The catch, of course, is that the expanded knowledge economy will then need highly qualified human capital. Certainly the intellectual capital element of the equation is exercising business minds in Europe. The World Investment Conference (WIC) in La Baule, France, running on 4-6 June, has this year taken the title Brainpower in Europe: the driver for growth. Seeing its core role as attracting investment, talent and innovation to Europe, the WIC is focusing on the “brain power value chain” – including R&D, innovation strategies, training, communications and design – that will make Europe more attractive and competitive.

Among the presentations, Ernst & Young will be detailing the results of its global survey of some 800 CEOs, measuring their perceptions of the relative attractiveness of global economies, and their plans for investment. Marc Lhermitte, a partner with Ernst & Young, says that the survey turned up one rather surprising result: while the need for greater investment in higher education is a constant refrain, the survey respondents also put considerable stress on the need to get the message across in pre-university education. The thinking, he says, is that the innovation and technological changes driving the knowledge economy are not only happening within companies, but are actually impacting every-day life. “The CEOs were clearly looking for a big push in helping people feel more comfortable with the massive changes taking place, and with a culture of innovation, by ensuring that the education process begins with our young people.”

The need to understand the culture of innovation, and the new approaches it demands of working practices, may well be another contributing factor to the discrepancy between job creation and productivity figures in the European knowledge economy. In the US, for instance, an equivalent expansion in employment has been accompanied by acceleration in productivity growth.

“The favoured explanation,” says Brinkley, “is that the US has been better at combining investment in new technologies with work organisation and human capital, to get a better productivity performance.

“But it’s also a question of scale – the US has the advantage of having a big, unified domestic market, and although Europe has moved in that direction, the market is not as mature, and there are still significant barriers in such areas as services. Indeed, it has been argued that European economies have been less successful because they’re seen as being more heavily regulated.”

Benoit Reillier, a director with global economics advisory firm, LECG, agrees that bureaucratic restrictions in Europe are often perceived as a block to successful innovation, but also points to a conundrum: “The Nordic countries – Sweden, Denmark, Norway and Finland – have certainly invested heavily in their information and communications [ICT] infrastructures, and have very high-quality human capital, but they also have a fair number of regulations. Yet they still produce a good, sustained underlying productivity. Perhaps it’s the quality of regulations we should be looking at, rather than the quantity.”

The need for investment both in an effective ICT infrastructure and a highly qualified workforce, as well as the willingness and ability to innovate, are the recurring themes in any discussion about successful knowledge economies. So, are the questions about Europe’s ability to maintain – and improve – its current position in the world knowledge economy also rooted in that old chestnut about a lack of entrepreneurial spirit? Certainly Reillier notes that further cultural changes are still needed. “There is a view that risk-taking is not seen as a core value in Europe. And there’s no doubt that, not so long ago, the model in France, for instance, was very much along the lines of ‘if you give me a job for life, irrespective of how I perform, why should I take any risks?’ “

But Brinkley questions the perception that the US, for example, is more entrepreneurial in its attitude than Europe. It’s more a matter of funding, he says. “Europe has much less-well-developed venture capital markets than the US. So if you’re a fast-growing innovative firm, access to venture capital is pretty critical. And if the only place you can get it is the US, then that’s where you’ll go.”

And while the entrepreneurial spirit is demonstrably alive and well among the new entrants to the EU, Brinkley does not believe those countries will be challenging the more mature European economies’ knowledge industries any time soon. “There’s clearly going to be a good deal of general enterprise in those countries because they’re moving away from their old economies. But they still have a very long way to go before they catch up to the Western knowledge economies.”

So in Europe, the knowledge economy baton is pretty firmly grasped by the Nordic economies, and still held on to by many of the Western countries. But their position is far from secure in the long term if they continue to baulk at the substantial investment needed in higher education, or are unable to shift their cultural attitudes towards the opportunities offered by growing globalisation.

“The bottom line,” says Brinkley, “is that a highly educated workforce and world-class science base, means you hold on to your R&D. High-tech industries will put their money where they believe centres of excellence and specialisation are. If those are not in Europe, then they’ll put their money elsewhere.”