On November 28th, 2019, the Dutch business man and author Dr. Donald Kalff held a lecture in which he spoke about his recently published book “Hidden Treasures: Mapping Europe’s sources of competitive advantage in doing business” (together with Andrea Reda). The event took place in the Berlin office of our company member EY that kindly hosted the event.
According to Kalff, the competitive advantage of European companies lies in their contract design, the multitude of possible business models through the European Patent Office and the multitude of SMEs compared to large companies.
Unlike in the USA, the loyalty obligation within the EU is anchored in the law. Appropriateness and fairness are regarded as guiding principles. According to Kalff, the Union thus has a clear advantage over American, British and Irish rules, which treat the loyalty obligation only within the framework of existing treaties. This situation in Europe also facilitates the outsourcing of innovations by large companies, which are increasingly dependent on the cooperation of several partners: Investment in partnerships to optimize value creation.
For the improvement of the EU economic system, to “strengthen the already strong”, Kalff recommends a modern civil law, the establishment of specialised courts for IT and AI solutions, an improvement in the quality of legal advice with improved access for SMEs and investment in decentralised, European mechanisms for conflict resolution.
According to the author, the orientation of the financial markets must change. Shareholder models are too geared towards control and risk transfer and thus inhibit innovation. In an international comparison, the profits of listed companies in the EU with favorable conditions such as low tax rates and low inflation are not sufficient.
Using further comparative examples from the legal, capital and value systems, Kalff showed why Europe was never in a better position to develop its own competitive form of capitalism and thus set standards for the rest of the world. Several examples can be found in his book.
Many thanks to our corporate member EY for the premises.