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Thanks for this Migs.

One point, among others, which jumped out at me was his stressing that Europe was at a technical disadvantage.  That doesn't seem to jibe with industrial facts on the ground.  I wish I could better understand what he's implying here.

I would think that germany's export lead qualifies as technical advantage, and i believe the Euro's strength rests partly on an advanced industrial base.

"Life shrinks or expands in proportion to one's courage." - Ana´s Nin

by Crazy Horse on Sat Jun 28th, 2008 at 08:43:24 AM EST
[ Parent ]
I think he's talking about the gap that opened up in the 1990's between the US and Europe because the US were early adopters of information technologies and productivity increases accrued there earlier. Also, he claims that the Lisbon Agenda for "Growth and Jobs" was based on a misdiagonosis of Europe's economic problems. The Lisbon Strategy is based on the idea that unemployment and sluggish economic job is due to lack of "competitiveness" rather than in a combination of lack of research and development and erosion of social protections. And the policy prescriptions that follow are different. Lisbon:
This strategy, developed at subsequent meetings of the European Council, rests on three pillars:
  • An economic pillar preparing the ground for the transition to a competitive, dynamic, knowledge-based economy. Emphasis is placed on the need to adapt constantly to changes in the information society and to boost research and development.
  • A social pillar designed to modernise the European social model by investing in human resources and combating social exclusion. The Member States are expected to invest in education and training, and to conduct an active policy for employment, making it easier to move to a knowledge economy.
  • An environmental pillar, which was added at the Göteborg European Council meeting in June 2001, draws attention to the fact that economic growth must be decoupled from the use of natural resources.
A "competitive, dynamic, knowedge-based economy" neglects engineering, materials and even biotechnology. Give everyone a computer and they'll be productive! Also, "human resources" is business-speak out of place in the "social pillar" part, and they are also asking for "education for a knowledge economy". At least they get it right on the reduction of resource use. Gonzalez says
I intend to convince the European social and economic agents that the European social model, that is social cohesion, depends on the European economy's ability to add value, that the success after WWII is that the social contract was a virtuous circle which made Europe a first-grade industrial economic power, with a strong degree of social chesion and a great capacity to generate a market [demand].
In another question about "advice to a young aspiring entrepreneur" he talks about "leadership" in terms of being able to inspire a team of people, believing in a project, avoiding a mercenary spirit, and aiming not to satisfy existing demand but to create new demand (I suppose true innovation means creating entirely new products). He's also clearly a fan of the Social Market Economy.


When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes
by Carrie (migeru at eurotrib dot com) on Sat Jun 28th, 2008 at 09:41:32 AM EST
[ Parent ]
The Euractiv story I link to in the introduction itself links to this interview in the Financial Times on January 18
"The Lisbon agenda identified the symptoms of Europe's malaise - lower growth, loss of competitiveness, widening technology gap - but misdiagnosed the disease," Mr González said.

"Europe suffers from an extraordinary corporate rigidity," he said. "And I am not only talking about the power of trade unions and labour rights. There is also enormous rigidity on the corporate side. You only have to compare the rankings of US and European companies now and 30 years ago. Most of the top US companies today were not around in the 1980s. There is a lot of mobility: it is a system that rewards risk, initiative and efficiency and allows companies to succeed as well as to fail.

"In Europe, there have been hardly any changes in the corporate rankings. Business, labour and political elites protect each other. We stifle innovation. That is why Europe has failed to produce a Bill Gates. It is a cultural problem." Mr González said.

There's more where that came from...


When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes
by Carrie (migeru at eurotrib dot com) on Sat Jun 28th, 2008 at 10:16:26 AM EST
[ Parent ]
Seen here on ET in the Salon...

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes
by Carrie (migeru at eurotrib dot com) on Sat Jun 28th, 2008 at 10:22:00 AM EST
[ Parent ]
Europe has failed to produce a Bill Gates

Better not!

Sorry, but my impression is that Felipe got stuck in a lighter version of Third-Wayism.

*Lunatic*, n.
One whose delusions are out of fashion.

by DoDo on Tue Jul 1st, 2008 at 06:45:03 AM EST
[ Parent ]
In some ways, he did.

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes
by Carrie (migeru at eurotrib dot com) on Tue Jul 1st, 2008 at 06:47:50 AM EST
[ Parent ]
that Europe was at a technical disadvantage [...] doesn't seem to jibe with industrial facts on the ground

Can you expand on "the industrial facts on the ground" as you see them, with an emphasis on research, develoment and innovation? Also, he's maybe comparing Europe with an unrealistic or outdated image of the US, to which you can also speak.

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes

by Carrie (migeru at eurotrib dot com) on Sat Jun 28th, 2008 at 09:44:49 AM EST
[ Parent ]
Also, he's maybe comparing Europe with an unrealistic or outdated image of the US, to which you can also speak.

