Why tiny Stockholm has the most stunning startup ecosystem since Tel Aviv
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how? the world's ranking of english proficiency is dominated by Europeans https://en.wikipedia.org/wiki/EF_English_Proficiency_Index#2... I am pretty sure among the IT branch the scores are much higher although you don't need perfect language skills to understand technical concepts.
While you don't need perfect language skills to understand technical concepts, not being at full proficiency can be a barrier. I know that when I help people out on StackOverflow, one of the main barriers to answering some people's questions is that they can't formulate it in English in a way that I can understand. Proficiency is a two-way thing; besides being able to read English, you need to be able to speak and write it well to fully interact with the technical community.
You do notice they aren't recently startup-famous in any way, right?
English, fluent reading at least, is absolutely must have for a CS person.
There is a huge difference between, say, Indian guys being taught in English and Russian being taught in Russian.)
And, of course, never read any serious books, like TAOCP or SCIP in translation.) Master your English first and then enjoy non-distorted flow of author's thoughts in his own wording.
Perhaps we can have a sweded version of NYC in the US? :) That would be ideal.
- Oh, that's simple, you completely lack experience.
- Have you missed the entries in my CV?
- No, but none of them was in Sweden.
On the other hand, this may be completely irrelevant in startups.
That, or this was just an excuse to hide a real reason (could be pretty well crisis-induced).
Minneapolis? The "super nice" midwest basically has it's roots in Sweden.
Also, much of Swedish design is built on simplicity. You can see this everywhere from web design, to store design and of course furniture. The only downside, as others have pointed out, is that its extremely expensive.
EDIT: Discrepancies around definitions of conservatism.
Highest bracket in Tel-Aviv is, as far as I know, ~60% (50% income tax + 10% health/social taxes) + 17% VAT (=~sales tax equivalent, essentially applicable to individuals but less so to companies)
Highest bracket in NYC as of 2013 (unless the "fiscal cliff" is averted) is a few % short of 60% (40% federal, 13% state, 2% fica, 2% social security, and a few more). If the fiscal cliff is averted, it's still 53% or so. + 8.5% sales tax. (sales tax applies everywhere)
Also, what do you get for these taxes?
In Israel, you get comprehensive universal healthcare (services paid by tax, drugs and medicines subsidized by tax), comprehensive public education - no tuition for high school, $3000/year tuition for public universities, $6000/year for private universities or colleges. (All Israeli universities are world class; most colleges aren't). You also get reasonable social security payments when you retire, and reasonable unemployment for 6 months or so after getting laid off (and unreasonable barely-but-enough-to-not-starve unemployment later). And also mandatory conscription when you reach 18, and the occasional bus bombing.
In NYC, you'll get free public schools (some of which are excellent and some of which are glorified babysitting institutions), and other than that ... mostly nothing. You're supposed to get social security payments when you retire, but the books don't balance (unlike the Israeli pension fund books, which do). You also get the occasional hurricane (but only one in the last 100 years had really been devastating - two in the last 106 years)
I live in one of the safest neighborhoods in NYC, and yet, there's an essentially random killing within 1 mile radius of my house every couple of months. If you're in a neighborhood that's not as nice, like some parts of the bronx, it's even scarier. And I'm not just talking about homicide statistics: The police has a scary track record, most recent example is in the Empire State shooting (where with one exception, all dead were shot by the police).
When I was in Tel-Aviv, I used to go for an hour long jog at 3am every day, feeling completely safe. In NYC, it's not safe enough to do that.
I know of a prominent hacker establishment in Brooklyn, 3 members of which were mugged within a 3 month period (one of them snatching, one of them more violent, and one I don't remember). These things happen in Tel-Aviv, but at maybe a 1:10 or 1:100 lower rate.
Also, look at the real numbers. The headlines look scary - 1400 rockets fired on Israel. 1000 air raids on Gaza. But the number of casualties (both Israeli and Palestinian) is lower than Hurricane Sandy's death toll.
