Why German companies fail at digital innovation
global.handelsblatt.com
global.handelsblatt.com
Pardon my German, but that is utter and complete Büffelscheiße on multiple levels. Firstly, how does data protection and privacy law prevent you from using those tools? Secondly, the German law in these matters is not a hindrance to innovation, that is a lame excuse: If the only business model you can come up with is grabbing as much data as you can and then sell it to advertisers, that is not innovative at all.
I think the problem more has to do with a general resistance to change that is very common in German companies and public institutions. "Was der Bauer nicht kennt, frisst er nicht", as we say in Germany ("What the farmer doesn't know, he won't eat"). Large institutions and bureaucracies develop a huge inertia as they grow. The three rules why things do not change: 1. We have always done it like this; 2. We have never done it like that; 3. Once we change this one thing, where does it lead to?
I can definitely confirm this! Being a foreigner in Germany, a country I've come to love very much, has been eye-opening in this regard.
Never in my adult life have I observed such an obvious, visceral, inexplicable, omnipresent fear to change. It's awe-inducing, really.
Alas, it is perhaps the only thing keeping one of the things I love about Germany: it's café culture.
However, I can also understand those who are highly skeptical of "innovation" and "change" in general. Some of us just plain suck at explaining our ideas and creating the kind of logical, reality-based enthusiasm that gets Germans on-board.
Companies do use Slack and other similar services
Digital innovation is happening in a lot of sectors. Healthcare and others have privacy concerns that turn a lot of 'efficiency' dreams on their heads.
Compared to other tech companies, it took us longer to adopt Slack on the company scale, but mostly because Slack was lacking an on-premise solution until recently.
However this depends on the scale and type of company. In practice many smaller companies don't even have a Betriebsrat despite fitting the requirements. I'm also sure not everyone is aware of the details of legal requirements around privacy if it isn't the core of their business and some are even blatantly unaware of basic labor rights.
Smaller companies experiment more, but investors are equally risk-averse so they tend to prefer startups that are cashflow positive (as opposed to Silicon Valley's growth mindset) or that follow tried and true business models. So a lot of innovation has to be bootstrapped or rides on the back of existing companies -- the product company spun out of an agency seems to be a fairly common.
But all in all I'd say if something is holding German companies back from innovating it's the risk aversion, not the privacy laws. The strict privacy laws actually creates a market for domestic solutions to problems solved by US companies with no regard for privacy (i.e. nearly all of them). Sure, it makes certain business models impossible but many would say that's for the better -- many problems actually end up not being impossible but simply requiring less obvious solutions than blatantly violating your customers' rights.
And looking at the German economy, especially in contrast to other European countries, I'd say calling it a failure is incredibly dishonest. Risk aversion may limit innovation but it also creates a strong healthy economy that is incredibly stable because it rests on a large number of medium sized companies rather than a small number of unicorns and a constant Cambrian explosion and mass extinction.
> Apparently German employers don't understand basic economics. Their ignorance is jeopardizing the whole economy, according to the DIHK Chambers of Industry and Commerce.
[0] http://cepr.net/blogs/beat-the-press/reuters-says-german-emp...
The drive to cheap instead of good is what's holding a lot of us back though. Engineers are still seen as a cost instead of something which can (and does) earn money. But bad (and cheap) engineers cost money.
You can have very high prices and still insufficient supply. The prices are supposed to attract supply; but e.g. when a country is not seen as being welcoming to immigrants (or, in fact, has legal restrictions in place) the only flex is in people training/retraining, which is a many-years response to an immediate problem.
I do agree the more hip ones are in Berlin, and maybe Hamburg - but I'd still say your statement is unfair, if not taken in the context of lack of "good tech companies" in Germany overall.
This comes however with increased risk, as the contracts are usually limited to 6 months, and because of "Scheinselbstständigkeit" (appearing to be employed, even though you are contracted out to your own company, or DBA) companies are prohibitted from prolonging those contracts, unless they want to pay horrendous penalties.