I was thinking about that as I read those earlier comments.  For all Clinton's faults, and there are many, during his tenure the US was a progressive, hopeful, innovative place.  All that came to a screeching halt with Bush v Gore and the fevered dreams of the PNAC and neocon hegemonists.  Whatever technological edge we might have gained in the 90s, we have squandered since then.  Now it seems the only sphere in which we truly excel is in bigger and more expensive ways to kill people and blow things up.

And I would argue that one of the cornerstones of the information age and the knowledge economy often overlooked is the growth of open source software and technology, the iconic example being the rise of Linux as a viable alternative to the Microsoft borg.  And I think it is no accident that Linux itself is the brainchild of Linus Torvalds, an unassuming Finn.  I suspect even a casual inspection of the pool of significant contributors to Linux, KDE, and GNOME, as well as the amazing pool of follow-on products and programs, would reveal the enormous contributions made by European coders and advocates.

We all bleed the same color.

by budr on Sat Jun 28th, 2008 at 11:48:17 AM EST
[ Parent ]
It is not in question F.González is a true believer in Social Democracy. He however does not understand that Bill Gates ans Microsoft were a post-industrialist mirage.

Forget Bill Clinton's era. The real breaking steps were done before Microsoft, and were largely helped by DARPA. the real action happened from the late 50's to the early 70's, in a progressively liberalised US.
 Do you know what SF means?
  - until late 60 meant Science Fiction.
  - beginning from late 60 became to be Speculative Fiction
(engineers and scientists are highly respected, but the us entered an age of mysticism, with drugs contributing a little to that, but SAT scores were already decreasing since 1963)

I sorry for german universities. since they are so bad, compared to english and american ones, i guess people graduating from that must have real problems in creating gadgets that anyone else may buy.

Tell you what, i am going to create the best university in the world. i will buy the best young brains, and then claim that there is a trace-element in the water that makes people smarter, errr, innovative.

Finally: People who believe in mirages should not be selected as guides.

by findmeaDoorIntoSummer on Sat Jun 28th, 2008 at 09:01:58 PM EST
[ Parent ]
budr:
For all Clinton's faults, and there are many, during his tenure the US was a progressive, hopeful, innovative place.  All that came to a screeching halt with Bush v Gore and the fevered dreams of the PNAC and neocon hegemonists.  Whatever technological edge we might have gained in the 90s, we have squandered since then.  Now it seems the only sphere in which we truly excel is in bigger and more expensive ways to kill people and blow things up.
Here's what González has to say about the Bush administration:

¿Cuál sería la mejor noticia de Estados Unidos para España tras las elecciones del próximo noviembre?What would be the best news from the US for Spain after next November's elections?
Yo creo que van a ganar los demócratas. La gran paradoja es que Barack Obama tendrá más dificultades para vencer a John McCain de las que tendría Hillary Clinton. Eso no quiere decir que no pueda ganar. En uno u otro caso, espero que suponga, y eso sería la buena noticia para España, un cambio sustancial para evitar los dos grandes errores de la Administración saliente. Uno, el de una política exterior muy errática, muy mala, que nos ha llevado a situaciones peores que al comienzo en todos los desafíos y en todas las amenazas. Y dos, en la política interna, en materia económica, por el desequilibrio que Estados Unidos padece en estos momentos y está filtrando al resto de la economía mundial. Es verdaderamente increíble cuando oigo a los grandes amigos de la Administración americana en España hablar de que no estamos haciendo bien las cosas aquí y que mejor lo hubiéramos hecho como George Bush, que debe ser su modelo. Eso va a cambiar, y también cambiará si gana McCain. Yo tengo respeto y amistad por Estados Unidos, pero las torpezas que he vivido en este periodo -hablo de torpezas, no de ideología- nunca las había conocido.I think the Democrats are going to win. The great paradox is that Barack Obama will have a harder time beating John McCain than Hillary Clinton would. This doesn't mean that he cannot win. In either case, I hope this means, and that would be good news for Spain, a substantial change to avoid the two great errors of the outgoing administration. One, a very erratic, very bad foreign policy, which has taken us to worse situations than at the beginning on all challenges and all threats. And two, in domestic politics, on economic matters, because of the imbalances that the US suffers at this time and which are seeping out to the rest to the world economy. It is truly incredible when I hear the great friends of the US administration in Spain say that we are not doing things well here and that we would have done better to do as George Bush, who must be their model. That is going to change, and it will also change if McCain wins. I have respect and friendship for the US, but the clumsiness I have lived in this period--I speak of clumsiness, not of ideology--were unknown to me.

When he says in either case is he betraying that the interview was made before the end of the primary season, maybe much earlier? However, it must have been already after Obama was well ahead of Clinton. Or maybe he means whether the Demsocrats or the Republicans win (given the comment about McCain also changing the way things are done).

The first time I read this I thought that "the great friends of the US Administration in Spain" meant American officials in Spain, but clearly he means Aznar's people in the Spanish opposition party PP which--interestingly--he doesn't name at various points of the interview even though clearly he refers to them.

