It seems we're yet to learn that there's a possibility to go all the way.
It seems we're yet to learn that there's a possibility to go all the way.
Why is it the US's fault that they consider tech to be valuable to their economy and national security and we don't? What's stopping us from doing the same?
As long as we'll keep treating tech as some cost center instead of a core business while we keep pumping money to keep afloat 19th century industries who's ships have sailed long ago, then we deserve what's coming to us.
We let Germany buy one of the most important companies on the planet in Monsanto. I consider Monsanto to be a national security level company, we should have never let it go. Seed & AG tech is critical for the coming century and Monsanto is one of the very few global giants.
For a long time we've been allowing European pharma giants to catch up in biotech by acquiring several of our important biotech companies, as with Genentech, Genzyme, Baxalta, MedImmune, Bioverativ and so on. We let Germany's Merck buy up Sigma-Aldrich. We let our medtech juggernaut, Medtronic, rebase to Ireland, no doubt taking important IP and jobs with it over time.
When I watch important US companies like Genzyme get consumed by a European company, I fully understand how the Europeans feel about ARM etc.
Rather, that Europeans should place more value on those companies--and either: for competing European firms to outbid US acquisition attempts; or for the owners to not sell them when the offers are too low.
One of the major challenges is "synergies" (gak!). Acquiring, say, ARM adds much more value to a company like Apple or nVidia than it does to SAP or Spotify. There's no way around the fact that right now American tech companies can afford to outbid European ones for ARM because ARM adds more value to American companies.
You seem to imply here that the US acquired this company against the will of the seller, which I don't think the parent thread was getting at (nor is true, as far as I know).
Many things around have "global importance," and it is long past the time for any modern, globalised economy to undo that.
If China wanted to f__k up the West economically on the supply chain side, they have far, far, far more options to do so than the other way around, and this is not limited by companies on the extremes of labour intensity scale. They are plenty of both low, and high tech companies which are one and only in the world in China.
And so can many countries with industrial economies, not event necessarily large one. Take Thailand for example, and how they gave a fright of a lifetime to Internet companies with a single phrase "It may take at least a few years before the world can make new hard drives."
Or Taiwan, a Microchip embargo today from them may well be a worse thing than an oil embargo of 1970s to a modern economy.
Japan, and Korea both have a deadgrip on high material science products, and not so high as well. Both have giants which control chemicals used in 90%+ of all synthetic fabrics. Life without synthetic fabrics today will not be fun to anybody.
India has a generic drugs supremacy, and is relied upon by much of the world other than the West for just any drugs.
The one and only in the world top tier substrate plant went up in flames in China week ago. All major chip vendors been using their substrate for the package for a few years. If you see a chip with HBM memory, or any model CPU, it's their substrate which is used.
On the other end of high techness scale, China has 90%+ of global market for such essential industrial goods as screws, nuts, and bolts.
Neither of these examples avail to being easily substituted, and I can come with many more.
USA has created monstrous monopolies that are very heavily subsidized by the government. Amazon, Apple, etc. do not pay taxes and yet get big sums of money to settle in cities.
That is the money that USA is using to buy European companies. China blocked the USA from buying their tech, and the result is a healthy ever growing tech scene.
I have worked for a couple of European tech companies purchased by USA corporations. First "nothing will change" is the message, two years later the reduction in quality is clear and all the tech is siphoned to the USA side of the business. It makes sense, it is good for the USA.
Europe should follow the Chinese example and ban most of USA tech. No more Facebook radicalizing our citizens, no more Amazon taking over all business without control, ... When TikTok started to grow, the USA banned it. That is the game. Europe should follow, ban Facebook, Twitter, ... let local talent grow. There is much wasted talent in Europe overwhelmed by the current position of USA companies.
"Just don't sell" does not work when your adversary puts all the weight of the state to protect and subsidize their tech industry.
> I have worked for a couple of European tech companies [...] all the tech is siphoned to the USA side of the business. It makes sense, it is good for the USA.
Out of curiosity here: Could you name one/a couple of examples? Not necessarily the ones you worked at, if you are prohibited from disclosing this information.
Email is in my profile, if you do not want to make any public statements.
Cheers!
It was a successful startup but $8.5 Billion is a lot of cash.
I heard that developers were not happy with Microsoft way. Promotions/Pay/etc. became a competition between colleagues instead of a collaboration.