All is good and great, I understand why those laws were put into place (mostly to protect unskilled workers, like drivers or manufacturing line workers from being forced to sign more beneficial - to the company - contracts instead of work agreements), but the software engineers, with the employment gap will in most cases easily find a replacement job somewhere near, yet the companies necessarily undergo a brain drain, and the know how gets leaked out.
Just imagine, you need a couple of weeks to be able to actually productively add features to the product, then take a bit time off, some workshop, a ton of meetings, and basically your 6 months are off, and unless your client is willing to take the risk, your starting your offboarding - just mabye transferring all that you had learned in the meantime to somebody else.
When I started out freelancing I thought consulting agencies were actually viable so I applied to various projects posted by them. Every single time I ended up turning them down because the contracts they'd send me would effectively mean I'd no longer be able to seek clients myself out of the fear of violating the non-compete clause (unless I'd always ask every client "have you recently signed a contract with this consulting agency") yet I'd have no guarantee of actually winning the contract, they'd take a massive cut of my hourly rate, they'd force me to accept payment deadlines of up to three months (my normal limit was 14 days) but I'd effectively get none of the benefits of a regular employee other than having them as a mediator (assuming they'd ever not side with the client).
Being a software developer I was able to reject those offers and instead seek out clients myself. But for many people in less fortunate skillsets this is the kind of crap they have to put up with, especially with companies offloading more and more of their workforce into these agencies to make it easier to hire & fire people as needed. Because they're not regular employees and union contracts and salary laws don't apply, many of them earn well below minimum wage (if they can find contracts at all) and need welfare to "top up" to the same level as someone without a job at all.
A lot of the laws at the time needed fixing but this was a blatant attempt to reduce the unemployment stats without actually helping people. I'd say because it actively obscures the issue without solving it it has actually things worse for the people affected.
[1]: The two major parties in Germany are the left-of-center SPD and the conservative centrist/right party CDU. The current chancellor, Merkel, is a member of the CDU and the government consists of a coalition between the CDU and SPD. The government that passed the labor and welfare reforms consisted of a coalition between the SPD and the Greens, with the chancellor Schröder being a member of the SPD. Many had voted for the SPD at the time hoping for a more left-leaning government, which eventually resulted in a mass exodus of SPD members forming their own minor party which eventually joined the far left party "Die Linke" (the left).
(Holland)
What I miss in germany, is developers of ability, sharing their experience in public. Whenever I look for inspiration/learning/ressources, it's guys like Robert C. Martin, Martin Fowler or Kent Beck with the best material.
I can't believe that our country doesn't have a few of such minds, too.
I've been in situations like the one you describe, where I'm one of many developers and share my knowledge. I've also been "the developer" in companies that have no permanently employed developers or no interest in sharing knowledge. I've also interviewed at companies that had effectively outsourced their entire development to another company (with the team working on-site full time but being employed by another company who would rent them out for jobs like these).
These companies often relied on their code as a critical part of being able to do business. Some of them were literally software companies. Yes, it's shortsighted and obviously a bad idea but companies operate like this, especially smaller companies that think they can reduce financial risks by hiring freelancers even if they effectively overpay compared to what a salaried developer would cost them.
Short term business decisions, like outsourcing, may indicate a need for higher liquidity within an accute financial situation (which is common for small companies). I think most managers know the longer term risks, but are somehow forced to do so.
However, I see us "software people" in charge to change the situation, by insiting on disciplines, like knowlegde-sharing, proper testing, etc. Maybe germany needs a better IT-community...
Go to a meetup and you'll see some examples of that
But about the names mentioned, I see some good ideas but mostly empty words and "religious rituals" touted by them
Also freelance taxes are not so much better than regular ones. Usually at the end of the year I take holidays, just because I know that if I earn more, my profit will be deducted by the taxes.
This is a double-penalty. First you "take the risk" of being on your own and second after around 60k [1] income 1/3 of what you earn goes for taxes, so you can't "save money for rainy days". At this point is becoming demotivating and you better take some months off.
1: https://en.wikipedia.org/wiki/Taxation_in_Germany#/media/Fil...
