Comment by dcposch | Hacker News Reader

Comment by dcposch | Hacker News Reader

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That is certainly what they're worried about.

Here's a less flattering angle on the same worry. Europe is caught pants-down. They are realizing how weak they are in tech and scrambling to fix it. The facts:

- None of the 20 most valuable companies in the world are European. Most are US or China based, and many are tech.

- A tiny number of successful startups are European. I think their biggest in the last 20 years is Spotify...

- This is a sad showing for a continent with a $20t GDP and 500 million citizens (EU + UK).

- Software is eating the world. This was a lukewarm take when pmarca wrote that famous essay a decade ago, now you could almost restate it past-tense.

Europe is simply not participating in that process meaningfully. Sure, there have been vast shifts in many aspects of life--Europeans spend just as much time on their iPhones as we do, on Twitter, no FB, on Insta, on Gmail. But they neither invented nor control the development of any of those things.

So yes, European world leaders are belatedly realizing that a guy in SF with a footlong beard could ban them from Twitter at will. But that is the tip of the iceberg. They have developed deep dependency on US tech in all kinds of ways. If GSuite or O365 went down tomorrow, how many EU governments would be able to get any work done?

This situation mirrors the (more extensively discussed) military situation. Europe has complacently decided that the US can manage it for them, and are now experiencing a rude awakening.

If EU doesn't have valuable companies and cannot produce valuable products how come that EU is not much different for living standarts than the US then? Is EU a petrostate? Where the money comes from if USA makes all the good stuff and EU none? From pumping out the Bulgarian crude or mining the Spanish rare earth metals?

The thing is, Europe missed out on the Software&Internet and the reality is, it is not the only tech or only high value product out there. However, software creates enormous monopolies, therefore when you do a top list USA has everything.

If you can look further than the toplists, Europe is doing strong on the long tail and that is how you got your 20T economy with no single unicorn in the charts.

Europe's biggest problem is its demographics - People are getting older and dying, not enough young people replace them. That's why it's percentage on the world economy is shrinking, it's not because Europeans can't code.

You can have an okay economy without tech heavy hitters, but the point is that being dependent on US internet tech or Russian natural gas or whatever can be a significant vulnerability.

Out of curiosity which tech heavy hitters would Europe be vulnerable to losing? I assume they could live without Facebook for a few days.

If by "vulnerable to losing", as in it would hurt their economies and put people out of work or hurt livelihoods because the EU in their infinite wisdom decided to excise one or more of them from the continent, it's pretty much name a non-European tech company.

Even Dell, HP, IBM, Oracle. Service contracts have to be fulfilled, and making a living off of social media like Instagram, YouTube and Twitch isn't just an American phenomenon, actually come to think of it, most of the YouTubers I follow aren't even American. They're mostly in Europe or Australia.

And don't assume they'll just be fine without Facebook either, as far as digital advertising goes, Facebook and Google are pretty much the only game in town. Some small businesses do depend on being able to get business through advertising referrals.

Europe is a rich continent, it's not like they would be destitute if the rich wonders of American tech companies just evaporated from their part of the world tomorrow, but you're not replacing most of them overnight either, so Europe instead is trying this thing where they can at least try to control them.

I mean, I don't see it working out in the long run but in the short term they've shown some muscle, because after all: Europe is a rich continent. Australia, Canada and New Zealand are market-wise, about the size of three US States put together, which is nice, but Europe is pretty much the only large and rich viable market for most tech companies outside of the United States and Japan without putting yourself in a position of having to kiss Chairman Winnie the Pooh on the ring.

>most of the YouTubers I follow aren't even American. They're mostly in Europe or Australia.

Ok, if that is the case then why would those content creators want a country locked market place to publish their content on? If I were in the shoes of a European content creator I would publish on the platform with the most reach. I don't have to care about which nation the platform is hosted from.

I agree.

That's what I'm trying to wrap my head around. Facebook and Google have value because they have gained monopoly power in markets that they created themselves. The need for unlimited personal data and targeted advertising didn't even exist until they came along. Now they have become so integral to everyday life, that access to them is being framed as an entitlement.

How do you manage a utility that tends towards monopoly, but that is also recognized as an entitlement? The answer is to create a state-run monopoly. What does the Ma Bell for advertising even look like?

