Economic growth in Europe may stall for the next 25 years if political leaders fail to grasp the nettle on investment in controversial technologies like genetically modified food and shale gas, a prominent academic has warned. Urging European nations to be prepared to adopt the same leading-edge scientific advances that were being pursued in other parts of the world, Professor Douglas McWilliams - also chief executive of the Centre for Economics and Business Research think-tank in the United Kingdom – said: "Cheap energy is starting to fuel what could potentially turn into a new industrial revolution in the United States while GM crops are accelerating the spurt in growth in Brazil that has helped the country overtake the UK to become the world's sixth largest economy.
"If we in Europe stand back and don't use these new technologies, we will fall even further behind." Speaking at Gresham College in London today, as part of a public lecture series, McWilliams predicted that average world economic growth would be limited to between 2 and 3 per cent annually over the next two and a half decades; with Europe trailing behind Asia and other western economies. He insisted that economic growth in Europe would bumble along at just 1 per cent a year, if policy-makers chose to ignore advances like GM and shale gas due to ethical and environmental concerns.
Explaining the additional causes behind this potential stagnation, McWilliams pointed to the euro currency and its debilitating effect. "Whatever the underlying economics of the euro - trying to introduce it at a time when the west is losing competitiveness against the east, when Europe in general is losing competitiveness against the rest of the west and when southern Europe is losing competitiveness against northern Europe is, to put it mildly, difficult.
"We don't know how the euro problem will pan out but as things stand there seem to be two possible choices – either very slow and possibly negative economic growth as the uncompetitive economies try to adjust by internal devaluations - cutting wages and so on - or the disruption to banking systems and other institutions that would result from a euro break-up and the consequent defaults."
In a previous article for PublicServiceEurope.com
, McWilliams wrote: "In 1980, the European Union - as currently constituted - was 34 per cent of the world economy. This year it will be only 22 per cent and by 2020 it will be, according to our research, about 15 per cent - with the largest European economy, Germany dropping from fourth largest in the world in 2011 to seventh largest in 2020."
Addressing the global picture, the academic claimed that the biggest constraints on world economic growth were likely to be shrinking water and mineral supplies – due to a lack of investment in by major companies. These issues could dramatically damage global supply chains, transport infrastructure and food production – it was suggested.