Other things I often hear:
- "They probably monitor how often you go to the arcade!" (usually followed about how they were in the opposition in the former East)
- "So who usually tells you what to do?" (they don't get self organizing teams or lack of hierarchies)
- "So how many hours a week do you usually work?" (they vastly over-estimate that)
- "This is all nice, but they just want to stay at work longer!" (after I told them my usual hours)
They are all reasonably nice people, but it's somewhat demotivating to see who actually runs Germany and how little they understand about other parts of the world. Maybe the visits help.
If your life goes wrong, due to illnesses, unforeseen circumstances or unemployment, or if you plan to have a family, you're better off in Germany than in silicon valley with 160k.
Am I going to benefit from these as a foreigner not fluent in German language and having trouble navigating the bureaucratic maze of public healthcare and social support? My impression is that even the natives can get confused (see number of homeless and mental people on the streets or occupying the transport infrastructure).
There aren't that many in Germany, comparatively speaking.
Basically nobody here will be able to avoid the healthcare system.
This means when you don't speak German, you are mostly limited to work in projects where English is possible or the default - there are jobs like this, but this is actually limited.
I've met persons who were ten years in Germany and were not able to do a general conversation in a job interview in German. I would not hire them - other than for specific projects/tasks where that would not be a problem.
There are many edge cases which _do_ get more complicated, as (public) health insurance premiums depend on your reported salary. Let's say you have different income streams from different countries, have to pay alimony but also support your parent financially.
Well, one thing. When your doctor writes you off sick, you get three copies of the sick note: One is for you, one is for your employer, and one is for your insurer. You get all three copies (they're carbon copies of the same form), so you have to mail the latter two. (The version for the employer has all the medical details blanked out.)
I do agree with the first grade medical card and the general cheapness of the country.
COBRA covers your health insurance if you're fired, for up to 18 months or so. You do generally have to pay premiums on it.
The US has free healthcare for people without an income. If you're making the federal minimum wage, you qualify for free healthcare via Medicaid in every state (someone correct me if there's an exception).
The US has numerous government healthcare assistance programs for people that are in some kind of bad position.
Nearly half of all healthcare coverage in the US is public healthcare at this point, not employer sponsored.
The numbers are bad enough to not need pushed higher artificially frankly. It's closer to 1/4 of all bankruptcies having been impacted by medical bills (2011 Northwestern study indicating 26% of all bankruptcies are partially - not solely - caused by out of pocket medical costs).
There are roughly 288 million people in the US that have health coverage.
The medical bankruptcies you're referring to affect less than 1% of the adult US population across ten years. Among that 1% are common repeat medical bankruptcies, so the number is in fact even smaller.
If you look at the total number of bankruptcies in 2016 - 770,000 - and the share of those that were entirely caused by medical bills, you're probably talking about 100,000 to 150,000 (out of ~250 million adults). The ACA, it is speculated, has improved the medical bankruptcy numbers since its 2010 passage, and the economy has improved dramatically since 2010-11.
Is it terrible? Yes it is. Did you expect me to say otherwise? However it does in fact affect a small portion of the US population. It's obvious that if you could pick a few things to change about the US financial system, one would be to be able to more easily discharge medical debts.
Yes, that part is mainly relevant when comparing net income.
> Also, I might be mistaken but only 20 vacation days are required by law and I have 24 days currently.
You're right, but 24 is really low. 28 to 30 are very common.
Edit: fixed no. of days
> § 3 Dauer des Urlaubs > (1) Der Urlaub beträgt jährlich mindestens 24 Werktage.
https://www.arbeitsrecht.org/gesetze/burlg/
Edit: I was wrong! Working days are Monday to Saturday. If you only work 5 days per week you only have 20 days per year.
I have friends working at agencies where unpaid overtime is the norm. I also have friends working in industrial jobs where they complain when they have to work 40 hours (rather than the normal 35) and every hour of overtime is merely compensated at 200%. Oh and he made a pretty decent wage straight out of school.
Talking about "privilege" in this context creates the false impression that all IT workers automatically have it better than traditional industrial workers in every aspect.
