by Dominique Dewitte
published on Thursday February 1, 2024 to 12:03 •
3 min read
In summary. Europe is losing the battle with the US in artificial intelligence and with China in electric vehicles, but leads in the world of regulation. The European economy is not only underperforming due to regulations, but also issues from demography to energy costs. US regulators tend to act when there is evidence of harmful problems, while European regulators will act based on the possibility of it. This precautionary principle can stifle innovation.
Why is this important?This situation highlights a crucial dilemma for Europe: how to strike a balance between consumer protection and promoting innovation and investment? While the EU leads the world in regulation in several areas such as data privacy and carbon emissions, this heavy regulatory approach could hinder investment in innovation and technological development, leaving Europe behind its US and Chinese competitors.
In the news. The EU has unveiled a sweeping draft law that bans certain types of AI, strictly regulates others, and imposes huge fines on violators. Europe therefore takes the lead in regulation, without taking into account the impact on innovation.
- Europe’s strict regulations, intended to protect competition and consumers, can limit investments in innovation. Examples of this are the restrictions on mergers that have led to a fragmented mobile phone network
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Source: Wall Street Journal
Tags: America innovates China replicates Europe regulates applies