European productivity gaps: Is R&D the solution?

Industrialization, and the association between technological advance and economic growth, brought Europe world economic leadership in the 19th century. However, in the course of the 20th century, European leadership was lost to the United States, as well as a number of dynamic Asian economies, of which Japan was the first to emerge in the process of modern economic growth. This loss of European leadership is commonly associated with another major technological change: the rise of the mass production system in the United States (e.g., David, 1975).....