Unfortunately with the decentralised IT industry, having the same benefits it's just a matter of negotiation. On top of that the amount of taxes that you pay for having "cheap" country to live in always averages those benefits.
Having a family here would be great as well, if they don't charge me a percentage of my income for kindergarten [1], a percentage of my income for health insurance, a percentage of my income for religion tax ( happily I'm an atheist ). Those all sound fair for low-skilled jobs, but not so much when you are heavily in demand IT-person ( the tax-bracket is too steep ).
1: https://www.expatica.com/de/education/Preschool-in-Germany_1...
Also it's important to point out that if you are a faithful member of one of the religions that enacts a church tax, that money goes to that church rather than to the state (who just collect it for the church, free of charge). So presumably you actually want them to get that money and are fine with the tax (although in practice most "believers" in Germany either opt out of the tax or complain about it because they're unhappy with the institutions of their religion).
AFAIK it's only the Catholic church and the Evangelical church who've done the necessary paper work and formed public bodies on the national level to be eligible to receive these taxes from self-declared members of their church. There's a small Muslim group that has managed to do this in two states but they're a minority sect (in Germany anyway). I guess for most religious groups it's just too much of a hassle compared to collecting money directly from church-goers (or mosque-goers for that matter).
Also do you remember that this costs you 40-50% of your salary? http://www.parmentier.de/steuer/steuer.htm?wagetax.htm
With the same amount of money you can get a normal private insurance in other countries that bring you a golden spoon.
and if you are not german or eu citizen, second part is also not valid. so qualified immigrants can't feel secure here. so berlin is a stop for me until i find some better place, not a city to settle in with my family and future kids.
From an inside perspective I can assure you they're shitting their pants. But they also don't know why they want digital innovation. It's pure buzzword bingo.
I've worked in the UK, where a history graduate can learn to be a derivatives trader. An engineering grad can with little problem get a job coding software (I did both of those jobs with a MEng).
Contrast that with my experience in the Germanic world, and I found the only place that ever asked for my degree certificate. My German friends have degree titles that are pretty much their job titles. I met people who were out of work, and when asked what job they wanted, they responded with a pretty narrow range of jobs fitting their degree.
Recruiters also seemed to take buzzword bingo more seriously, whereas London recruiters seem to be happy to put forward someone who says c# is like c++. Not without its own issues, but if you have a skills shortage, maybe take someone who is close enough?
That job has been open for almost a year now, I wonder why.
They will gladly pay :
- 10k for missed opportunities ( I've seen companies looking for devs for more than half an year )
- 10k for a recruiter
- 80k for the employee
Not to mention I've seen consulting companies "renting" good freelancers to conglomerates, for double the price of what they are paid.
And the consulting companies business is huge here. They're paying more even than for internal employees.
I would say large parts of this is cultural. Germans are not so quick to hop onto new things and are suspicious what problems new technology brings, especially with regards to privacy and 'Datenschutz' / data protection. Swedes on the other hand love new things and with a national number given out by birth privacy is not that big of a deal.
German companies also have a large accessible market of German speakers (~100 million) so the need to go global is not as acute as for companies from smaller economies.
Oh! Found a Deutsche Telekom representative!
Is it wasteful? sure, but who cares if it allows you to try random stuff you would hesitate about otherwise?
Its like "we need more car companies, lets build more roads". True to an extend, but there are so many other factors.
And the Telekom is not alone with wanting support money from everyone. The southern Rheinland saw multiple providers wanting to connect villages for huge prices, which leads to the weird situation, that southern Rhineland now gets support from a Swiss company. That company doesn't need any money and is still laying fiber through the woods to long forgotten villages.
Compare that with most other European countries, where you can get a fiber connection for the same money with synchronous 100Mbit/s or more. The northern countries with their hard rock grounds did get it working in a much better way than Germany.
And don't rely on LTE, as the LTE tarif were bound to lower GB/month traffic limits and huge costs, as the LTE frequencies were auctioned of between the providers. And the winners couldn't build where they wanted, they had to provide LTE at first where there was no mobile internet available at all, which means on the acres.
