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I don't see how its in anyone's interest to generate more rent-seeking giants. All these R&D statistics are bullshit as they work on tax data, which in turn clearly incentivises companies to classify every programmer or engineering salary as research. A healthy world needs more dynamic startups, not more anticompetitive giants that squeeze or buy everyone else. The US or Chinese advantage is not quality engineering or better companies, its just financial engineering and huge state or venture financing specifically intended yo generate winners.

I'm happy that the EU still bets on the small guys.

We’re not talking about artisan cheese here, we’re talking network effects. “Small guys” can’t offer the same value without a user base.

The Economist had an article here a few days ago lamenting that Europe fails to produce IPOs, which is where the actual problem lies.

A lot of European startups don't get to the size where an IPO exit would be appropriate because a US company buys them before that can happen.

You don't have to sell out to a big US company, so it's worth pausing to ask how we've reached the situation you described.

Of course you don't, but someone offering to make you a multi-millionaire is hard to say no to. I imagine. I've never been in the situation unfortunately.

Generally it's not you making the decision but some investor who needs to close out a 10y fund and can force the sale through some nasty term in the SHA.

In a unicorn situation, the founder will generally take money off the table early and will be okay regardless. Just look at WeWork.

It certainly is, but in the US there have apparently been enough incentives for some founders not to accept an offer at that level. Some of those founders have gone on to build their businesses up to billion-dollar valuations, with dominance in their field, and now they've become the ones doing the investing and acquiring for the next generation of tech businesses. We have almost none of that in Europe, and I think it's important to ask why. I don't believe we lack people with ideas, skills and entrepreneurial instincts, and that means something else is getting in the way.

Name some in the EU

Some of what?

The issue is that there are a bunch of big is companies with way too much cash who can buy any potential competitor. I do not feel it matters much how they got that big. What we instead need to limit is their ability to buy competitors.

I think both are important. There is a question of what we do to prevent any successful medium-sized European business becoming a small part of some huge US business. But there is also a question of how our entire entrepreneurial sector got so broken on this side of the Atlantic that such a huge imbalance arose in the first place. If we don't address the issues that caused that to happen once, surely it will tend to happen again sooner or later.

It is, as always, an inequality issue. Sadly, the alternative is not acceptable in a neoliberal world: no european company is willing or able to pay up for a promising technology as much as Google, Apple or Amazon will, but nation-states definitely can.

If we stopped them buying competitors they'd just build their own competitor, and then the founders with the original idea would probably lose and nothing else would change. At least while FAANGs buy up their competitors the founders get an exit.

There no massive capital flow like in the US because nobody's putting their entire life savings and pensions on the markets.

Interesting, where do retirement savings go? I don't know much about the European context beyond the S = I identity from my intro macro courses back in the day.

Real estate, guns, oil.

And we’ll they actually cannot pay what they promised, so they keep upping the pension age etc.

Personal savings usually go into real estate and conservative savings instruments (savings account with minuscule interests payments, life insurance). Public pensions are just part of the regular money flow of the State. Taxes come in from the employed, budget goes out to the retired.

There are companies and people specialized to get grants and funding from the eu. They will take 15-20% . Most of the time the money goes to incompetent companies, but with good connections. Normally you’d call this corruption, but of course that doesn’t happen here.

But why is a high stock value the ultimate goal?

Shouldn't the goal be producing tech that's beneficial?

Because high future valuations allow companies to raise capital and do useful work in society.

[citation needed]

AMC

Beneficial to whom?

In general, to its users, hopefully without also being detrimental to society as a whole. But my point here is mainly "shouldn't the goal of a company be to produce a useful product or service rather than simply to make money for its shareholders?"

That’s the purpose of a commercial company. To return money to shareholders.

This kind of institution does exist: https://en.wikipedia.org/wiki/Benefit_corporation

> The situation has devolved to where startups treat public funding as though it were revenue and have dedicated teams to chase it.

This is how it works in America, too. Professional grant writers who know how to get funding are basically the rainmakers for research teams.