The EU has been struggling with a loss of productivity and slump in growth for almost two decades, while its competitors China and the US have surged ahead, taking the lead in innovation and retaining key industries.
Europe needs to grasp the opportunities emerging from changing dynamics of world trade in order to regain lost competitiveness, the president of the European Patent Organisation has told Euronews.
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Antonio Campinos said Europe has lost productivity and competitiveness over the last two decades, and at the same time has focused too heavily on designing regulations while paying less attention to driving innovation.
"We lost productivity when we compare ourselves to the Chinese and to the US," he said.
"We lost proactivity in the past 20 years," he told Euronews' The Europe Conversation.
In addition, Campinos said Europe's approach to developing new technologies is too risk-averse; stifling experimentation and new ideas, for fear of failure.
This is in sharp contrast to the approach taken in the US, according to Campinos, where fear of failure is not a factor when attempting to invent new products.
And it's this difference that's allowed the US to gain significant momentum ahead of Europe when it comes to emerging technologies including AI.
"We have a different risk appetite than the US, for instance. The US does not fear failing. Failing for the US is the first attempt to success," he said.
The European Patent Organisation has 39 members including Turkey and Norway.
It receives around 200,000 applications per year; a figure that is dwarfed by numbers from the US and China.
"If you compare to the US, which receives 600,000 application or China, 1.5 million applications," he said.
Campinos concurs with a growing consensus that European regulation went "too far" in one direction, without balancing the need to support inventors to create and stay in Europe.
"For instance, if you take our competition law or competition rules, they are there to protect free competition- that's a good thing. They are there to protect consumers," he said, adding: "Tell me, how many tech giants we have in Europe, in the IT area, for instance? How many big providers of cloud services we have, in Europe?"
However, he also believes some of the current instability triggered by a more protectionist America and the Trump administration's confrontation with its biggest markets over tariffs will bring opportunity for struggling Europe, if leaders and decision-makers are willing to grasp the moment.
"Necessity brings ingenuity and we're indeed in need, we are in deep need," he said.
"Humankind is never as creative as when it is in need and we are in need, the sense of urgency is there."
He says European stealth and size is key to its survival.
"We are strong in Europe. We are still a big economic powerhouse."
"And now with the geopolitical tensions, We might even have a strategic opportunity to attract talent, attract researchers, attract talented gifted people from the US to Europe," he said.
The EU's Draghi report on the future of European Competitiveness commissioned by Commission President Ursula von der Leyen called for annual investment of €800 billion in high tech sectors, and radical reform of regulation.
Draghi also warned Europe could die a "slow and agonising death" if the slump in productivity continues to go ignored.
Campinos agrees with the need for Europe to invest more at home and retain European startups.
"The Americans have a logo. They say, invented here, produced here. So we have to start thinking the same way. What is invented in Europe needs to be produced in Europe," he said.
Trade tensions and Trump tariffs mean Europe must diversify into new markets as well as continuing to trade with China, according to Campinos.
"We can't rely now exclusively on the US to protect us or to trade with us. We need to diversity our partnerships."
Europe needs to "expand our free trade agreements with natural partners".
"I would say Canada, for instance, Mexico, so north of US, south of US and obviously China," he said.