David Bach became president of Switzerland‘s IMD business school in September and is Nestlé professor of strategy and political economy It has become conventional wisdom to view Europe as an economic powerhouse past its prime, overshadowed by the steady advance of the US and meteoric rise of China. Critics cite Europe’s shrinking share of global GDP, excessive regulation, and sluggish investment as evidence of a “competitiveness crisis”.
While the notion that Europe regulates while the US and China innovate is a common critique, Europe’s measured approach — exemplified by the EU AI Act — may set a global standard. Data privacy rules offer a precedent. US tech companies have decried Europe’s strict rules, but comprehensive data privacy standards now protect three-quarters of the global population. And they have not held back European business.