I always find great investing insights in Steve Eisman’s weekly wrap, but on why Europe lags behind the U.S. in innovation I respectfully disagree with his analysis.

People often point to regulation as the core issue. That’s the intuitive explanation, not necessarily the correct one. Regulation is more a symptom of a deeper problem: Europe’s culturally conservative attitude toward risk and failure, and the resulting lack of access to capital.

In the U.S., failure is part of the entrepreneurial learning curve. In Europe, failure still carries a stigma — if you try and fail, every next move is treated with skepticism. That mindset influences everything:

• access to funding
• willingness to take risks
• how large companies view startup experience
• the ability of founders to try again

In the U.S., people coming from startups are seen as assets. In much of Europe, they’re still seen as outliers.

This risk aversion translates directly into economics:

less tolerance for failure → less capital → fewer scale-ups → fewer global innovators.

Studies from the OECD, GEM, and the European Investment Bank all point in the same direction: Europe isn’t short on talent or ideas. It’s short on appetite for risk.

Europe has the tools. Too often, it just lacks the culture and the capital to use them.