In order to create a more dynamic environment for start-up companies, Europeans must be willing to take risks and accept that doing so inevitably will lead to some failures, economist Lester Thurow said at the International Data Corp. (IDC) European IT Forum in London.

Fear of risk is evidenced in the European job market, where there is scant demand for veteran workers who have reached the middle of their careers, indicated Thurow, a professor of management and economics at the Massachusetts Institute of Technology (MIT).

"In Europe, there are very few job openings for 40-year-olds," Thurow said.

As a result of fear of risk, Europe is behind in technology, he said, generally agreeing with fellow MIT professor Nicholas Negroponte, who also spoke at the conference - see previous story. [Risk is emerging as a central theme at the conference, with Thurow and Negroponte focusing on that topic and its importance.

In the US, corporate executives believe that even if a start-up venture fails, there is a future for those who took the risk to begin the company. But in Europe or Japan, those who took such risks and did not succeed would be viewed only as failures, Thurow said.

"And in Japan, you are literally expected to commit suicide" if you fail, he said.

The key for countries to survive and excel in the new economy depends on their willingness to tear down the old to build the new, and many countries still aren't willing to do that, he said. "In Japan, there is no place for a 40-year-old to go if he gets fired; that's why Japan won't tear (the old institutions) down," he added.

During the '90s, as a consequence of risk fears, the corporate statistical landscape has shifted. In 1990, only one of the 10 largest firms in the world was in Europe, while seven were in Japan, Thurow noted. Eight years later, the same company in Europe remained in the top 10, while none were in Japan. The US had two of the 10 largest companies in 1990, and by 1998, had nine of the top 10, Thurow said.

AT&T had one million employees before it was broken up; afterwards it only had half that, he said. "That's why Deutsche Telekom won't do it; it would cost the jobs of half of a million people," he said of the German telecommunications carrier's unwillingness to "cannibalize" itself by also splitting up.