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NewsMaterial2 min readDisconfirmAI Editorial

Harvard and European Commission Measurement Finds: Fragmentation of European Regulation Reduces Competitiveness in Complex Research Fields, with Exceptions Only for Green Tech and Semiconductors

Investment blogger Joachim Klement cites research by Balland et al. (2026) from a team at Harvard and the European Commission to explain how fragmentation in regulatory and funding systems across European countries undermines competitiveness by increasing collaboration friction, a disadvantage that amplifies as research field complexity increases. Measurements show the United States leads in complex fields such as AI, computer technology, and biotechnology, while Europe maintains an advantage only in the two complex fields of green technology and semiconductors.

2026-10-22 14:00 GMT+8

In an article published on October 22, 2026, investment blogger Joachim Klement cited research by Balland et al. (2026) from a team at Harvard and the European Commission, offering a structural explanation for Europe's technological competitiveness: the fragmentation of regulatory and funding systems increases cross-institutional collaboration costs, and these costs amplify as the complexity of the research field increases.

European countries have different regulatory rules and funding agencies. Klement points out that a researcher working in Germany attempting to collaborate with peers in Spain or the UK must navigate a jungle of institutions, rules, and regulations. In contrast, academic researchers and technology development enterprises in the United States face essentially one unified system of grant-making institutions and one unified regulatory framework.

The key is that this difference does not constitute an obstacle in research that can be conducted within a single institution. However, when research enters fields such as AI, quantum computing, and biotechnology, requiring increasingly more collaborators with diverse expertise, the fragmented institutional environment translates into actual collaboration friction. Klement concludes that the less fragmented research environment in the United States provides a structural advantage over Europe in complex fields.

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The research team led by Balland quantified this degree of fragmentation by measuring collaboration patterns in patent filings and scientific publications, and scored the complexity of various research fields. The measurements revealed a clear pattern: the collaborative advantage of the United States becomes more pronounced in fields with higher complexity.

Specifically, Europe holds a relative advantage in engine and pump technology, telecommunications technology, green technology, and semiconductors; the United States leads in medical technology, biotechnology, broader life sciences, and computer technology. Among all assessed complex research fields, green technology and semiconductors are the only two directions where Europe maintains a lead.

The study authors conclude that the high degree of fragmentation in the European research environment is becoming an increasingly significant obstacle in competition for cutting-edge research in the 21st century. For investors, this finding suggests that the institutional environment is a structural factor that needs to be considered when assessing the long-term competitiveness of European technology companies.

It should be noted that the study presents the correlation between fragmentation and competitiveness by measuring collaboration patterns and scoring field complexity; it does not claim that fragmentation is the sole explanatory factor.

Sources

  • klementoninvesting.substack.com↗
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