Europe is not less innovative. Many advanced machinery that makes everything else originate and get perfected in Europe.

EU is way more efficient in making citizen-friendly laws too.

The USA just likes to splurge unnecessary amount of money and call that "innovation" where there isn't any. They can do that because they have lots of money and infinite debt limit due to US Dollar's special status. This also makes everything else expensive for other players in the world. Remove the special status and see how the worlds change.