Works in Progress Podcast Why Europe has stagnated
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Feb 25, 2026 Pieter (Peter), a European commentator and researcher on technology, labour markets, and industrial policy, explains why Europe has slowed. He discusses missing tech superstars, labour‑law rigidities that raise firing costs, fragmentation from EU directives, and energy and capital constraints. Short, sharp takes on regulation, works councils, and what reforms like flexicurity might change.
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Few Software Superstars Drive The US–Europe Gap
- A few US software superstars drive most measured gaps between US and Europe.
- Removing the Magnificent Seven shrinks stock returns, R&D and investment gaps to near zero, implying concentrated winner-take-most dynamics.
EU Directives Fragment Enforcement And Raise Startup Costs
- EU directives create fragmented enforcement that raises fixed costs for startups.
- The AI Act, GDPR, DMA and DSA leave enforcement to member-state regulators, producing ~270 tech regulators and compliance burdens.
GDPR Raised Fixed Costs And Stopped Cross‑Product Scaling
- The GDPR unintentionally raised barriers for small entrants and cross-product scaling.
- GDPR rules restricting using data for purpose B block using success in area A to expand into adjacent products, hurting AI training and scale-ups.