U.S. firms apply technology more energetically than European firms. Three comparisons are worthwhile. These four indicators should be watched as harbingers of the new economy in Europe. In terms of broad aggregates, the European and U.S. economies are open to foreign trade and investment to about the same degree. However, labor practices are much more rigid in Europe.
Job descriptions are far less flexible.
It is harder for firms to downsize their workforce when demand is weak, and accordingly they are less willing to hire when demand is strong. The underlying reason that workplace rules and traditions remain so durable is that unemployment has been persistently high for more than a decade. In Europe, if you have a job, you put your personal and political energy into protecting that job. Lower unemployment rates, resulting from traditional macroeconomic stimulus, are the key to more flexible European labor practices, and faster growth in labor productivity. Corporate restructuring is going forward in Europe.