enabled_regex":"","_seopress_redirections_logged_status":"both","_seopress_redirections_param":"","_seopress_redirections_type":301,"_seopress_analysis_target_kw":"","footnotes":""},"categories":[195],"tags":[133],"keyword":[1023,1008,1014,855,1057,957,909],"class_list":["post-100126","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-signposts","tag-economie-et-emploi-en","keyword-competitivite-en","keyword-croissance-economique-en","keyword-innovations-en","keyword-investissements-en","keyword-productivite-en","keyword-recherche-et-developpement-en","keyword-etats-unis-en"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.futuribles.com\/en\/wp-json\/wp\/v2\/posts\/100126","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.futuribles.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.futuribles.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.futuribles.com\/en\/wp-json\/wp\/v2\/users\/25"}],"replies":[{"embeddable":true,"href":"https:\/\/www.futuribles.com\/en\/wp-json\/wp\/v2\/comments?post=100126"}],"version-history":[{"count":5,"href":"https:\/\/www.futuribles.com\/en\/wp-json\/wp\/v2\/posts\/100126\/revisions"}],"predecessor-version":[{"id":101558,"href":"https:\/\/www.futuribles.com\/en\/wp-json\/wp\/v2\/posts\/100126\/revisions\/101558"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.futuribles.com\/en\/wp-json\/wp\/v2\/media\/97717"}],"wp:attachment":[{"href":"https:\/\/www.futuribles.com\/en\/wp-json\/wp\/v2\/media?parent=100126"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.futuribles.com\/en\/wp-json\/wp\/v2\/categories?post=100126"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.futuribles.com\/en\/wp-json\/wp\/v2\/tags?post=100126"},{"taxonomy":"keyword","embeddable":true,"href":"https:\/\/www.futuribles.com\/en\/wp-json\/wp\/v2\/keyword?post=100126"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}