Could the Europeans have attracted those monopolies to their shores? What did they do wrong?

First movers tend to have an advantage. That’s rarely permanent so getting concerned and trying to preemptively regulate is just bound to create more problems than it solves.

If Facebook/Google went away from Europe tomorrow, Europe would adapt around their absence just as they adapted to their presence, but that doesn’t mean it wouldn’t hurt and hurt actual people. You don’t need state monopolies, you just need to let hungry entrepreneurs continue to look for opportunities just as Facebook and Google did at one point in their existence and exploit those opportunities.

Indeed, and I think that a basic safety net can smooth out the roughest of rough edges. There's no reason why a person needs to starve if their platform vanishes.

To be fair, it’s not likely their platform will vanish overnight as long as Google and Facebook are making money in Europe unless the EU really does drive them out. Market shifts can be fast but there’s at least usually some leading indicators when a small business might no longer be viable.

I almost want to see it because I'm really curious to see what happens if you remove Whatsapp from a population where it's very ingrained.

Do they riot? Do they just download an alternative? Does the disruption in business communications cause such a negative impact that it reflects in GDP?

They will download an alternative. The interesting part is that they will very quickly converge on a single option.

Of course. The value of having a messaging app that nobody else uses is very limited. Most people will roll their eyes every time some sports club, parents ascosiation, knitting circle, wathever will want you to install another niche app. It is a winner take all due to inherent network effects.

You can also predict that wathever emerges will be based on direct or indirect add revenue, and require massive sustained investment for years, thus making it again most likely to be US petrodollar backed, or, if not, petrodollar bought or else just brought to heel or extinguished.

Sure, just as US is dependent on Chinese manufacturing.

That’s why the respective actors are taking actions to fix it.

Another argument is that not having heavy hitters but more evenly spread diverse businesses is a better thing.

US’s economy is tied to extremely large consumerism. An argument is that as humanity we should reduce consumption anyway.

That’s why I would stick with quality of life indicators instead of top list and charts of the economic indicators.

> If EU doesn't have valuable companies and cannot produce valuable products how come that EU is not much different for living standarts than the US then?

I think you need to turn this question around: if the USA has all these valuable companies and all this amazing innovation, how come our standard of living is the same or lower than that of Europeans? What's all that stuff for? Just making a bunch of people very rich?

The inequality doesn't just exist between nation states. It also exists within the US. It's making Californians rich.

That's what people forget. The US is a large country with states that have a land mass as big as entire nation states. It's entirely possible that one or two states are doing well while the rest are doing very poorly. There is an obvious economic split between those who went to college to move to the growing places and those who didn't and had to stay behind in a stagnating community.

I think the last part is a deep concern and if it’s not should be.

Google, Salesforce or Microsoft should not be able to wake up one day and say, you know what, I don’t like those people in Czechia, let’s cut their GSuite/O365 Access with no time to migrate.

These companies have too much heft and influence. And democratic governments have not caught up to that.

Authoritarians know the deal and that’s why they control them. They know how they can sway elections, not through ‘bots but via their algorithms and suppression or promotion of narratives as they see fit.

I have similar observations and concerns in regards to the United States’ overdependence on China as its supplier. I believe COVID-19 has revealed how dependent we are on China for even the most basic of supplies. America’s inability to domestically manufacture simple things such as masks is deeply worrisome. Think about it. We are unable to manufacture basic things at scale to fulfill basic needs of the country. We are no longer self-dependent. America’s generals have voiced concerns for years about how the majority of rare earth metals are derived from China. Metals of which are used in all of our sophisticated technology, such as computers, missiles, jets, satellites, etc. But COVID has revealed that these concerns span far greater than just technology and weapon systems. Similar to how the tech conglomerates can unilaterally erase the president of the United States in one fell swoop, China can also pull the rug from under us when it comes to supply chain. It’s a national security issue. We shouldn’t make ourselves so vulnerable.

This is an entirely different issue. Europe can never compete within the 'western' sphere as long the US wil just gobble up every EU software company that threatens to become relevant with unlimited free petrodollars.

Be careful what you wish for. The Europeans might decide to import the GFW technology from China, and grow their own social media inside the new walled garden.

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