Mobile - with its close integration needs with other high tech industries and cutthroat margins - is near the tip of that huge iceberg.
Mobile - with its close integration needs with other high tech industries and cutthroat margins - is near the tip of that huge iceberg.
Here’s an article from 30 years ago doing a postmortem: https://www.nytimes.com/1996/10/07/business/why-european-com...
It’s baffling to me why the entire world in the 1900s was eventually able to compete with Detroit in auto manufacturing…even after being decimated during WW2 (Europe, South Korea and Japan have no trouble competing in automotive)…why have they not been able to compete with Silicon Valley?
Manufacturing cars is far more capital intensive than anything in software, so I don’t think funding is at the heart of the issue.
Either there’s something fundamentally different about computers/software or the rest of the world is about to finally wake up and start competing.
Although the UK still punches above its weight in computing.
- Much of the continent was a hotbed of dictatorships and extremists well into the late 20th century. Large parts were locked behind the iron curtain; skilled but poor. No way for them to compete. Spain and Greece were dictatorships until ~1975. Italy experienced continuous political instability post-war and arguably still does. Germany was split in two with a giant razorwire wall down the middle. This situation is not conducive to establishing new successful companies.
- Netherlands and Norway became (to some extent) petro states.
- The British population had been subjected to years of wartime propaganda in which all government failures were covered up, so naturally concluded that governments must be pretty great at running things. Even now, previously unknown wartime disasters are still being declassified, one stopped being secret only a few years ago. The British economy became steadily more socialist from the 1940s to the 1980s, being changed only when the economy was on the brink of collapse and Thatcher came in. During the 1970s when HP and Intel were establishing themselves in Silicon Valley the UK government was being toppled by openly communist unions, there were rotating power outages, 3 day weeks, trash piling on the streets, an IMF bailout. Thatcher righted the ship but not before the UK lost most of its heavy industry including its auto industry to militant unionism, along with the drive to set up new industries. Even when a nascent domestic computing industry developed it was partly driven by the BBC wanting to educate kids, and came way late compared to the Valley firms who were by then already large and powerful.
- Europe decided that the best way to avoid a repeat of the war was to unify under a single government, but the form of that government was heavily influenced by the French and their love of protectionist big government subsidies and tariffs. That shapes everything and the EU doesn't hesitate to do things that are blatantly anti-industry or anti-innovation if they think it will advance their agenda of further "integration" i.e. movement of power away from national governments towards the EU institutions. That always takes priority. The US government doesn't have the same goal of abolishing the individual states, so Congress and the Supreme Court often rule in ways that enable local divergence and policy innovation. The EU in contrast sees those things as problems to be solved, not opportunities or constitutional rights.
- Elitist distrust of the population is sadly a long term feature of European culture. After the war Germany decided it needed strong anti-nazi/anti-holocaust speech related laws. Partly as a consequence Europe doesn't have the first amendment or strong free speech culture, and frequently doesn't have any concept of fair use in copyright law, but large parts of Silicon Valley since 2000 aren't really possible without these things. The animating values of early Facebook, Google, Twitter etc are populist in nature and these companies turn towards widespread speech control only came very recently in the grand scheme of things.
And a non-war factor: in some countries an pervasive problem with cultural elitism in which American things are crass and commercial, unlike the refined reasonableness of all things Euro. It's not true so causes people to search around for talking points to try and prop it up. In the tech world this is often privacy and you see the results in the article, where the author interprets criticism of a privacy focused OS nobody cares about (iOS and Android privacy is good enough) as a criticism of making a "European" phone OS.
Silicon Valley isn’t replicated because the investor culture isn’t replicated
Without an ethos of continuing to invest after getting liquidity, new companies don’t get funded
Speaking of liquidity, that’s also not prioritized across Europe, shareholdings are quite illiquid and companies are forever homes
The simple truth is that dropping out and starting companies for example is not deemed as an acceptable path in life by most of polite society in these places.
And well, there must be a number two after Silicon Valley. Who would you say that is?
The Northeast Corridor.
Since then, France has been very timid in the domain.
https://www.mightyrecruiter.com/recruiter-guide/at-will-empl...
Almost any american state is a vastly better place to start a company than almost any european country.
Talent availability and local startup ecosystem don't count for anything? All that matters is that you can dismiss employees for any reason at any time?
The average non-contractor salary is much lower and it's rare to find startups hiring contractors, I assume since they don't have as much money.
For all that America likes to proclaim how varied it's culture is from state to state, I'm a 2 hour train ride from switching currency and language, in addition to substantial cultural norms.
Such things seem much more significant to me than notice periods.
The USA is a much more attractive environment for investment and hence startups and the EU would struggle to offer the same without losing its soul.
It's definitely possible and easy for a company in EU country X to provide a service to individuals or companies in another EU country. What makes you think otherwise?
EU investors will invest in a working idea.
We have far fewer ridiculous startup ideas or companies that can't scale, but the flip side is that we have fewer winners too.
Investors in the US will throw millions or even billions of dollars at an innovative new business, even if it doesn't make that money back for years. They'll invest in consumer facing businesses, like consumer tech products, apps, social media sites etc.
EU ones won't do that. They'll invest fairly tiny sums in safe, conservative businesses with a proven (but arguably limited) business model, and that won't be enough to get the kind of unicorns Silicon Valley specialises in.
In the EU the culture is much more cynical, and the belief in individual impact is much lower. There's also more of a sense of there being things that one just does not try to exploit, types of business that could be considered morally distasteful (see the healthcare industry for the clearest examples of what I mean).
These are very broad generalisations, they don't apply evenly across the US or the EU, and while they all sound quite negative they are really trade-offs and it's up to individuals to decide where they prefer to sit on these trade-offs.
For example, they forced brands to switch to Type-C, everyone here cheered up the EU. This will come back to bite us in the a*. EU's actions were excessive and in the future will hurt innovation since brands will now have to ask permission to EU to come up with new standards if needed.
Is there a compelling argument to be made that it's not the inverse of this? Perhaps other jurisdictions are facing destructively light regulations?
European politicans can't do that since they're busier trying to win next elections.
In the same way, for EU companies to really play ball and have access to US based VCs they at some point have to incorporate in Delaware or NY to be taken seriously.
The only exceptions to what I described that I have seen seem to gravitate around fintech.