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
Businessweek ranks Smeal MBA Program No. 2 in ROI 17 Nov

The Penn State Smeal MBA Program ranks No. 2 in return on investment according to the latest Bloomberg Businessweek rankings.

Smeal Names Four New Members to Its Board of Visitors 31 Oct

The Penn State Smeal College of Business has named four new members to its Board of Visitors. Joining the board are Jon Grosso, ’89, executive vice president and director of stores for Kohl’s Department Stores; Ron Morgan, ’93, co-founder of MorganFranklin Consulting; Stephen Reeves, ’81, executive vice president and chief financial officer of Enviva Holdings; and Salomon “Sal” Sredni, ’87, chief executive officer of TradeStation Group, Inc.

Deysher Named Alumni Fellow by Penn State Alumni Association 27 Oct

Bryon Deysher, a 1977 graduate of the Penn State Smeal College of Business, was one of 21 Penn State alumni recognized in early October as Alumni Fellow by the Penn State Alumni Association. Deysher is president and chief executive officer of Methods Machine Tools, Inc. and a member of the Smeal Board of Visitors.

Price-Fixing Whistleblower and FBI Informant To Deliver Shoemaker Lecture at Penn State 15 Oct

Mark Whitacre, the corporate whistleblower who revealed price fixing at Archer Daniels Midland (ADM) and spent more than eight years in federal prison for tax evasion and fraud, will deliver a lecture entitled “When Good Leaders Lose Their Way” from 6 to 7:15 p.m. on Nov. 6 in 100 Thomas Building on the Penn State University Park campus.

Penn State Executive Programs Receives Gold Award for Junior Achievement Partnership 14 Oct

For its work with Junior Achievement USA, Penn State Executive Programs has won Chief Learning Officer magazine's highest executive education partnership award. The 2014 Gold award for Excellence in Academic Partnerships recognizes academic institutions that have partnered in the past year with an organization to teach its employees about a key business issue.

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