Competitive Europe: Paradise Lost or a New Drive
Series
IEDC Book of the Year; 37
ISBN
ISBN 978-961-6720-51-9
Type
book section
Date Issued
2024-12-17
Author(s)
Abstract
The author examines Europe’s declining competitiveness through the analytical lens of elite theory of economic development. He argues that Europe’s core problem is neither insufficient regulation nor inadequate fiscal spending, but rather the absence of a coherent and effective elite system capable of coordinating risk-taking, innovation, and sustainable value creation. Elite theory extends institutional economics by emphasizing elite agency as the primary driver of institutional change, operating through competition between elite business models with differing capacities for coordination and value creation.
Casas i Klett stresses that value can only be created with risk, and he identifies Europe’s growing aversion to high-risk, high-return projects as a fundamental structural weakness. While the EU may excel at regulation and redistribution, it fails to generate elite business models that scale globally and appropriate the value they create. This results in Europe being increasingly exposed to extractive value transfers by foreign elite systems, particularly from the United States and China.
He critiques recent EU reports (Letta, Draghi, Niinistö) for correctly diagnosing Europe’s challenges but misidentifying their root causes. Their reliance on subsidies and large-scale public spending, he argues, represents malinvestment rather than sustainable value creation. Casas i Klett concludes that Europe requires profound institutional and elite-system reform, including greater tolerance for risk, stronger elite coordination, and the emergence of genuinely European elite coalitions capable of driving innovation, competitiveness, and long-term economic development.
This contribution is based on a keynote by Prof. Tomas Casas i Klett delivered in November of 2024 in Bled, Slovenia
Casas i Klett stresses that value can only be created with risk, and he identifies Europe’s growing aversion to high-risk, high-return projects as a fundamental structural weakness. While the EU may excel at regulation and redistribution, it fails to generate elite business models that scale globally and appropriate the value they create. This results in Europe being increasingly exposed to extractive value transfers by foreign elite systems, particularly from the United States and China.
He critiques recent EU reports (Letta, Draghi, Niinistö) for correctly diagnosing Europe’s challenges but misidentifying their root causes. Their reliance on subsidies and large-scale public spending, he argues, represents malinvestment rather than sustainable value creation. Casas i Klett concludes that Europe requires profound institutional and elite-system reform, including greater tolerance for risk, stronger elite coordination, and the emergence of genuinely European elite coalitions capable of driving innovation, competitiveness, and long-term economic development.
This contribution is based on a keynote by Prof. Tomas Casas i Klett delivered in November of 2024 in Bled, Slovenia
Language
English (United States)
HSG Classification
contribution to practical use / society
Book title
Competitive Europe: Paradise Lost or a New Drive
Publisher
IEDC-Bled School of Management
Publisher place
Kataložni zapis o publikaciji (CIP) pripravili v Narodni in univerzitetni knjižnici v Ljubljani COBISS.SI-ID 219820803
Volume
37
Start page
4
End page
16
Pages
13
Subject(s)
File(s)![Thumbnail Image]()
open.access
Name
IEDC-book-of-the-year-2024_WEB.pdf
Size
9.91 MB
Format
Adobe PDF
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