And note the accusation of incompetence of the Bush administration. He's not so shocked about the ideology, but about the sloppy execution.

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes

by Carrie (migeru at eurotrib dot com) on Sun Jun 29th, 2008 at 02:01:12 AM EST
[ Parent ]
Of course my view is a bit jaundiced, coming from so long in the energy industry.  Europe absolutely leads in renewable energy, there's no comparison there.  There are only two wind turbine manufacturers in the US.  Clipper Wind, which has had a very problematic product introduction, doesn't come close to even the second tier European manufacturers such as REpower or Nordex in sales or revenue.  GE's wind division is of course a US company, and they have been the market leaders in the US nearly since turbine introduction.  But the turbine is designed and supported by the European design and engineering team, resulting from their purchase of a German company, Tacke.  Further, their new 2.5 MW machine is completely designed by the European team, and only available for sales here in Europe.

The solar industry also has European companies at the foundation, though Japan ranks as high as Germany, and China is expanding voraciously.  The salient fact in all this is that innovation alone doesn't cut it, one also has to build markets, and there the EU has shone.

It is European utilities like EdF, EdP (Portugal), E.on, Scottish and Southern, Endesa and others who are currently storming around making the innovation purchases in both technologies and projects, as well as taking control of greater parts of international grids.

The amurkan "lead" in information techologies is partly true, partly hype.  Much of the US investment in 90's IT went to a fantasy of the Web, while at the same time the steel industry collapsed, and manufacturing went elsewhere (though partly owned by US companies; partly means there is now also part local ownership.)  Across the pond, manufacturing continues in the EU, and is growing strongly, particularly in the eastern countries.

While much of heavy industry has moved to China, India and Korea, there are quality issues which allow a premium on higher cost EU manufacturers.  So I don't see the EU losing out there either.  The Chinese windpower industry has been exploding for several years, and there are now players whose installations begin to match 2nd tier EU companies.  But their turbines don't work yet, even when partnered with top EU companies, simply because they can't reach EU quality standards.  For industrial equipment, that's important.

One example outside of windpower: a local German company, Barmag, was a global leader in their field, making huge profits in China as well as their fabric winding machines were the centerpiece of the explosion of Chinese clothing manufacturing.  They went nearly bankrupt (or did they go bankrupt?) when the Chinese reverse engineered their machines cheaply.  Two factors resurrected the company:  one, it was eventually learned that you don't make a profit if the machines keep breaking, so quality counts; and two, they have innovated fabric winding machines for other technologies.

I don't dispute that entrepreneurship may well be a bit harder in the EU (from my own experience) but i also believe it is overplayed in the US today, a mythical relic from previous times when it was true.  The framework of the amurkan economy sets the stage, and one only has to look at the difference in products between US and other global auto manufacturers to see that the US badly missed the boat, because the US market prevented them from seeing the real market of the rest of the world.

On the R&D side in windpower, while i personally know many of the top NREL execs and engineers, and they do great work, it doesn't compare to what's done here.  They simply don't have the long term experience or infrastructure on which to build an R&D program.  (With the explosion of the US wind market, that is changing, but it will take some years of stable growth, which remains unsure, before the US begins to reach parity with EU research.

As an example of where infrastructure makes a difference in windpower, the EU has already pioneered huge R&D projects partnering the top labs and companies, to the level of some 60 or 70 concerns participating in the latest round.  These R&D projects are already based upon several years of major discussions which refined where the emphasis should be, and then they designed the R&D to meet the goals.  The R&D platform was based upon what the existing market and infrastructure demanded.  The US, without enough infrastructure to know what's necessary, is still playing catch-up.

"Life shrinks or expands in proportion to one's courage." - Ana´s Nin

by Crazy Horse on Sat Jun 28th, 2008 at 02:55:06 PM EST
[ Parent ]
Europe absolutely leads in renewable energy, there's no comparison there.

And, to Migeru, this is what González said in contrast:

we have very severe energy problems--in non-renewables because of dependence and in renewables because of R&D&i


*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Tue Jul 1st, 2008 at 06:49:13 AM EST
[ Parent ]
Well, it appears we think González doesn't have a very realistic assessment of where Europe stands, let alone where the US stands.

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes
by Carrie (migeru at eurotrib dot com) on Tue Jul 1st, 2008 at 06:51:02 AM EST
[ Parent ]
There is also:

the fracture of lack of adaptation to the technological revolution... because Indian software engineers have to be imported to Germany, which is the land of Engineering.

Actually, the idea to import foreign software engineers was pushed by the IT business association, citing 10% of jobs permanently unoccupied, but more likely inspired by hopes of lower labour costs. However, even though already Schröder tried to put policies in place, very few people came - even Indian programmers want higher wages.

Also note that say two top programs, the anti-virus program Avira and the anti-spyware program Ad-Aware, are creations of German start-up companies.

*Lunatic*, n.
One whose delusions are out of fashion.

by DoDo on Tue Jul 1st, 2008 at 07:12:21 AM EST
[ Parent ]

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