Germany is in a sad state in regards to connectivity. And this has nothing to do with people being afraid. If you let the monopolist do whatever it wants and not enforce the modernization, then this is what you can expect.
How about, say, 20-30Mbit/s upstream and long-lasting IP addresses? A couple of people on WebRTC conferences can easily use >10Mbit/s and the conferences work best if noone's IP address changes in the middle.
- ability, willingness, etc to tweak and upgrade your infrastructure
- how competition-friendly and pro-consumer your market is - the type of grants, contracts and industry ties your environment has (think special, prototype, maybe even government subsidized hardware, for example)
- reflects the amount of mastery over geography or nature itself - this is what successful countries pull
- is the economy market-driven or just a pocket bubble?
There might be others, but this is already quite damning imo. Also I need gigabit because that determines the size of my erection and i'd go to lengths such as paying FAIR prices for it.
As a citizen of the United States, I wish my country valued privacy 1/4 as much as Germany.
To put it in terms foreigners might be able to relate to:
BND = CIA
BKA = FBI
BfV (Verfassungsschutz) = NSA
The BND is the German intelligence service and primarily tracks threats outside Germany. The BKA mostly just coordinates investigations at the national level (it's a lot more hands-off than the FBI). The Verfassungsschutz monitors domestic threats.
The Verfassungsschutz also infamously completely missed the existence of the far-right NSU terrorists who happily comitted a number of attacks and bombings which went unnoticed because of victim-blaming ("A Turkish fast food joint was bombed? Must have gotten involved with the Turkish mafia."). The Verfassungsschutz also later interfered in an investigation against itself by accidentally destroying evidence.
So if you still have difficulties telling them apart:
BND = unaccountable spies
BKA = federal police that doesn't really do much policing
Verfassungsschutz = really bad at hunting nazis
It's "Störerhaftung". I tend not to be picky about these words, but "Haft" (imprisonment) and "Haftung" (liability) is a huge difference.
Everyone wants to innovate, I've got orders directly from the board on these topics, everyone in top and middle management is on board, wants to innovate, there is a lot of tailwind, but in the field they are squashed by the success of their main products and by time constraints maintaining their cash cows.
Many expect ROI much too early. I tell them look at startups, VCs and exits, these are the time frames to expect success (up to 10 years). But if a new project doesn't make enough money in 2 years it is often killed or seen as a career killer being on board.
I have to disagree with all points.
1) Maybe true - but lots of exceptions exist as far as I'm aware (based on friends/social circle). Yes, there's some overhead, but not staggeringly so.
2) Oh my god.. Sure.. That would _certainly_ increase productivity. Give me Mail over Something-Like-IRC-But-Worse any day. Yammer seems popular around here right now and is shit, plain and simple. Slack has no value for me. If these tools are missing I'd say that's something Germany does right?
3) Fiber optics are uncommon unless you're lucky (say, Cologne has decent options). But broadband is very common. Falling at innovation seems a tad exaggerated.
4) We have good CS programs. Schools tend to be worse (sometimes far so) as far as I experienced and heard, but universities are quite okay. Otherwise .. this is basically the general "big market, not enough people" problem that HN confirms for more or less any country as soon as the "Working in $country" comes up.
Seems .. not just an opinion piece, it seems wildly inaccurate to me. Or to put it more politely: The author's and my ideas of digital innovation or failure thereof don't quiiiite align.
I do believe that Germany has issues, mostly governmental (setting up a company, taxes, bureaucracy) and there _is_ a certain lack of cultural support for moving fast / start-up culture. Having lived in Germany for most of my life, a year in Tel Aviv and being in Singapore now: Tel Aviv and Singapore have a thriving scene of people that want to start their own company. The places in Germany I've called home never felt that way.
But this article? It seems rather pointless to me. Just like Slack. Or Facebook. :)
I wonder if this doesn't have to do with pay. I often get the impression they want Mr/Mrs Houdini know-it-all of ML but offer entry level pay.
