New Delhi, Oct. 15 -- Europe faces a productivity crisis. Over the past quarter-century, its labour productivity has risen only half as rapidly as that of the US, widening the gap between American and European incomes. Thanks to higher public expenditures, stronger labour-market institutions and superior safety nets, the benefits of European economic growth are better distributed. But without improved productivity, European economies and democracies will remain at risk.

That's why European leaders have been sounding the alarm. Mario Draghi, former president of the European Central Bank who authored an influential 2024 report on European competitiveness, calls the productivity imperative an existential challenge.

To focus attention on th...