Wow I always hear people talking about why Silicon Vally cannot be reproduced in Europe, but I have never seen anyone put it so pointed. Thanks for education someone in the States about the realities of some areas of Europe.
Reproducing Silicon Valley is another story. Arguably it's very hard to do even in NY or other parts of US that are more or less similar to California. After all, labour law is just one of many factors. For instance, even with all that overhead, I bet it's still much cheaper to hire a bunch of top-notch, English-speaking programmers in Hungary than in California.
Actually, towards the end of the post he delineates the real tragedy: nobody starts a legal small consulting business in Hungary, for all the reasons he states. It's cheap to hire hi-tech labor in Hungary as long as you just send checks to individuals and leave the government out of it as much as possible.
So the situation is that the gov't, through heavy-handed social legislation, makes it basically impossible to start a small business legally. Big business I suspect has ways and means of gaming the system and making a profit regardless. Bad for Hungary.
IMHO, Silicon Valley works because it houses a hugely disproportionate amount of the very best engineers, and from my experience the top .1% or so of engineers open up possibilities that otherwise simply aren't there.
Yes, the capital is here, but I think that's an effect and not a cause. If you took Facebook and started it in any other place in 2004 (with just a handful of exceptions) with exactly the same access to funds I highly doubt it ends up as it is today.
And not everyone has emigrated to California, some have but US emigration is just too rigid. Many of us would want to move to SV, but unless we want to endure H1B slavery status our doors are pretty much closed.
However if anyone out there wants to take a shot at hiring some of us as contract workers, contact me.
I am from a milieu with excellent Engineering talent and could easily build a 5-10 man team of excellent engineers at roughly 60.000$ annual price point.
However I am getting massive down votes here, for something that is neither rude, neither false, neither off topic.
I find this kind of attitude (not even bothering to teach me a lesson if I erred) very rude.
...Oh and they cost roughly 70% less
E.g. I had a chat with a VP of a chech-US startup and they were inquiring about the possibility of expanding in Hungary, because they satured their chech sources, but SV is too expensive / also saturated.
Also, companies like Morgan Stanley, SAP or Microsoft are not starting new offices or expanding in SV, but they are over here.
So, talent is available. In fact, this is so obvious that companies like Morgan Stanley et.al. showed up here, giving good salaries, making my job as a startup guy trying to hire much more difficult.
To be fair though, specific talent like "has worked with Hadoop for a year" or "has worked at Google on the core search engine" is not present here. Also, people are much more likely to prefer to work at a BigCo than in a small startup, compared to SV.
I understand what you're saying, and it's true, in fact I've worked at small companies and been subject to it.
My post was specifically meant to refute the parent's point that:
"I would expect there to be very few engineers in Hungary that match that [top-notch] description".
According to the dictionary: outstanding, notable, superior. Seriously, though, take any reasonable definition. If you asked me a number I'd say 1% but yeah, you could say top 0.1%. I can't see how that gives any more precise information though, given that we don't have a practical, objective way of measuring programming skills.
> Because under my definition of the term, I would expect there to be very few engineers in Hungary that match that description.
Why? I'd expect any country with >10 million people, very high level of literacy, a couple of good universities and internet connectivity to be home to a good number of top-notch programmers. I can't see how that's particularly controversial.
In any case I'm not sure why you're taking issue with this. I never said that Hungary has proportionally as many top-notch programmers as in Silicon Valley. My point is simply: hiring people in Hungary is no more expensive than in California in terms of U$; if you have a company with 20 programmers in SF you could sure find 20 replacements in Hungary and save on payroll.
- has experience working in the early stages of a venture-backed startup
- went to one of the top schools in the world, such as Stanford, MIT, Harvard, etc
- has an extensive personal portfolio of software projects on which they contributed
My point is that Silicon Valley "works" because it has lots of people that meet 2 or 3 of these bullet points. There is no place in the world that really comes close.
Nobody is objecting that you can surely hire people cheaper in other countries, but for small companies the cheapest labor source is almost never the winner. It's far more important to have the very best engineers.
This has no effect on someone's ability.
- went to one of the top schools in the world, such as Stanford, MIT, Harvard, etc
Those are not "top schools in the world". The only advantage they provide are great contacts and opportunities thans to those contacts. In terms of knowledge, many schools around the world (including many in the former Eastern bloc) provide excellent education.
> - has an extensive personal portfolio of software projects on which they contributed
Again, this has nothing to do with being in SV. Many bast-known open-source projects were started outside US (I'll leave it to someone else to list them, but I'm sure you can think of a few off the top of your head).
ADDENDUM - An example of your bullet points working just as badly more recently than 30 years ago:
Cevat Yerli when he started Crytek
And you would be so incredibly wrong. Hungarians are smart. Smart like Americans used to be, back in the 19th century when an American who did his work out in the barn could revolutionize entire industries for breakfast.
