
Europe’s Plan to Compete with Silicon Valley - forrest_t
http://blogs.wsj.com/digits/2015/04/22/europes-plan-to-compete-with-silicon-valley/?mod=ST1
======
nakedrobot2
"Europe" competing with a small neighborhood on the west coast where the vast
majority of the world's tech capital lives?

Sorry I don't see it.

Combined with the gloomy pessimism and fear of failure even in Europe's
brightest areas (London and Berlin) and the absolute, spineless pathetic
nature of European VC's (no not bitter at all ;) Europe will NEVER compete on
any meaningful level with Silicon Valley.

edit: spelling

~~~
hikz
Here in Denmark IT companies are extremely elitist. Tons of simple ASP.NET and
Java EE jobs require a master's degree in CS or CE.

Contrast this with the coding bootcamps and "everyone can learn to code"
culture in the US and you can see why innovation is so slow here in Denmark.

I am a CS student genuinely interested in compiler construction, distributed
systems and programming language design so I don't feel I'm being forced to
take a CS degree to get an IT job.

But I still think it's sad that you need an advanced degree to get CRUD
web/business app development jobs.

~~~
wobbleblob
Innovation isn't slow in Denmark at all (source: I work for a Danish software
company). Do you have any evidence people from these 'everyone can learn to
code bootcamps' actually land good jobs or end up doing something innovating
in the US?

I think the difference between Denmark and Silicon valley is investment money
and the size of the domestic market. If the EU wants to recreate Silicon
Valley, it's not tech they need to stimulate, but money.

I think trying to recreate silicon valley is like trying to recreate Hollywood
or Mecca.

~~~
saosebastiao
I can't speak for the bootcamps, but I know dozens of self taught developers
working at Amazon and Google, and the large companies are typically more
credentialist. I have no problem believing that coding bootcamps can result in
high paying jobs.

------
tormeh
Misleading title: This isn't Europe's plan to compete with SV, it's Europe's
plan to stop being a complete mess.

------
father_of_two
Click-bait alert!

This is just an US article about Europe, which falls in the same spectrum of
English telling History or Silvia Saint praising virginity.

    
    
      much of Europe lags behind, with countries in the south 
      and east in particular struggling with slower, less 
      reliable 3G and even 2G 
    

Oh the 'lagging-primitive-corrupt and who knows what else' southern European
countries again. Here's some info. Portugal has 3G since 2006 and 4G (by all
ops) since 2011.

Jesus!
[https://www.youtube.com/watch?v=y3kcnm2THXI](https://www.youtube.com/watch?v=y3kcnm2THXI)

Just relax :)

~~~
eli_gottlieb
That's a pretty silly complaint for Americans to make, considering I still
cannot get a 4G signal in the suburban or rural Northeast, and can only get
one some of the time in the heart of major cities like New York or Boston!

------
yc1010
As a European the title of the article pretty much sums up why there is no
Silicon Valley here in Europe. Politicians and bureaucrats think they can
somehow create and run such an environment from "the top down", when what is
needed is a culture change and more venture funds to dangle carrots for
entrepreneurs. Here often you have to deal with state bodies for funding for
startups populated by beuracrats and controlled/directed by politicians.

p.s: the IT industry here in Ireland is basically a giant money laundering /
tax avoidance operation for multinationals... definitely does not have the
same spirit as Silicon Valley (or the weather for that matter)

~~~
rockdoe
And the best way to introduce innovation "from the top down" for some reason
always involves inventing more complicated legislation or benefits.

Then somehow, large established companies turn out to be the ones who end up
profiting because they have the legal/administrative staff to file out a few
tons of paperwork.

It's truly maddening.

I worked for a European startup once, and one of the founders left to create a
consultancy that did nothing else than to help other companies fill out the
relevant forms.

