EU 20 Years Behind US in Econ Development

As reported in today's IBD, a new study by Eurochambres (the European Chambers of Commerce) concludes that the European Union is 20 years behind the U.S. in economic development. Consider that:

1. The U.S. reached Europe's current level of economic development (measured by GDP per person) in 1985, 22 years ago.

2. The U.S. reached Europe's current level of productivity (expressed in GDP per worker) in 1989, 18 years ago.

3. The U.S. reached Europe's current employment rate and level of investment in R&D in 1978, 29 years ago.

4. The U.S. reached Europe's current level of Internet use 4 years ago.

What would it take for Europe to catch up to the U.S.?

5. If income (GDP per capita) grew in the US at 2% per year and in the EU at 3% per year, (a 1% higher growth of the EU), it would take the EU 38 years to catch up with the US, in 2045.

Why the difference? According to IBD, "the U.S. has smaller government, less regulation and much higher productivity. It also has what Nobel Prize-winning economist Edmund Phelps recently called "dynamism" — a culture of entrepreneurialism that doesn't exist in Europe."