In Germany, I recently got "junior test automation engineer" job offer, that required at least 3 years of automation experience. Upon my joking remark to the recruited, he just smirked and said "that's how the customer sees it".
Most relevant parts for English speakers:
* junior Java developer
* min. 2 years of experience
* knowledge about Java 8, Spring 4+, Spring Boot, microservices
Salary typical for advanced mid/senior. I don't even ¯\_(ツ)_/¯
The digital innovation is being killed by 1) the people who hold the money. Venture capital in Germany and in Europe (excluding London) is totally different that in the US. In Germany for your seed round they want you to show them MRR, churn, thousands of users, forget it if you are 1 founder etc. The barrier is way higher than in US. Furthermore, only recently (2-3 years) have we seen been seed rounds in Germany but these being lead by non-german funds or by global funds that base in Germany. The limit of funds also limits how much companies can pay. 2) the obsession with titles PhD, MD, Lead etc. 3) do things that dont scale, is literally translated into, keep getting interns till the university doesnt have any more students to copy data from excel1 to excel2. 4) the still monolithic approach of hierarchies. (The MD (CEO) of one of the companies I worked for literally said that you should listen to X person because he has been in the company longer, even though that was for 2 months.
Sorry but there is no shortage of talent. really big names in their field have grown and live in Germany but there is no way that Deutsche telekom would hire them, as their contracts are low paying, have restrictions in terms of employment and most people know that when you go in there its kind of the public sector, you wont get out.
There is a little bit of truth around the "tools" part but this is not due to law. Noone cares about the law when you are 5 man team with 10 users. The problem is that they insist on using shitty tools just because they are from another Germany company. Personio is one of them.
I hope everything I said is clear enough and doesnt cause any missconceptions.
One can certainly debate whether that feeling is based on solid ground, given the larger amount of SaaS companies in the US, and the fact that larger companies may attract more attention.
Further that, I understand your point but I do not believe it is an issue in new companies. Yes Deutsche telekom might have such issue, but if you dont use Slack you can use HipChat you can use Microsoft Teams, you can use Google hangouts chat. All with different policies, data centers etc. Hell you can even roll your own with open source projects. There is always a way out and hiding behind the law for not adapting is bad for them.
BTW I believe DAX companies are more sensitive in terms of data than most companies, lets say soundcloud.
Yeah will be interesting to see who advertises gdpr compliance.
a) It has not offered any tax advantage unlike the Netherlands, where many foreigners own IP, holding companies etc...
b) Low-cost labor like Poland, so you'll have a hard time setting up an offshore office.
d) I felt people are bit rigid there. Neither, you can push them around like in many outsourcing hubs, nor you can use the money to drain talent away from competitors. The employees are not particularly noob, unlike many other other outsourcing hubs. If you are planning to do something unethical, most you can expect from your employees is <inaction>. They won't leave, they won't help.
Full employment is the ideal for the politicians in Germany, and they get there also with the help of the church and the social system, "prettifying" unemployment statistics by funneling unemployed people into often nonsensical bureaucratic jobs.
But technology and innovation really means less work for humans, and the fight against technology and innovation then becomes just the natural outcome prioritizing full employment and work, it's the natural enemy of a system like that.
I rather think that trade unions, as well as crude structures like the "IHKs" (https://en.wikipedia.org/wiki/Association_of_German_Chambers...) play a much bigger role in keeping things as they are, and general risk-avoiding tendencies in higher management levels.
Edit: 9.3% was off a google search. see below for more knowledgeable numbers.
This is Federal + State + FICA, on $160,000:
Boston: $48,000; Los Angeles & San Francisco: $52,000; Boise, Idaho: $51,000; Seattle: $40,000 (Washington has no state income tax); Miami FL: $40,000; New York: $55,000
Basically you're looking at 25% to 34% total. Your healthcare will also likely be covered by your employer, external to the salary, and obviously we're not counting any stock compensation.
Besides, US immigration system is not based on your skills. As an engineer you sign a slavery visa (h1b) and can not quit your employer until getting greencard. They give greencard to random people with lottery, not a joke. Your wife can not work, too.
