I just returned from a four-day trip to Helsinki, and as always, reading the news outside the U.S. offers a powerful change in perspective. Local stories gain relevancy, and American news is seen through a different lens. At the heart of these differing viewpoints lies a single, powerful theme: global competitiveness.
The conversation consistently revolves around where the U.S. and Europe fit into an increasingly crowded global landscape. In Europe, the desire to become more competitive is a constant refrain in the news. Yet, in practice, I rarely see the on-the-ground changes that would lead to a steeper growth curve.
The Work Ethic Divide: A Factor in Global Competitiveness
It never ceases to surprise me how short the business days can be in Europe. This isn’t just a winter phenomenon in Finland. Across the continent, it’s common for businesses to open late, around 11 AM, and close by 5 or 6 PM. When economic output is a direct function of time worked, it’s incredibly difficult to match the productivity of a culture where longer hours are the norm. You simply can’t compete on output when you’re working significantly less time, a fundamental drag on national global competitiveness.
Education’s Role in the Competitive Landscape
Over dinner with some Finnish entrepreneurs, we debated the differing business environments. Their insights were fascinating.
- The Hidden Cost of “Free”: They argued that Finland’s completely free higher education system can, ironically, hinder growth. With government financial support, individuals may choose to prolong the “student life” rather than entering the workforce. Subsidies, in this case, can lead to more education than is economically optimal.
- The Power of Flexibility: At the same time, they praised the U.S. environment for its flexibility. In America, individuals can more easily train for fields different from their first degree, allowing for smoother career transitions. This adaptability extends to the corporate world, where happy employees are more productive and boost a company’s competitive advantage.
Risk and Reward: The Engine of Global Competitiveness
One entrepreneur I spoke with, a Finn who has lived in the U.S. for over a decade, perfectly illustrates this cultural divide. He received his first degree for free in Finland. After working for a few years, he enrolled at the Stanford Graduate School of Business for his MBA, taking on significant personal debt.
He recounted how his Finnish friends couldn’t understand why he would risk so much for a second degree. This anecdote highlights a core difference in the mindset between the U.S. and Europe.
In the U.S., a degree from a top institution functions as a powerful market signal. The spread between success and failure is simply much wider, a key feature of America’s model for global competitiveness. This is also reflected in compensation.
- Incomes for the top 1% in the U.S. start at around $385,000.
- Average U.S. Household Income: Approximately $44,000.
- Poverty Threshold (Family of Four): Roughly $23,000.
The choice to not work in Europe isn’t as financially detrimental as it is in the U.S., but the incentive to work to extreme levels is also not as strong.
The Policy Puzzle: Hindering or Helping Global Competitiveness?
When I’m in Europe, it’s easy to spot the issues that can throttle economic growth. I find it concerning, then, that in the U.S., we often seem determined to implement the very same policies.
A recent Financial Times analysis compared tax revenue as a percentage of GDP across developed nations. The U.S. was at the bottom with just 24.8%. The article framed this as a “shocking shortfall,” suggesting America needed to raise taxes to cover its $3.54 trillion in spending, effectively becoming more like Europe.
But this perspective focuses only on the numerator instead of the denominator. What about growing the economy itself? Had the infographic included faster-growing economies like China (where the same ratio is estimated to be 17%), the analysis might have reached a very different conclusion. We shouldn’t aim to match Europe’s growth; we should be learning from those who are winning on a global scale.
The Path Forward: Retain Talent, Reward Risk
That Finnish entrepreneur I mentioned? He took his company public on the NYSE last year and now employs over 400 people in the U.S. Yet, he told me his Green Card application was denied three times. For the U.S. to maintain its edge in global competitiveness, we must fix our ability to retain the world’s brightest minds.
The U.S. was built by risk-seekers, people who left everything they knew for the chance to reinvent themselves. We need these people.
As David Brooks noted in his New York Times column “The Collective Turn,” America has prospered because of a “decentralizing genius.” Our greatest innovations have emerged bottom-up, from tinkerers and outsiders, not from top-down commissions.
The path forward requires an approach that is socially responsible yet fiscally conservative. We should foster a platform that doesn’t pick winners and losers, but one that ensures when winners win, they win big, and that America is the only place they can do it. This is how we can once again strive for greatness.
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