Former WTO head Pascal Lamy and Commission research chief Marc Lemaître foreground the negative effects of EU employment laws
Europe’s strict employment protection rules may be holding back innovation, according to Marc Lemaître, head of the European Commission directorate for research and innovation.
“The question is whether, in Europe, we have enough creative destruction,” Lemaître told an event jointly organised by the Commission and the OECD on November 17. He was referring to the theory that growth occurs when newer, more innovative technologies and business models oust older practices.
“Lately, some people have pointed to the difficulty that Europe has in reallocating resources because of our employment protection laws that put the cost of restructuring at an extremely high level,” he went on. This high cost “might also be part of the explanation why Europe is shying away from disruptive innovation compared to other parts of the world.”
This theme was picked up two days later by Pascal Lamy, former director general of the World Trade Organisation and chair of the high-level panel that advised the Commission on the current Horizon Europe programme. Speaking at the European Business Summit on November 19, he pointed to the high costs of restructuring in case of failure as a barrier to disruptive innovation.
He cited recent research from Bocconi University that suggests employment protection laws are a “first order determinant” of disruptive innovation and explain a...
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