Of course in that case my colleague leaved the company, maybe other people really liked it that way and stayed.
But, my personal experience is similar. USA companies want employees competing for recognition instead of collaborating to compete with other companies.
Amazon taking over all our businesses? That's a bold claim, any stats to back that up. A family member of mine runs a business on Amazon. You'd like to kill her business? There is literally no other platform that does something like fba.
Also the reason Amazon and Google are successful here in the UK (and everywhere they are allowed to operate) is because they are way better than the competition.
Yes. That is the point. The need exists. European companies will offer that services creating high quality jobs in Europe and they will follow European cultural norms instead of American ones.
> There is literally no other platform that does something like fba.
That is the monopoly part promoted by the USA and financed with public money. Amazon is a monopoly protected by a friendly but in the end foreign power that has misaligned interests.
I can assure you that if tomorrow Alibaba grew to challenge that number one position, it will be banned from doing business in the USA.
The services are needed, here, in the USA and in China. USA has its own tech companies, China has its own tech companies, Europe has not anything at that level because USA just buys anything Europe creates backed up by USA tax-payers money. That is not fair.
Are you really trying to claim Amazon is financed by tax payer money in the USA? Can you provide examples of this investment?
Fba is monopoly because Amazon took a huge bet and invented it. Same with prime.
They don't pay taxes and pay workers like shit. The federal government gets no revenue, and still has to increase social spending and policing to avoid workers burning the place down, protecting Bezos' investment. Then there's Blue Origin, which involves direct handouts from Uncle Sam.
You are right there. We are the product, we give our data, we give our attention, it is not free.
> unopposed monopolists that acquire or destroy any business that might pose a risk to them
Good point. That is also true for other ones like Facebook that purchased Whatsapp just to keep the monopoly in personal communications.
Here [1], for example, is one for Apple, showing them paying an income tax rate north of 20%, for tens of billions of dollars. Then they pay payroll taxes, property taxes, import taxes, sales taxes, for many more billions.
All the companies you claim aren’t paying taxes are.
[1] https://www.sec.gov/Archives/edgar/data/320193/0000320193180...
https://fortune.com/2018/01/18/apple-bonuses-money-us-350-bi...
You are taking the statement literally. In that sense you are completely right, that companies pay an amount of taxes above zero. But, if I pay $100 in taxes but I get back $110 then I have effectively not paid taxes. Even that is not literally true as I paid and then I got them back.
> income tax rate north of 20%
That is after all the accounting magic. As a non-tech example, did you knew that Harry Potter movies did not won any money (https://deadline.com/2010/07/studio-shame-even-harry-potter-...). Of course, that is ridiculous, but it is accounting truth.
Should they also pay US Social Security and employment insurance on their foreign workers in foreign countries?
If you want to look at the foreign country equivalents of these SEC filings, they're all public, and you can look through them. When you do, you'll find Apple pays north of 20% of worldwide income, when totaled worldwide. I've been through their biggest several markets looking through financial data. It's all there for you to check.
You're just making my point - Apple paid all necessary US tax, and it's quite a significant rate (just like US law) compared to US profits. They also paid all required foreign taxes, also at a pretty high rate.
Also, if you think somehow Harry Potter accounting implies Apple accounting, then if I point to a company paying the amount of taxes you like, is that evidence Apple did too? Of course not. It's an invalid comparison or implication in either case.
Same for your made up $100 and $110 story. What if I make up the same story with $100 made and $110 paid in taxes - does that imply Apple paid more in taxes than they made? Of course not.
>That is after all the accounting magic.
What SEC number do you dispute, say for 2017: US sales of 229B, operating income of 61B, or 15B in taxes? These are all well documented, quite reasonable numbers. If they're lying on these, there are significant costs for them if caught. And there's thousands to millions of investors that also care a lot about how accurately Apple records numbers. It makes much more sense these are the legally correct tax numbers.
I presented you Apple's legal filings to cut through all this opinion piece nonsense, since for every opinion piece one way there's one the other way.
The truth in the matter are the legal filings: IRS and SEC. And they're pretty clear Apple pays more tax than the pop believer thinks.
If you want to argue Apple doesn't pay the proper taxes on US income, show me a SEC or IRS filing that shows it.
So you can believe opinion pieces that match your current beliefs. or you can look at the legal filings with the actual data, usually left out of opinion pieces. One will give you a much better and more accurate worldview. One is mostly designed to create outrage and pageviews - the more pageviews the more the opinion piece place gets paid.
