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Comment by raesene9 | Hacker News Reader

I've been somewhat surprised for a long time that the EU hasn't done more to foster local tech companies and seemed content to rely on foreign suppliers.

Dependence on other countries will always leave a risk that they can leverage that against you, either by allowing for spying or backdoors, or by threatening to withold supply.

Obviously for smaller countries it wouldn't be practical to use homegrown technology, but the EU should have sufficiently deep pockets to do so, at least in strategically sensitive areas.

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> hasn't done more to foster local tech companies

The rules against state aid make this hard to do, and it's also something that has been tried in the past with limited success. Quite a lot of EU ""neoliberal"" policy exists because the dirigiste policies of previous years were expensive and unsuccessful.

There are a few attempts such as https://atos.net/en/products/defense-mission-critical/hoox-s... ; that was actually developed by former state-owned computer company Groupe Bull.

Atos themselves are, like Serco, one of those "privatised functions of the state" companies that do public sector work but without public sector unionisation.

I agree that in the past this has been done poorly, and also state aid rules are problematic.

To me though, that doesn't rule out the concept so much as suggest different approaches to the same issues are required.

Assuming the US continues the trade approaches of the current administration, it seems prudent for the EU to rely less on US based corporates in the long run.

Yet less than two months ago many HM commenters though Europe should give up on building space launch rockets, and just buy from SpaceX:

https://news.ycombinator.com/item?id=17575635

Problem with the EU/Europe it is still the old companies from more than 100 years ago that is dominating the economy and they influence the legislative process, education systems & job markets etc.

This is at least true for Sweden. Take a look on the OMX Stockholm 30 index, consists of the 30 most-traded stock on the Stockholm stock exchange.

https://en.wikipedia.org/wiki/OMX_Stockholm_30

If you trace the origins of these companies the youngest was created in the 80-thies for Comviq that later became Tele2 (created in 1997)

Basically all of the others are from the 50-ies or before, many founded in 19th century.

Problem in Europe is that there’s always a chase against rich people, too. One could not build Apple in France, they would get mugged – at best you get laws against the concentration of money.

Meanwhile you get benefits if your startup is in one of the approved sectors and employing doctorates. You don’t get money if you are just reusing proven tech like Apple does; You have to do research. That means we fund research a lot, while we tax implementation. I guess it’s mostly great for competing countries.

And thus, the economy is mostly guided in Europe, as opposed to innovative.

Yes, and I think we can sum it up with Europe = old money, US = new money.

It is hard to become rich in Europe, families that are rich became rich a long time ago.

tajen, the vast majority of your comments are marked [dead] and thus invisible -- it looks like you were shadow-banned two months ago.

In a global world one thing you always have to keep in mind is that companies, as they become successful, can simply relocate to where the best opportunities are. And opportunity is going to encompass a wide array of things such as minimal tax obligations, minimal regulations, maximal funding, maximal talent availability, minimal talent costs, so forth and so on. You can weight all of those in some way or another and come up with n. Without some notion of nationalism, which the EU is rather less than interested in fostering, a company working in their best interest is simply going to relocate wherever n is maximized at the earliest opportunity.

And then there's also the issue of mergers and acquisitions. Imagine some country goes out of their way, likely at great cost and rule 'flexibility', and helps foster a new tech company. Then e.g. Facebook perceives this company as a potential threat and initiate their borg routine -- you will be assimilated. Fortunately in this case that just translates to throwing a ludicrous amount of money at the founders and then scrapping the company, marking it up as an acquihire. The taxpayer in whichever EU nation is probably not going to be terribly thrilled about their money being used to achieve little more than turning Facebook into even more of a behemoth.

But countries can, and do, overrule "global" corporates on a regular basis.

For example the USA blocks M&A activity relating to Chinese companies taking over strategic US companies. Will those US companies simply relocate to China to get round this, I doubt it.

There is realistically a balance to be had between enabling global commerce and protecting national interests. At the moment the EU seems keen to move that balance more in the direction of their regional interests, no doubt partially related to the current trend for more national interest based policies from the US

That's because China just isn't good enough for these corporations. If it were, they'd go there faster than you could say "quarterly report".

That used to be true. The US switched to taking an aggressive captivity approach to its strategically important corporations. That changed when Pfizer tried to flee to Ireland in an inversion due to high corporate tax rates.[1]

Apple, Cisco, Intel, Microsoft, Google, Walmart, Pfizer, Amazon, Amgen, Merck, Facebook, Qualcomm, AT&T, Verizon, JP Morgan, Bank of America, Wells Fargo, Citigroup, Exxon, Chevron, Berkshire Hathaway, Visa, GM, Ford, Disney, Comcast, Procter & Gamble, etc.

If any of those companies attempted to leave the US as their corporate domicile (whether to Canada, Ireland, Mexico, Japan, or China), they would likely be blocked by the Treasury. They'll change whatever rules are necessary to maximize the pain. There are a few exceptions to allowing companies to leave. Germany for example, via Bayer, was allowed to buy Monsanto - which is a strategically important corporation - because they're an ally and it's expected that when the US wants to buy an EU company there will be reciprocity (eg the failed NXP Semiconductor acquisition).

Smaller companies may slip under the acquisition restrictions for countries not named China (or Russia). For example AMD would be allowed to be acquired by a tech company from Canada or Britain. Celgene or Regeneron would be allowed to be purchased by Takeda Pharma.

[1] https://www.washingtonpost.com/business/economy/pfizer-aller...

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