Why Europe Lags Behind the U.S.: Dynamism
The level of economic dynamism is a matter of how fertile a country is in coming up with innovative ideas having prospects of profitability, how adept it is at identifying and nourishing the ideas with the best prospects, and how prepared it is in evaluating and trying out the new products and methods that are launched onto the market.
Europe's root problem is a dearth of such economic dynamism. Germany, Italy and France possess less dynamism than do the U.S. Far fewer firms break into the top ranks in the former, and fewer employees are reported to have jobs with extensive freedom in decision-making -- which is essential at companies engaged in novel, and thus creative, activity.
From 2006 Nobel economist Edmund Phelps in today's WSJ, Entrepreneurial Culture.