The writer is a professor at the European University Institute, Florence, and the author of ‘Big Tech & Digital Economy’

Europe is falling behind the US and China in terms of economic dynamism, start-ups, productivity and innovation. In recent years, many Europeans have taken great pride in a “Brussels effect”, the idea that the continent’s comparative advantage lies in shaping the rules of global commerce. Unfortunately, this badge of honour distracts attention from a “Brussels defect” — the complete absence of superstar companies since the birth of the internet.

There are many reasons for Europe’s sluggish performance: weak venture capital markets, fragmented research capabilities, low worker mobility and frustrated entrepreneurs. Public policy and attitudes explain the relative technological decline and lack of economic dynamism. Since the 2008 financial crisis, Europe’s growing share of zombie companies — those struggling to cover the cost of capital — has put a brake on dynamism by crowding out efficient businesses and start-ups. Expansive fiscal and monetary policy, weak banking reform and fragmented bankruptcy regimes are among the culprits.