The world is experiencing a third industrial revolution, that of Information and Communication Technologies, Tech. The first industrial revolution, which emerged from coal around 1800, gave the European powers a major technological lead and the colonization of the world. The second industrial revolution, stemming from oil and electricity around 1900, was at the heart of both world wars and saw the United States and Japan join Europe in the race for innovation.

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In the last 20 years, Europe has dropped out of the pack in Tech. The third industrial revolution is happening in the United States and China. Investing 5 times less than the United States in Tech, Europe is considered out of the game. Apart from certain niches, there are no European champions. Its startups do not disrupt industries. There is no European Google.

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The main obstacle today is the European consensus on employment protection laws. Continental Europe punishes risk taking and failure. It stops investments in innovative and risky projects, which are the engine of this industrial revolution. It anesthetizes disruptive innovation and diverts economic actors from the third industrial revolution, which is inherently unpredictable and volatile.

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Therefore, since the 1970s, Europe has specialized in mature industries, resulting from the second industrial revolution: automotive, chemistry, aeronautics, energy. Tech companies avoid Europe. Venture capital funds invest only secondary amounts.

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This weakness in Tech is deeply damaging to Europe’s economy, its businesses, its jobs, its standard of living, its sovereignty, its collective security. The threats on Europe are increased by China’s ambition, its growing confrontation with the US on Tech, the risk of war, cold or hot, between these two dominating powers.

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Europe has all the assets to get back in the race. Its democratic institutions guarantee political stability, unlike China or Russia. Regulatory frameworks ensure legal certainty for economic actors, unlike China. The infrastructure is excellent, unlike India. Governments and courts are not corrupt. The freedom of enterprise is real. The schools and universities are solid. Engineers are competent, teams work hard.

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Eliminating this hurdle is not a challenge to the European social model: Europe must continue to compensate the unemployed, train young and old free of charge, and ensure the health of all. Europeans don't need to become Americans to innovate. But they must stop jeopardizing risk taking and punishing failure. The Danish flexicurity model is profoundly European and would be perfectly suited to the needs of industrial revolutions. In addition to Tech, Europe's presence in the energy transition may require this same reform.

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Once this hurdle is eliminated, Europeans will be able to set ambitious goals, at the level of the United States and China: Europe will multiply by 5 private R&D in Tech, from 40 bn€ to 200 bn€ in 10 years; Germany will multiply by 8 private R&D in Tech, from 6 bn€ to 50 bn€; France will multiply by 8 private R&D in Tech, from 5 bn€ to 40 bn€.

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Europeans achieved together the common market and the single currency, which were far more ambitious projects. Collectively, they can come back to the edge of Tech and innovation. It's possible. It is necessary. Let's do it.