Otherwise they, like you and pretty much every entity, pays the tax their required to be law. And like you, and pretty much every entity, they do their best to not pay more than the required amount.
Many small and mid-sized business struggle or refuse to scale because it exposes them, their owners and management to taxes which cannot be escaped (by contrast small businesses can pay their staff in cash, and charge personal expenses to business accounts for VAT writeoffs).
Alternatively many European businesses are optimised to receive Government and EU grants and subsidies, not to compete on the international market.
Yes, the USA is unequal compared to Europe, but this might be the price worth paying for innovation and technological dominance: America's poorest are richer than the average Europeans:
https://www.acton.org/publications/transatlantic/2019/08/27/...
The solution is for Europe is to dramatically cut taxes (eliminating payroll taxes and reducing VAT to 16% across Europe should be a priority), increase the pension age to 70, and limit access to bachelor's degrees to the top 20% and Master's degrees to the top 10% (many Europeans spend their entire 20s at university, when they could be working instead).
The alternative is basically slow Demographic decline and descent in complete central planning, which Europe seems to be pursuing.
Having lived on both sides of the Atlantic, I would say it felt much easier to start a business in the UK: Healthcare is covered, believe it or not there is less bureaucracy, there's great digital banking options that the US is only just getting its head around, etc. In Europe I always felt I had a safety net to fall back on if my business failed – not so in the US.
My own hypothesis is that the European stock exchanges aren't a particularly attractive place for an IPO. London's AIM, isn't quite the NASDAQ. The US tech stocks are now worth more than the entire European stock market according to Bank of America Global Research.
And so I think it's always in the back of a Founder's mind – not to mention their investors – that they'll have better liquidity if they're packaged as a US inc. to start with – and if not just sell to one.
Hopefully with Sequoia opening an office in London though, this will begin to change.
It even goes as far to basically blame the poor for their own poverty. It makes zero consideration for the higher health care costs or general cost of living differences between America and Europe (for example: The average European does not need to own a car, does not need expensive heating or extreme cooling, and their healthcare costs are far cheaper) The most notable bit is healthcare, as the hilarious math says 'well the CHIP benefits save them X thousands of $ vs out of pocket costs!' (Because healthcare costs WAY more in the US) but the purchasing power index is not biased in that category so it accounts the same.
Might I add that the author's main book is about proving the bible is true and that the earth is 7000 years old from a 'I think it is true so here are my mental gymnastics ' perspective.
The USA's privatised healthcare system would operate a lot more efficiently if sugar was heavily taxed, fresh fruit and vegetables consistently available (no 'food deserts'), and coal and oil burning for transport and energy minimised.
I think that's too much of a blanket statement. France (the second or third largest economy in Europe depending on the year) is a potent counter argument to that premise.
Bernard Arnault, $89 billion. Francoise Bettencourt Meyers, $66 billion. Francois Pinault, $42 billion. Alain Wertheimer, $32 billion. Gerard Wertheimer, $32 billion.
Those are immense dynastic fortunes and there's no indication those people plan to give it all away in the style of Gates, Buffett, Zuckerberg, Scott, Carnegie, Rockefeller.
The US economy is about eight times larger than the French economy. If you expect that an economy eight times larger might produce something in the ballpark of fortunes eight times larger (one can apply a discount and it'll still be extreme), that wealth scale & concentration is mind-boggling large even by Bezos standards. Arnault's wealth might be like someone in the US being worth $712 billion in terms of how it towers over the economy and other wealth in the nation.
Germany has 34 of the top 500 fortunes in the world. 6.8% of the 500 richest, and Germany is slightly over 1% of the world's population, and about 4% of the global economy. Clearly they like their giant fortunes as much as the next affluent nation. And the Germans are notorious for their dynastic wealth as well, they have no problem passing down immense fortunes to the next generations.
(I'd do national share of global wealth for Germany, however that's a super messy batch of numbers, especially settling on even semi-accurate estimates for global wealth; it's still fairly interesting to see how their economy represents itself as part of the global share, and then how many top 500 fortunes that has produced.)
Sweden, with just ten million people, has 12 of the top 500 fortunes.
Russia - now infamous for their billionaire oligarchs - has 24 of the top 500 fortunes, while simultaneously having tens of millions of the poorest people in Europe.
It turns out that extreme taxation helps aristocrats...