When an American Internet merchant like Jeff Bezos joins Charles Lindbergh and Winston Churchill in the pantheon of TIME's Men of the Year, it's all too easy to assume that the economic future belongs exclusively to the U.S. and that Europe will become a quaint museum dependent on tourism and some luxury niches for its livelihood. Too easy--and wrong. While the Old World is still bedeviled by archaic habits and practices, it enjoys a global lead, possibly unsurpassable, in certain sectors that are at the heart of the technological revolution.
Take the mobile phone. If it's impossible to sit in a Milan cafe without being drowned in competing phone conversations, the reason is not only that Italians like to talk. European wireless technology is simply more sophisticated and user friendly than that in the U.S. Europeans can already check e-mail and get news bulletins on their cell phones, and soon they'll surf the Net and shop online from mobile phones that double as fashion accessories.
Another increasingly ubiquitous, albeit less visible high-tech object is the smart card. Many a European wallet now includes one or more cards embedded with a memory chip, which may hold anything from a cash balance to be spent on small purchases to personal information that reduces the possibility of credit-card fraud--or even, as in France, a complete medical history. Three French companies produce more than two-thirds of the world's smart cards, a $12 billion business set to explode as companies discover the limits of the familiar magnetic-strip card, which can hold relatively little information and is not nearly as secure for e-commerce. Jean-Marc Giry, vice president for strategic marketing at Gemplus, one of three French firms that dominate the world market for smart-card banking applications, expects most U.S. banks and credit-card companies to begin issuing smart cards this year.
Then there's Airbus, long ridiculed by Boeing as a massive pork-barrel project for second-rate aircraft manufacturers. Last year the European consortium captured 55% of global-passenger jetliner sales, outflanking Boeing for the first, but probably not the last, time. Competitive prices and superior salesmanship are factors in the success of Airbus, but so is technology. Airbus beat Boeing to the market with computer-laden "fly-by-wire" technology, which, it says, enhances safety while lowering costs. The flying experience is so similar from model to model that Airbus-equipped airlines save millions of dollars in training costs.
The common thread in these examples is a uniquely European approach to business. While the U.S. has embraced the pure marketplace with ideological fervor, Europeans continue to believe the state has a role to play in guiding markets. Exhibit A is the GSM (global system for mobile communications) standard introduced in the European Union in 1991. Thanks to GSM, a subscriber in Portugal can use her phone from Ireland to Hong Kong. The U.S., in contrast, still allows various incompatible standards to compete like trains running on tracks with different gauges. As a result, a New Yorker cannot use his cell phone in London and, depending on his carrier and his instrument, sometimes not even in St. Louis.