Can Europe avoid gradually becoming a “Problem Region”?

This editorial examines Europe’s position in a rapidly changing global economic, technological, scientific, and geopolitical environment. The post–World War II world order, which for decades provided relative stability and a predictable framework for international cooperation, is increasingly giving way to a new global structure shaped primarily by economic competitiveness and technological leadership. Over the past fifteen years, major structural changes in the global economy have altered the balance between leading regions, with the United States and China strengthening their competitive positions while Europe’s economic momentum has stagnated. The United States has maintained strong growth through a high tolerance for investment risk, deep capital markets, and sustained support for innovation-driven companies. China’s competitiveness, meanwhile, has been built on centralized strategic decision-making, large-scale industrial capacity, major investments in automation, and a highly educated workforce. At the same time, other large emerging economies and rapidly growing regions, particularly parts of Africa, are gaining demographic and economic advantages that further intensify global competition. In contrast, Europe faces several structural challenges that limit its competitiveness, including relatively low investment in high-risk innovation, high regulatory and taxation burdens, slower decision-making processes, and demographic decline. As a result, Europe’s global share in supporting new high-growth companies has fallen significantly. The editorial argues that prolonged periods of weak economic growth, even when differences appear small annually, can lead to substantial long-term divergence between regions. To avoid gradually becoming a “problem region,” Europe must strengthen its innovation ecosystem, particularly by accelerating the translation of scientific discoveries into start-up companies through universities. Greater collaboration between academia, industry, and financial institutions, combined with increased willingness among investors to support high-risk innovation, will be important for maintaining Europe’s long-term economic, technological, and geopolitical competitiveness.