In Explained’s new weekly column, titled ‘GDP: Graphs, Data, Perspectives’, Udit Misra looks at the lowered economic competitiveness of Europe, which essentially ran the world until a century ago.
During a curtain raiser to the latest World Economic Outlook by the IMF, its Managing Director, Kristalina Georgieva, shared quite a remarkable set of data about Europe’s economy.
CHART 1 shows the companies in the European Union that are less than 50 years old but today have a market capitalisation of more than $10 billion. This list includes well-known names such as Spotify and Ryanair.
CHART 1
But now look at CHART 2which places the market capitalisation of European companies next to US companies of the same vintage.
CHART 2 speaks for itself and shows how seven US mega-firms — none of which existed 50 years ago — boast market capitalisation dwarfing that of firms of similar vintage in Europe.
CHART 2
The point that Georgieva, who hails from Bulgaria, wanted to make: “…my beloved, native Europe, some tough love: enough lofty rhetoric on how to lift competitiveness — you know what must be done. It is time for action.”
How did Europe, which essentially ran the world until a century ago and was the birthplace of Enlightenment and industrial revolution reach this state?
As it happens, the newly-minted Nobel laureate in Economics, Philippe Aghion (who teaches economics on both sides of the English Channel) had much to say on this slide earlier in the week.
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He said that while Europe was catching up with US standards of living as it recovered after the devastation of WW2, since the mid-1980s the average per capita GDP (read income) of the eurozone has declined relative to the US. He argued, “The big reason is that we failed to implement breakthrough high-tech innovations.”
Aghion said that at the heart of the matter was Europe’s inability to reconcile competition policy (which aims to promote fair competition in an economy by clamping down on anti-competitive entities such as monopolies and cartels) and industrial policy (which aims to promote national industries to achieve economic, social and security goals).
“In Europe, in the name of competition policy we became very anti any form of industrial policy. I think we need to evolve on that and find ways to reconcile industrial policy in areas like defence, climate (change), AI (Artificial Intelligence), biotech…,” said Aghion. He gave the examples of the Defense Advanced Research Projects Agency (DARPA) in the US which he called is the pro-competition way of doing industrial policy.
In fact, while he was quick to point out that he does not welcome the “protectionist wave” in the US as it is not good for global growth and innovation, he could see the bright side: “European countries have to realise that we should no longer let the US and China become the technological leaders and lose to them.”
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Georgieva’s solution: Consider appointing a “single market czar” with real authority to drive reforms forward. Remove border frictions in the labour market, goods and services trade, energy, and finance. Build a single European financial system. Build an energy union. Complete your project. And catch up with the private sector dynamism of the US.
Any guesses how many Indian companies figure in the top 100 companies by market capitalisation in the world?
The US has 59, China has 12, Europe and the rest of the world have 27 companies.
India has two.
The first is Reliance, which ranks 71st and the second is HDFC Bank, at the 90th rank.
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This whole debate also puts into perspective what India needs to do and how far it needs to go.
Udit Misra is Senior Associate Editor at The Indian Express. Misra has reported on the Indian economy and policy landscape for the past two decades. He holds a Master’s degree in Economics from the Delhi School of Economics and is a Chevening South Asia Journalism Fellow from the University of Westminster.
Misra is known for explanatory journalism and is a trusted voice among readers not just for simplifying complex economic concepts but also making sense of economic news both in India and abroad.
Professional Focus
He writes three regular columns for the publication.
ExplainSpeaking: A weekly explanatory column that answers the most important questions surrounding the economic and policy developments.
GDP (Graphs, Data, Perspectives): Another weekly column that uses interesting charts and data to provide perspective on an issue dominating the news during the week.
Book, Line & Thinker: A fortnightly column that for reviewing books, both new and old.
Recent Notable Articles (Late 2025)
His recent work focuses heavily on the weakening Indian Rupee, the global impact of U.S. economic policy under Donald Trump, and long-term domestic growth projections:
Currency and Macroeconomics:
"GDP: Anatomy of rupee weakness against the dollar" (Dec 19, 2025) — Investigating why the Rupee remains weak despite India's status as a fast-growing economy.
"GDP: Amid the rupee's fall, how investors are shunning the Indian economy" (Dec 5, 2025).
"Nobel Prize in Economic Sciences 2025: How the winners explained economic growth" (Oct 13, 2025).
Global Geopolitics and Trade:
"Has the US already lost to China? Trump's policies and the shifting global order" (Dec 8, 2025).
"The Great Sanctions Hack: Why economic sanctions don't work the way we expect" (Nov 23, 2025) — Based on former RBI Governor Urjit Patel's new book.
"ExplainSpeaking: How Trump's tariffs have run into an affordability crisis" (Nov 20, 2025).
Domestic Policy and Data:
"GDP: New labour codes and opportunity for India's weakest states" (Nov 28, 2025).
"ExplainSpeaking | Piyush Goyal says India will be a $30 trillion economy in 25 years: Decoding the projections" (Oct 30, 2025) — A critical look at the feasibility of high-growth targets.
"GDP: Examining latest GST collections, and where different states stand" (Nov 7, 2025).
International Economic Comparisons:
"GDP: What ails Germany, world's third-largest economy, and how it could grow" (Nov 14, 2025).
"On the loss of Europe's competitive edge" (Oct 17, 2025).
Signature Style
Udit Misra is known his calm, data-driven, explanation-first economics journalism. He avoids ideological posturing, and writes with the aim of raising the standard of public discourse by providing readers with clarity and understanding of the ground realities.
You can follow him on X (formerly Twitter) at @ieuditmisra
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