This report shows that Europe has seen a
significant expansion in her knowledge
industries over the past decade and at a
similar rate to the expansion of knowledge
based employment in the US. Moreover, in
2005 the size of Europe’s knowledge
economy measured by the share of total
employment in knowledge industries is similar
to the US.
What Europe has not seen is the
accompanying economic dynamism of faster
growth and higher productivity. Productivity
growth has fallen in many EU States rather
than accelerating, in contrast to the US. The
key underlying reason is a slow down in the
pace of technological innovation and a failure
to increase investment in knowledge across
the EU.