By all means, I estimate Israel is more likely to become a much more dangerous battlezone than NYC is to become unsafe due to natural disasters (or terrorist attacks - don't forget the '90s WTC attack and 9/11). But if you do the math, rather than the emotion, Tel-Aviv is as safe as New York.
I also work right by the Empire State building and walk to work along 34th where the shooting happened and I don't worry. None of my co-workers do either. You can't let random infrequent events worry you.
I admit that some areas aren't great, for instance the Bronx or the part of Brooklyn bounded by Flatbush, Bushwick, and East New York. If living in an "edgy" or "up and coming" neighborhood isn't your thing, the majority of Manhattan below 110th is as safe as you can be, whatever time of day or night.
Lower East Side: http://abclocal.go.com/wabc/story?section=news/local/new_yor...
Union Square: http://articles.nydailynews.com/2012-10-07/news/34309226_1_s...
Empire State: http://www.cnn.com/2012/08/24/justice/new-york-empire-state/...
(Correcting self: police only killed the killer; but wounded 9 others)
> You can't let random infrequent events worry you.
That exactly WAS my point. Despite how scare the situation in Israel looks, it is just as safe and just as random as NYC.
> Most of NYC is very safe, if you don't feel safe at 3am you're living in the wrong place.
Boerum Hill is a place a lot people I know don't feel safe at night. Is union square (where I live) the wrong place? I see people arrested (handcuffs at all) after mugging / snatching / sexual assaults on a monthly basis on my 5 block walk to work. (That's in the daytime).
It's not that I feel unsafe in NYC. But compared to Tel-Aviv, crime in NYC is rampant.
I previously lived in Curry Hill for a few years, and I did go down to jog in the neighborhood at 3am. But chelsea/union square does not feel as safe.
The US is borrowing half of what it is spending right now. That can only go so long (maybe 10 more years, maybe 20 more years, but definitely not for 50 more years). "General tax revenue" right now covers approximately half of government expenses, without having to cater to social security.
social security + medicare spending grow at 8%/year for the last 20 years or so. In about 30 years at this rate, it will be larger than the current federal budget.
And the math must add up.
If you are below 50, you will most certainly NOT have the same qualitative benefits that retirees today do. Either benefits will be cut nominally, or inflation will cut them really; But either way, if when you retire you get (in real terms of purchasing power) half of what this generation of retirees is getting, you should consider yourself lucky.
Are you talking about government expenditure and tax take? Or about the general economy?
Federal US budget is ~$4T$/year, taxes are ~$2.4T, loans taken ("government bonds") are ~$1.6T/year.
Highly recommended: reading Karl Deninnger on "the market ticker" on a daily basis. His style of writing is not for everyone, but the facts are, and it's hard to find them so coherently laid out in other places.
Swedish income taxes are extreme and have a very high VAT as well (25%): http://en.wikipedia.org/wiki/Taxation_in_Sweden
Second, I know quite a few who are at almost-the-maximum. Most people, when they talk about their taxes think only federal. AMT at 28% is a bitch, and NYC at 13% is too, so if you're less than 40%, you might be an audit away from serious action (despite what your highly paid CPA tells you).
Ask high-worth individuals in NYC with >$500,000/year income and a few millions to lose what their overall tax rate is.
Third, deductions are available everywhere (at least they are in Tel-Aviv) and can be used to lower your tax burden. If you use them as intended, it means that your tax rate is not lower - it's just that your books do not reflect expenses in the right place.
If you use them too aggressively, you risk criminal charges.
Finally, you should add your accountant fees to your taxes. No one does. Most people in Sweden submit their tax return with an SMS saying "all has already been reported by employer / stock exchange / bank".
I spent two full time weeks doing my US returns this year. Officially, I'm paying much less than the highest rate. In practice, I'm paying it, and possible more, if I put Tel-Aviv, Stockholm and NYC on equal footing.