And why would you expect Hungary to have very few top-notch engineers?
I am also tried about the "stealing your money argument". In the US, the salary you get after taxes still needs to be used to pay health insurance and retirement. In continental Europe, that's part of the 'stolen' money. You can argue whether it is a good system or not, but an honest comparion is to e.g. remove the social contributions for health (around 6-7 % for a beginner engineer with a good degree), and pension (around 10-12 % IIRC). When comparing e.g. the US vs European country, this has to be taken into account (the graph in the OP is pure non-sense in that regard for the OP argument).
As far as Silicon Valley goes: from all countries I have been working in, Japan has by far the lower income taxation. Yet, it does not especially thrive in a silicon valley manner (I also believe California is far from being the state with the lower income tax in the US ?).
Then you'd have to remove our 7.65% for Social Security and Medicare (employers pay another 7.65% on employees behalf).
If we're going to build tech clusters, let's do it on our terms.
Every time a country takes on more debt, it means it's failed to live within its means. Very few countries have managed without taking on more and more thin-air money year after year.
Western economies are just a huge intertwined clusterfuck. Don't think you're safe.
No, the Asia that has recently engaged in less gambling at the casino of the "financial services industry" than the West.
Generations of poverty? Well, that can be explained by human nature. Various "Elites" oppressing/abusing/killing people, and confiscating the wealth created by them. Our problem as a species is that the West consists of the same homo sapiens as all the Asian countries you have a problem with. In other words, our collective problem is that we're all human beings.
The PIIGS countries have recently adopted "austerity measures", but for example here in Finland, our taxes and price-levels are so ridiculously high it's like we're in some kind of permanent austerity mode.
Our VAT was recently raised 1 percent, to 23%. It would be quite an accomplishment in the field of pissing away taxpayer money if Finland was broke. Oh wait.. even Finland can't get by without more debt practically every year. Go figure.
As for the overall shape various countries are in, at least Germany, The Netherlands and Denmark seem to be doing alright.
In Asia, I bet at least Singapore, Hong Kong, and probably South-Korea are in decent/good shape. Australia has a nasty property bubble going on, probably about to deflate. Same thing in China, but they've gone completely overboard what with all those ghost cities etc.
(Also, there's much less corruption in the US, which is probably the key difference.)
Anything that increases the base costs of starting a business, such as these, will reduce entrepreneurship.
He might be a HR manager in a larger company with good resources, happily hiring all kinds of people for all we know.
If you force companies to pay for women being pregnant and raising children, companies hurt. If you force companies not to pay, women hurt because pregnancy means instant unemployment and loss of income. If government pays, everyone pays in taxes even startups and people with no children (but at least the cost is spread widely). If nobody pays and it's left to charity, women and children live in poverty and suffer from that.
In individual cases, a couple can choose when to have children such that they can win no matter the situation, by deciding to save, or arrange to live on one income, etc. But I don't see any win-win scenarios that can be enforced from outside by legislation. Can you?
For example, goverments should REDUCE the cost of hiring the handicapped instead of forcing companies to hire them.
How could they do that (without charging you taxes to pay for it)?
Easy.
Let's say, in my country €760 NET is a very good salary. If I advertise the job, I get thousands of people to choose from. Some of them will be handicapped. Let's say there is a goverment regulations, that employing the handicapped is duty-free, like cigarettes at the airports. Now I have two options. I either choose somebody who isn't duty-free, and pay €1572 (the empoyee still gets only €760), or, if I'm LUCKY, I will find a somebody suitable for the job among the handicapped persons, and I can choose him or her for the job. That way I've cut my employment costs two half, without paying ANY taxes. It's a nobrainer, even if I have to make some changes in my office to accomodate it for the duty-free person. Because I can slash my employment costs into half on the long run, without paying 1 cent less Salary than to everybody else. And the state? It's a win-win-win. Now they have a lot less people to worry about.
I took it as an example of why he won't hire anyone and why he won't even sell his apartment and start a venture. As such he would have no company to represent in saying those things. Further if you never hired anyone, I am pretty sure you could state your reasons in America and not run afoul of legislation. Now if you openly stated such and then hired only 25-50 yr old males, sure you are asking for it and are going to get it.
Facts aside, I don't approve the author making such a big thing of it though it sometimes may be an issue (if you're hiring for a long project where replacing people is REALLY expensive).
I know of at least one employer who privately boasts that when he needs to hire a woman, he will only hire a lesbian, to avoid this issue altogether.
What a moron. Lesbians have children too. From my own anecdotal information on this, about in the same proportion as heterosexual women.
He is certainly incorrect, but a moron? No, he needs correcting, not insulting.
Some one I know moved to the states (from the UK) working for citibank and was paying much more just for his health cover than he would for all the UK benefits.
It's not the best, but you won't go broke if you have any sort of health emergency.