America innovates, China replicates, Europe regulates

From Europe Regulates Its Way to Last Place by Greg Ip.  The subheading is From mergers to AI, the EU’s aggressive rule-making hampers its ability to compete with China and the U.S.

These are humbling times for Europe. The continent barely escaped recession late last year as the U.S. boomed. It is losing out to the U.S. on artificial intelligence, and to China on electric vehicles.  

There is one field where the European Union still leads the world: regulation. Having set the standard on regulating mergers, carbon emissions, data privacy, and e-commerce competition, the EU now seeks to do the same on AI. In December it unveiled a sweeping draft law that bans certain types of AI, tightly regulates others, and imposes huge fines for violators. Its executive arm, the European Commission, might investigate Microsoft’s tie-up with OpenAI as potentially anticompetitive.

Never before has “America innovates, China replicates, Europe regulates” so aptly captured each region’s comparative advantage.