Wouldn't we expect the tax rate for such individuals to be high? It's not like someone with that high of a pay will suffer from a 50-60% tax rate.
Or, I'll say it another way: The reason most people believe it is easy to engineer around it, is because they have not yet been audited. It's actually not at all easy to engineer around it.
Case in point: Mitt Romeny "only paid" 18% in taxes, so you might assume that's his tax rate - but it isn't; he paid 10% more to his church. Had he not done that, his tax rate would have been 28%. Also, for the privilege of being shielded from lawsuits (through corporate structures), his corporate paid some nontrivial corporate tax - 20-30%. So he actually paid ~50% for his work. I'm not defending him - I would be glad if he paid more - I'm just explaining that people are completely irrational in their discussions of tax rates. The ONLY number should be (what I take home)/(employer's out-of-pocket expense to employ me), for salaried employees.
Most sane countries have things like franking credits where owners only pay to top up from the corporate rate to the personal rate. You can sort of get around this in the US with a S Corp, but you're still paying something like ~50% for zero social services.
Let's not forget world wide taxation and other arcane issues in the US tax code.
Sigh... :)
Whereas a corporate structure shields you from personal liability (theoretically, not including criminal liability - but in practice, it's quite effective for criminal liability as well).
What's your source for saying that it provides limited liability?
The simple fact is that the US has something like this already, with qualified dividends taxed at 15% to try to reduce the burden of double taxation. That's still not low enough.
The point is moot when you start talking about S Corps since those offer the same limited liability while passing through the tax burden onto the shareholders directly.
In Stockholm you pay about 30% in income tax (add 20% if you earn more than 401 100 SEK annually, you earn about 360 000 SEK annually as a newly graduated MS CS student). However you also have another tax, the employment tax, which isn't displayed on your salary specification and is paid by your employer in addition to your salary. The employment tax is 31%. This makes the effective income tax about 81%...
The sales tax is 25% for most things.
We do have free public education, and healthcare for everyone under 18 (it's heavily subsidized after 18 but not free). The standard of our universities is not bad but i wouldn't call it world class as they try to make you believe... We do have problems with the earlier education. Stockholm doesn't have any problems with natural disasters or bombings but the housing situation is pretty crappy.
However the regular income tax is still around 30% and while regular employees don't see the employment tax (arbetsgivaravgifter) i'd still say it's an income tax because it's based on your income and not on how much you work or when you work.
I'd say it's great.
I see that extra tax as money that if not for the tax would be part of my salary (at least some of it) because it's based on how much I earn, not how much I work or when I work. Thus making it of 100% of my salary, not 131%.
I never said it's bad. It's OK. I'd just rather pay for something great/world class than having someone else take some of my money throughout my whole life and pay for average things for me (whether i want them or not). It's a lot harder as a consumer to demand things when you're not paying for it and you loose options when there's a single entity that pays for everything and wants everything done a certain way.
If your salary is 10,000SEK/month (to make numbers simple), then you cost your employer 13,100SEK/month. You pay 3,000 SEK in taxes, so your take home is 7,000/13,1000 = ~55%, and the tax rate is 45%.
If the employer didn't have to pay those 31% to the government, he would have paid them to you, and you would have been taxed on them.
It doesn't matter how the line items are listed from the employer's perspective, and it shouldn't matter to you. Just assume that this appears as another line item, and also a grand total "employer expense". This is what you negotiate when you negotiate your salary - not the 10,000 SEK.
That looks right.
It's a completely different tax, if the employer didn't have to pay that to the government you'd have to renegotiate your salary to get any of it (because it's not part of your salary).
But in Sweden you do negotiate the 10,000 SEK. You generally don't talk about the 13,100 unless you are an employer and have to think about it. That is my point and that is what I think is stupid.
a) it was worth 13,000 SEK for your employer to employ you
b) you're only getting 10,000 SEK.
c) you ask for a 3,000 SEK raise, and get it.
So, not immediately, but after a while it will reach the steady state that I described.
