You are here: Home / News Release Archives / 2014 / February / International Business Professor Warns U.S. Against Writing Off Europe

International Business Professor Warns U.S. Against Writing Off Europe

In a recent contribution to International Affairs Forum, Penn State Smeal College of Business Professor Terrence Guay argues that Americans should attempt to better understand the complexities of the European region with the goal of adopting best practices in areas where certain European countries outperform the U.S.
February 25, 2014

In a recent contribution to International Affairs Forum, Penn State Smeal College of Business Professor Terrence Guay argues that Americans should attempt to better understand the complexities of the European region with the goal of adopting best practices in areas where certain European countries outperform the U.S.

Guay, clinical professor of international business, writes that though some European countries are struggling economically—Greece and Spain, for instance, have unemployment rates exceeding 25 percent—these situations are not typical of Europe as a whole.

“Most of northern Europe is performing far better than southern Europe, and even the U.S. Strong vocational training programs in Austria, Denmark, and Germany contribute to those countries’ enviably low unemployment rates.”

In fact, he writes, “Most of northern Europe is performing far better than southern Europe, and even the U.S. Strong vocational training programs in Austria, Denmark, and Germany contribute to those countries’ enviably low unemployment rates.”

In many European countries, manufacturing continues to play an important economic and employment role, unlike the U.S. where job losses in this sector have been an important contributor to increasing inequality.

Europe’s business performance is also underappreciated by Americans, poses Guay. On the 2013 Fortune Global 500 list, more European companies were included than American ones. Guay credits this to European firms’ long-standing focus on overseas business opportunities.

“European companies tend to be more oriented outside their home markets than is the case for their U.S. counterparts (in terms of revenues, employees, and assets), and that has served them well in an increasingly globalized world,” writes Guay.

Europe is also taking a different approach to preparing its workforce for increased economic competition. Among those aged 25-34, six European countries have higher rates of tertiary education (university, technical, and vocational training) attainment than the U.S.

In addition, over the past 30 years, the U.S. tertiary education rate has increased by only 1.3 percentage points. Many European countries, on the other hand, have devised policies to significantly increase the skill levels of their citizens.

“To the extent that a better educated workforce is a key component to a more competitive economy in the future, U.S. policymakers and business executives should be concerned about the implications for American workers, and be examining the methods used by European countries to equip so many more of their citizens with higher education in just a generation or two,” writes Guay.

“Rather than ridicule Europe, perhaps we should try to better understand why parts of that region are doing well, and attempt to adapt those best practices at home.”

Finally, from the perspective of the international community on a political level, though the U.S. does many things well—particularly compared with the world as a  whole—European countries outperform the U.S. in some key areas.

According to Transparency International, eight European countries place higher on the scale of least corrupt nations. Thirteen European countries place higher than the U.S. on The Economist Democracy Index. And, the International Institute for Democracy and Electoral Assistance reports, the U.S. ties for second to last among the top 25 countries for “functioning of government and ties for last among the top 25 countries on “civil liberties” and “electoral process and pluralism.”

Guay concludes, “Rather than ridicule Europe, perhaps we should try to better understand why parts of that region are doing well, and attempt to adapt those best practices at home.”

Recent News
Harrison to Lead Smeal's Sustainability Efforts 02 Sep

Terry Harrison, professor of supply chain and information systems and the Earl P. Strong Executive Education Professor in Business, has been appointed to lead the Penn State Smeal College of Business sustainability initiative. A strategic priority for the college, the initiative’s goal is to bring sustainability issues to the forefront across the areas of teaching, research, outreach, and operations.

Smeal Community Invited to Sign Honor Code 29 Aug

The Penn State Smeal College of Business community will have an opportunity to sign the Smeal honor code throughout the second week of classes. Signing sessions will take place on Sept. 2-4 from 10 a.m. to 2 p.m. in the Atrium of the Business Building on the University Park campus.

Smeal Student, Bitcoin Advocate Wins Trip to London Cryptocurrency Conference 27 Aug

Penn State Smeal College of Business student Patrick Cines will fly to London next month to attend the Inside Bitcoins: The Business of the Cryptocurrency World conference, thanks to a Twitter contest sponsored by CheapAir.com.

Students Learn Real-World Supply Chain and Sustainability Skills in Italy 26 Aug Students Learn Real-World Supply Chain and Sustainability Skills in Italy

This summer 23 Penn State Smeal College of Business students spent six weeks in Florence, Italy, studying supply chain and management from an Italian perspective with Norm Aggon, assistant department chair and instructor in operations and supply chain management, and Ron Johnson, senior instructor in management and organization.

Smeal Welcomes New Faculty Members 26 Aug

The Penn State Smeal College of Business welcomes more than 15 new members to its faculty this academic year.

More Recent News... More Recent News...