In Europe tho, you get blue card right away. This is why I left US and choose Berlin as my next city. I'll make less but more valuable income here.
You nearly have to make $750,000 per year in Boston to pay 40% between Federal + State + FICA.
Per a new study by the Journal of the American Medical Association comparing 11 developed nations on cost vs results, the US doesn't have poor health service. It's a lot closer to a lower-median rating among top developed nations than a grade of poor. The US scores very poorly on accessibility (10% of the population doesn't have coverage), and it scores very poorly on cost.
"One of the more notable findings in this report is that, at least in some areas, the quality of health care in the U.S. fared comparably to other countries. Long wait times for treatment, for example, are not as much of an issue for Americans as they are elsewhere. In treating heart attacks and strokes, the U.S. actually had the best record of any country. So, contrary to past findings, the quality of care may not be much worse in the U.S. than elsewhere. But the nation's was still shown to be the least accessible health care system."
https://www.cnbc.com/2018/03/22/the-real-reason-medical-care...
https://jamanetwork.com/journals/jama/article-abstract/26746...
Well, that depends. If I have to put more than half of that 160k$ (which is obviously a Silicon Valley example) into the measly place that I live in because rents and house prices are through the roof (like in...Silicon Valley!), the seemingly high salary can easily become very misleading.
> Of course things are changing, but German developers will have to learn to ask for more.
That is true, but I can also see this happening right now due to the relative shortage of personnel. It just takes a while, because the management people can't easily justify sudden salary raises in the upper double-digit percentage area. People need time to build a higher general level of salaries in the area, but it is definitely something that's going on right now.
A 2 bedroom apartment in Pacific Heights, San Francisco's most expensive neighborhood, can be had for 6k in rent per month, which is $72k per year, which is still less than 80k.
Why do you think it is 9.3%?
In Germany, the education system from kindergarten to university is basically free (although schools could be much better funded), you have a public health care system that (mostly) works, public transportation, a welfare system that makes sure that everyone can at least survive, etc. etc....
I spend some time in SF, and even with a much higher income and potentially lower taxes, I'd never be able to afford the same quality of living there, especially if you have kids.
So most innovation will tend to come from somewhat-broken economies and somewhat-broken societies! For them sampling even randomly from the space of new solutions makes sense.
The magic though is how to "stabilize" an economy or society in the "half-broken" state, how to prevent it from going downhill from here to actually-failed-state and actually-failed-economy and then even further to (civil-)war. Only the U.S.A. seems to have managed to nourish this "always half-broken society and economy" that truly accelerates innovation. Even the "Trump thing" seems like a good example of getting this right, fertilizing society with some fresh stinky yummy chaos, even if nobody puts it in words.
Europe could imho get the same "magic sauce" by keeping afloat and integrated, and occasionally half-fixing, its "peripheral" zones (think Greece, Romania, Croatia, Bulgaria etc.) and allowing free migration of money and people. From the half-broken places innovation will come. Or instability will propagate to the more mature/efficient societies and make these more innovative too. The trick is just to not let them get fully-broken or let them drag the rest downhill. (Or not do other exceedingly stupid shit like Brexit, bad deals with Russia etc.) Outside the tech-bubble Germany seems to have had a good idea with the "take in all refugees to stir some blood and agitate people a bit" move... I'm sure it will grow their economy long-term, though not sure if it would be relevant to innovation in tech.
Sweden, Finland, Denmark and Switzerland are routinely ranked as among the most innovative countries. If they're somewhat broken, who are the non-broken countries?
https://www.bloomberg.com/news/articles/2018-01-22/south-kor...
It happens inside the head of a random Russian dude that studies in Germany and then moves to Zurich. Or in the head of a second generation Syrian immigrant to the U.S. People are like blood, they need to be pumped, squished, occasionally crushed etc.
Sure, the company that eventually makes profit from an innovative idea ends up being registered in a developed country, the article describing an innovative technique ends up being published while someone works for a prestigious western university etc. Switzerland is like the "fake news" of every socio-economical statistic since it's a weird "magnet country" for money and ideas from anywhere else.