~~~
yc1010
I can relate, EU VAT would be a prime example of needless bureaucracy and
paperwork. All that time wasted collecting, calculating, paper shuffling
around in order to get VAT right, is time not spent on actually running your
startup

Yes one can pay accountants but that means increasing your costs and
complicating your business from day 1

If they want more startups, they could for example exempt companies lets say
with under half a million in turnover from having to waste so much time and
energy on everything VAT related

Instead of focusing on making a profitable product/service and then worrying
about taxation, startups have to worry about taxes from day 1.

Hell the EU are even now trying to get companies/people from outside the EU
who do not live or work here be captured into the beuracratic pit via VAT MOSS

~~~
TheOtherHobbes
The idiotic VAT proposals were actually the fault of individual govs, not of
the EU as a whole.

The EU plan was to exempt small businesses. But for god-only-knows what reason
- I'm not ruling out petulance because they'd be losing tax breaks - some of
the member states vetoed this.

~~~
_delirium
Is who vetoed that proposal public information?

~~~
TheOtherHobbes
Not so far as I know. But considering that one of the main losers was
Luxembourg - which is where many EU companies base themselves for the tax
breaks - it's not unreasonable to wonder if that was one of the names on the
list.

Of course, the details _should_ be public, and it's no one's credit that
they're either hidden or hard to find.

------
Gys
_The digital single market strategy “in no way” aims to limit the progress of
U.S. tech firms in Europe, Mr. Ansip told The Wall Street Journal._

No worries there !

The European strategy is always to have more and complicated rules (VAT got
far more complex by Jan 1st 2015, net-neutrality is discussed, data roaming is
under attack, etc).

European politicians do not understand that all the big companies once started
as very small companies.

By complicating things (again: VAT, data roaming, etc) the entry levels are
raised.

By the time successful US companies (soon to be Chinese companies ?!) reach
Europe they have enough muscle to adapt to the rules.

Small local companies hardly ever grow that big. And it will only get more
difficult.

~~~
tincholio
>By complicating things (again: VAT, data roaming, etc)

What exactly do you think the problem is with abolishing data roaming charges?
As it is, the telcos are screwing everyone, the plan to limit the data roaming
charges is good from everyone else's perspective!

~~~
Gys
Yes, there should be no roaming charges so people can freely travel in Europe
and be online always and everywhere. That would be good. However, the latest
plan is to NOT abolish them... Just a discount for a while or some free data
for one week or something :-( Not really helpful in creating 'one market'...

------
wobbleblob
> A single digital market could bring in €340 billion to European GDP, create
> 3.8 million jobs,

Automation was never about creating jobs. In my experience it's mainly about
two things:

\- Doing the same or more work with fewer people

\- Doing things a person cannot safely or accurate or affordably (or at all)
do in person

Compare the number of people employed by a major software company compared to
a major oil company with a similar market cap. We are not in the business of
creating jobs, our job is to save customers money by making jobs redundant.

> Geo-blocking of online content – the geographical fencing in of video
> services like Netflix NFLX -1.24%, for instance – across the EU should be
> abolished, the strategy paper says. Copyright law should be updated and
> harmonized.

That sounds good to me, but the content that's blocked to me is almost never
from inside the EU, it's content from American IP owners I'm not allowed to
watch / listen to. I don't think this is because of copyright laws, but simply
because the content owners insist on selling their IP on a per country basis.

The only thing that stops me from accessing European content are the 23
different official languages.

