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,...

This paper investigates the potential impact of increased business R&D efforts in Europe on the total factor productivity gap between European and U.S. industry. The paper addresses Europe’s ambition, expressed at the 2000 Lisbon Summit to become “the most competitive and dynamic...