> Sweden, Finland, Denmark
Agree, they do something right, though not sure what. There's genuine innovation coming from there, but I'm really not familiar with these countries. And I'd bet they're also good at extracting valiue, registering, patenting etc. Or maybe they've managed to get the same benefits of a half-broken society (basically "tons of unemployed/unsatisfactory-employed smart people" kept "motivated enough" but not beyond their "breaking points") without the "broken" part by managing to simply not "overwork the innovativeness out of smart people"? It would be awesome to know this strategy works...
1. Management - I've worked in lots of german companies from all sizes. I'd say the bigger the company is, the more hierarchical is the structure. I think this is a natural thing to happen. But, saying "most German organizations are shaped like a pyramid" is not completely correct. Every company has it's individual shape. And I can tell, I've worked in rather large companies following fairly modern approaches (sattelite-structures, flat-democratic structures, etc.). The claim of "the pyramid" sounds like a biased conception to me, but I'd be interested in studies about german company structures (anyone?).
2. missing tools - this is just untrue. Of course email is still important, but we're using Git/Slack/Jira/Whatever-is-cool-right-now, in germany, too. Also, there is nothing wrong with Excel or MS Project.
3. outdated infrastructure - TRUE! We have a big problem with infrastructure, especially in rural areas (where rent is cheap and overall life quality quiet good). The goverment decided to invest in fibre-technology, though. Maybe a bit late. LTE/Mobile is still lacking and more expensive than in other european countries. If we don't improve this, it will be a big risk for our economy in the future.
4. lack of talent - now this is very interesting. Personally, I think talent is passion compared with experience over time. Our educational system is (not great, but...) good enough. However, I've never seen a great programmer popping out of college/univeristy. The most "talented" folks, I met, often are in their late 30s, 40s and above. They mostly understand business, programming and people-work better than younger collegues. Yet, german companies are suffering from age-discrimination like in other nations, too. For this point, I'd like to refer to Robert C. Martin, by saying we need more discipline in our craft. Instead of hiring 10 graduates, better hire 3 veterans. Because the mess, unexperienced programmers leave behind, will make companies want to hire even more of them, producing even worse software, so managent gets an impression of having not enough people. (get my point)?
a) they are being out-competed by US companies and need to step up their game
b) their core business is eroding and they _have_ to change
Source: this is our daily business.
This is the typical german mindset. You better be avarage, following the german mediocrity.
I think as the article points out the problem is more of the rigid and hierarchical business culture of Germany.
Also Germans are much less international. The dutch and nordics are much much more tuned into the anglo-saxon world were the majority of software innovation happens.
That is a function of being small countries who always had to look outwards and learn other languages and cultures. Germans seem far more insular to me.
If you look at the German Mittelstand, you can find 1000+ small and medium enterprises who have world wide business from rural areas.
And: conservatism isn't bad per se. For many people it means a kind of safety and familarity. Maybe for most folks, it's more important to have a good dayjob that supports their families, than to follow the "arrogant academic" into unkown waters...
https://www.jpl.nasa.gov/infographics/infographic.view.php?i...
Commercialization hand-offs have been extremely successful. It doesn't have to be for starting one specific company, it can be for sparking large broad technology adoption such as the Internet or technology in the aerospace industry. SpaceX exists overwhelmingly due to NASA. Tesla solely exists because of the US Government. Self-driving technology has been dramatically pushed forward by numerous government initiatives over decades. The iPhone exists because of numerous technologies invented by or funded by the US military. GPS exists because of the US Government. Silicon Valley owes a ton of its success to the US Government funding progress on microchips. The entire computer industry owes an epic thank you to the US Government supporting it.
Maybe it works very differently in Germany. In the US, the federal government has handed off vast technology to the private sector.
Bell Labs: its researchers are credited with the development of radio astronomy, the transistor, the laser, the charge-coupled device (CCD), information theory, the operating systems Unix, Plan 9, and Inferno, and the programming languages C, C++, and S.
Plenty of viable companies have been created from these research results.
Email. MS Project. The number of hoops we jumped through to get a white board...