Europe risks becoming a "second- or third-world region" within a generation because strict labour laws are preventing companies from restructuring properly, according to the author of a Government-sponsored report out today. The study "i2010 - Responding to the Challenge" criticises large European countries, particularly France, Germany, Spain and Italy, for not having the courage to reform archaic labour laws. David Lewin, who co-wrote the study, said that after decades of productivity growth, European countries were falling behind the United States because of a lack of investment in information and communication technology (ICT). Mr Lewin warned that without more investment in ICT then "Europe will lose the technology and fall behind and become a second- or third-world country within decades". Companies in Europe had to pursue a policy of "creative destruction" to change the way they do business and learn from the "hire and fire" culture of the US to compete with emerging Asian companies. Mr Lewin added: "It is all down to employment law. In the US if you are made redundant three or four times that is normal, but in Europe there is a stigma."