The bottom line is: it's arithmetics; It doesn't matter to the employer which line item the 3,000 SEK are listed under, whether "employment tax" or "salary"; it comes out of their pocket either way. It shouldn't matter to you either in the grand scheme of thing. Employment is a reasonably efficient market in the time frame of a few years, and you will realize, and then demand, and get, a salary of 13,000 SEK.
The transient is going to be weird. But in the steady state - it doesn't matter which lines appear in your pay stub and which do not.
It's unlikely the employer would pay you more. You negotiated and expect 10,000 SEK. Yes, the employer knows it'll cost 13,000, but you only get 10,000. So if there's no employer tax, you'll still likely get 10,000, but now the employer can hire another person using the money that's freed up, or invest in some other ways.
The specific line item in which this expense is listed with the employer, whether "employment tax" or "salary", makes no difference to them, and shouldn't to you.
This is really basic economics.
What is called "employment tax" in the thread above, partly is a kind of insurance premium. For example, of the close to 32% that are added on top of the "salary you see", 11% goes to pension, 5% pays mandatory sickness insurance, 2,6% pays for maternity / paternity leave privileges. That gives you kind of sense "what you get for your taxes in Sweden".
The 30% that everyone pays of their salary goes for services in their local municipality: schools, child care, care for the elderly, hospitals, roads, local infrastructure such as water, drains etc,, and also subsidies for commuter traffic.
The approx 20 % that are added on top for some, together with the 25% sales tax is taken by the government, and goes into the national budget.
If you believe that I have some shares to sell you in London bridge
The employer down the road was profitable paying 13,000 SEK for an employee like you just yesterday. They know you're still getting 10,000 SEK. When they need an employee, they'll offer you 11,000 SEK. Many people will happily switch job for a 10% raise. Later, rinse, repeat: It will eventually converge to how much the employer was willing to pay before. Not more, of course - but why would YOU settle for less than you did before?
The time it takes salaries in high-tech to converge in active economic times is 2-4 years.
I'm talking about the steady state, the transient is short lived and irrelevant in the grand scheme of things.
It really is basic economics.
The minimum investment to register a company (FZ LLC) in one of these technoparks is about $12500 (AED 50'000) which you could then pay yourself as salary over the months.
Is that true? How restrictive is the regime towards migrant entrepreneurs?
btw, anyone form Dalarna are reading HN?)
Tel Aviv is for example smaller, but I guess that the comparison is to the bay area/silicon valley or something like that.
But it is a tiny tiny tiny startup ecosystem.
The Swedish definition of "metropolitan" area is skewed, it consists of several cities and according to wikipedia its 6,519 km2 that is compared to Tel Avivs metropolian area of 1,516 km2. Still Tel Avivs has a metropolitan population of 3.4 million people compared to Stockholm's 2.1 million.
Just looking at the map, a slightly better/more conventional measure of Stockholm might be Stockholm municipality[1] + Huddinge, Sundbyberg and Solna, which gives an area of 350 km2 and a population of about 1.1 million.
[0]: https://en.wikipedia.org/wiki/List_of_metropolitan_areas_in_... [1]: https://en.wikipedia.org/wiki/Stockholm_Municipality
San Francisco attracts talent from all over the US, or rather from all over the world.
Another Stockholm start-up that looks interesting is Gavagai http://gavagai.se/
And Telepo (http://telepo.se/).
Here at $MEGA_CORP we did some recruiting recently and we hired from all over Europe. One good(?) thing is that the political situation in Russia is quite crappy at the moment, so there it is possible to recruit top talent from there.
I guess hiring from the across the pond is slightly harder. But if you pass the normal skype/phone/online interviews and you are good it shouldn't be a huge problem to fly you over for an onsite interview.
However, because of taxes, government regulations, and the fact that it's very difficult to fire someone, it's tough to grow past the startup phase.
This is probably why it's not looked at as a great place to start a business by most.