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Comment by Gimpei | Hacker News Reader

Isn’t the more fundamental question why Europe has not been as successful as the US or China in building a native tech industry despite having a huge market? What are the barriers to creating startups and how can you lower them and preserve the enviable European social model? Solve that and you’ll solve the problem of a native cloud.

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In global economies, it is a general rule that different regions of the world specialise in their respective sectors. In the IT industry, we generally observe that early innovators can extend their advantage by binding customers to their technology platform. One example of how this also applies to Europe in the IT sector is SAP. Founded in 1972, they were one of the first companies to offer ERP solutions. Their founders initially worked at a German branch of IBM and took over a software product that IBM was no longer interested in. SAP's leading position in this market has been so strong ever since that no US company has been able to pose a threat to SAP. Oracle, for example, has tried.

You can see this mechanism at work in the USA itself. Microsoft tried to get into the mobil market, but gave up. Google tried to build its own social network, but gave up. All other cloud providers are stuggeling to catch up with AWS.

Brain drain to USA, lack of good VC / funding, Patents war / patents controlled by the USA, industry espionage, EU mentalities that don't favor innovation in the same direction than the USA, too diverse markets to serve, distributed controls / governments / decisions. The list can go on and on

> Isn’t the more fundamental question why Europe has not been as successful as the US or China in building a native tech industry despite having a huge market? What are the barriers to creating startups and how can you lower them and preserve the enviable European social model? Solve that and you’ll solve the problem of a native cloud.

IMO here in the UK we are good at starting tech startups, we are just bad at not selling them to overseas investors early in their life, or having a tax framework that is advantageous to them growing in the UK.

In the UK see Google Deepmind, ARM, Deliveroo... Elevenlabs being incorporated in the USA, Dyson moving to singapore etc - Even outside of the tech space, Cadburys, Sainsbury's, Jaguar Land Rover... If the UK kept hold of everything that the UK created, we would be great!

Even our infrastructure we sell to the French, Chinese, Germans etc just for short-term gain, despite that we are cutting our nose off if we look forward 10 years.

I am just speculating, but Europe has let itself be very dependent on USA for many things - military/defence, technology etc. "We don't need weapons, USA builds them for us". There has been no need to try and compete.

This is changing now. So maybe the incentives will now appear more clearly.

You don’t have to, this ja the reason. There were multiple successful EU alternatives that were killed by the loads of money the US companies could muster to kill or hobble them. And Europe decided it was fine.

There isn’t even an European card brand that operates across the whole continent, the just accepted to use visa and Mastercard for everything. I hope they change it.

And several European countries had their own card systems. The banks have just decided that letting US companies do the work is more lucrative. It was definitely cheaper and it was necessary if they want to be part of US hegemony network and trade with Asian countries since many of them had bad relationships due to colonialism.

The local card systems still exist in most places, but they only work if you have a card from that country, for people travelling across Europe its useless as once you cross the border people won't accept that card anymore and you're back to taking only visa/mastercard.

Eurocheque existed for a long while for Europe: https://en.wikipedia.org/wiki/Eurocheque . But yes, trusting the US economic and political partnership and also choosing the cheaper option, the European banks eventually decided to not do the legwork of establishing a (global) payment network and settled on American Visa and Mastercard networks.

The divergence of being many smaller countries with different regulations, primary languages, currencies etc have been a blocker, but progress is being made[1] and it seems like people are aware of the problem. It just takes a while when every plan needs to be approved by all countries.

1. https://tech.eu/2026/01/20/the-european-commission-launches-...

No need, it was much more comfortable to stay in known sectors such as banking, industry or tourism. Now there is a real need so I'm positive things will change.

Let me start with saying I'm all for the European social model, which is sadly regressing. However, this model/system is often a hurdle for start-ups, or any small company for that matter. The rules are designed to regulate big companies also apply to start-ups, adding up a bug overhead in the initial years. I think agriculture specifically is outside most of these regulations, because European countries love their agriculture, i.e. rural votes coming from the farmers.

Talent pool in EU is large but not concentrated like in US. Combine this with every EU country having different rules, and not being able to hire across EU without incirporating in every country you want to hire, it's also challenging to access to the large talent pool.

> why Europe has not been as successful as the US or China in building a native tech industry

The EU trusted the US so it made sense to leverage US innovation and leadership.

But "Uncle Sam" is no longer an ally. Or a leader. And its recent innovations are toxic to society and democracy.

Well, at the early stages, yes. But at the point where incumbent tech firms have an insurmountable advantage, just adding more startups probably isn't going to save you. Entrenched providers can use their market power to buy up/outcompete/destroy any smaller competitors. You really need both a native market and a startup scene.

China has a huge population that mostly speaks Mandarin. The US has a smaller, but relatively wealthy population that mostly speaks English. Europe is a hodgepodge of languages, cultures, and regulatory environments. That’s a beautiful thing, but it’s not an efficient thing from a business perspective.

> China has a huge population that mostly speaks Mandarin.

It's about incentives. The Chinese had to come up with their own solutions because of their firewall.

Maybe it's time for a European firewall?

In China government threatens and stop people selling companies outside.

In Europe people who sell out are the members of government. Without a terrible revolution, Europe won't change course.

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