The American Challenge

Servan-Schreiber, a French journalist and politician, wrote in 1967 that American corporations were taking over European industry, and that within fifteen years the third industrial power in the world, after the United States and the Soviet Union, would be American industry in Europe. The book sold enormously and shaped European industrial policy debate for a generation.

His diagnosis was that the American advantage was not capital, technology or natural resources but organisation and management. He pointed to American investment in higher education, to the size and integration of the American market, to management practice that promoted on merit and delegated decisions, to the willingness to fund research over long horizons, and to the connection between government spending, universities and industry that produced computing and aerospace. He argued that Europe's fragmentation into national markets, its state-protected national champions, its rigid educational hierarchies and its family firm governance made it structurally unable to compete.

His prescription was European integration, large-scale investment in education and research, and the creation of genuinely European companies. He was largely right about the diagnosis of the moment and wrong about the trajectory, since the American corporate advance stalled in the 1970s, Japanese firms became the competitive threat, and European integration proceeded on a different basis than he proposed. The book is worth reading now as an example of a confident structural forecast that failed on timing and identity while being accurate about the underlying mechanism, and because the same argument about organisational and educational advantage recurs in every subsequent technology competition debate.