Summary:Countering the perception of Europe as an economic laggard, the continent is actually enjoying steady growth fueled by technological advances and a growing entrepreneurial spirit, a panel of experts suggested.
"This is the beginning of a growth period that is not all that different from the beginning of the U.S.'s growth period," said Klaus Friedrich. "This is not just a cyclical upswing. There are structural reasons for this to be sustained." Those reasons include the adoption of many of the technological advances that first appeared on this side of the Atlantic, trade advantages of a single currency and a commitment to control the inflation that frequently haunted the region.
But perhaps most important is a widespread change in European culture to welcome entrepreneurs. Fast-growing start-up firms are becoming a larger part of many countries' economic fabric, and U.S.-style incentives, such as stock option awards, are becoming more accepted.
"Two and a half years ago, shareholder value was a dirty word in Germany," Friedrich said. "Today it is unchallenged that our corporations will do anything for shareholder value and the public will applaud." Germany is not the only nation to welcome those ideas.
"The ability to accelerate the rate of change is huge and the opportunities are enormous," said Jeff Watson, who is based in Ireland, Europe's fastest growing economy. Watson noted that Ireland has embraced high-technology education and provided corporate tax incentives to become a magnet for many computer and Internet companies.
Despite the generally upbeat predictions for Europe, some challenges still remain, noted Mustafa V. Koc. Several governments continue to subsidize dying industries in what he perceives as a misguided attempt to save jobs. And though technology has been embraced, there remains a sizable gap with American competitors, he noted.
What's more, Europeans have been slow to take full advantage of the trade opportunities that the European Union and its Euro currency present, said Stephan-Goetz Richter. He noted that it's much easier to find German-American or British-American trade organizations, for example, than to find an Irish-French group. He also noted a reluctance to adopt American-style solutions to retirement issues. Europe's aging population will soon be making huge financial demands on many European pension systems.
"[European governments] are resisting ideas such as 401(k) plans," he said. Despite those concerns, there are more positives in Europe than negatives, noted moderator William Emmott. Over the past decade, Europe's economy has grown at a respectable rate of 2 to 3 percent and some forecasters expect that to accelerate. Mergers and acquisition activity is starting to increase and that is expected to continue. "There's a lot going on in Europe," he said.
The upbeat times are spilling over to provide more than merely financial benefits. Long simmering tensions between Turkey and Greece have been reduced as Turkey eyes entrance into the European Union, a prospect that is likely to come to fruition within a decade, Koc said.
"Turkey and Greece have realized that they must co-exist," Koc said. "There is so much synergy between the countries. Currently trade volume between the countries is only $400 to $500 million annually. If that could be increased to $2 to $3 billion it would be very difficult for politicians to use those tensions for political use."