~~~
sirkneeland
Not to mention the underlying different cultures in the case of entertainment
seservicek like Netflix. Even if the language could be translated on the fly
(which will certainly happen inevitably) would Germans find an Italian comedy
funny, and vice versa?

~~~
wobbleblob
I dunno, we know they like Italian cartoons, westerns and opera, so why not?

------
loopbit
The plans described are a good start, but what I think we need is more a
mentality change than anything else.

Starting a tech company in Europe is, usually, easy enough. The paperwork is
more complex and expensive than in the US, but easy enough to navigate.

Looking at the startup hubs in Europe (London, Berlin, Amsterdam, Dublin...),
getting early stage or seed money is also relatively easy. But we find the
first difference with the US here.

Getting a bit of money is easy enough, maybe something below 500K€ is
feasible. But there's no way you are going to get the valuations and the money
raised by similar startups in the valley.

Most VCs here are pretty risk-averse, so that's an extra hurdle, but there's a
lot of other VC operating on both sides of the ocean that are sometimes more
approachable and the networks of angel investors work really well.

For me, the real problem is growth. Converting a startup into a big company
requires a lot of changes. Sometimes the founders are able to step up their
game and continue to run the big company, but more often than not you need
senior executives, people that have done this before and have the set of
skills, knowledge and contacts to manage a big monster.

There's plenty of people with those skills in Europe, but the mentality is
totally different from the US. In the US you can find one of these guys that
is bored, contemplating retirement and sees this process as an exciting
opportunity. In Europe is more common for these people to be afraid of losing
their position.

All this IMHO, of course and based of my experiences.

By the way, I find it funny that the article talks about simplifying tax
structures just after they've approved MOSS, which is a headache for most
companies selling virtual goods.

------
solve
Misleading. This proposal decreases EU competitiveness by INCREASING the VAT
taxes on digital goods. Until now, companies often haven't have to charge VAT
for customers residing in a different country from the providing company. Now,
they'll always have to charge VAT!

> A single digital market could bring in €340 billion to European GDP

Not trying to help startups, trying to get more money by taxation. Way to
continue to screw over tiny startups who are trying to compete with the US,
EU!

~~~
guard-of-terra
On the other hand, they are creating a largest uniform digital goods landscape
in the world with wealthiest customers. It they are successful we are bound to
see quite a few new spotifys.

UPD: And VAT is smaller than e.g. 30% iTunes cut, which they can now regulate
with a wave of hand.

~~~
solve
Just adding more taxes does nothing to create a more uniform landscape.

For the Europeans, consider that Amazon & other US web companies got to charge
0% sales tax for almost their entire customer-base in the US, until they were
far beyond the startup stage. For many of their US customers, they still get
to charge 0%. That's what promoting small businesses looks like.

VAT adds tons of problems, especially for service or purely digital products.
It's very regressive against smaller companies vs larger companies. Best thing
that EU could do for small businesses is copy the US sales tax model and get
rid of the VAT.

As the article says, this is about worshiping huge, old, post-IPO companies
like "Google" and "Facebook", not small startups.

~~~
guard-of-terra
They're not "just adding taxes"; they enforce existing ones and also create a
more uniform landscape.

It's not so important to me whether they worship small or big companies, I
prefer medium sized ones anyway :)

~~~
dageshi
How do you get to become a medium and then large company? You are a small one
first. American companies can grow in a place with very few restrictions and
obstructions on them while they're young and then expand into europe when they
are sufficiently big. All these changes are doing is making it _easier_ for
them to do this, they'll have an inherent advantage because they don't have to
deal with crap like VAT.

------
coolsebz
> “The message Europe is sending its entrepreneurs now is: stay at home” As an
> european, working remotely with various US companies, my response is:
> Completely not! There is no reason to stay and create IP in Europe right
> now. At least not in my opinion. Both Asia and the US are better
> alternatives for starting up than doing so here.

I honestly think that a change in mindset is needed for attracting
entrepreneurs or making them stay. This goes from the said entrepreneurs
themselves to VCs and whatnot.

If they don't change their methods, I'm afraid in some time, things will start
to go downhill for the entrepreneurial environment here.

~~~
tormeh
They meant "stay at home; don't export!"

------
martijn_himself
I think this is a fine example of a commission overestimating the amount of
influence it can realistically bring to bear on technological advancement.
Sure, removing barriers to competition should be a no brainer and differences
between EU countries should be normalised.

Also, the next time someone says ' _X_ is the next Silicon Valley' or ' _X_ is
_Y_ 's Silicon Valley' I'm going to throw myself off a cliff. How about
instead of trying to emulate something successful and original, try to create
something successful and original yourself?

~~~
adventured
Those looking to build their own Silicon Valley don't seem to grasp that there
can be no other Silicon Valley. It is unique, derived from countless events
spanning 60 years that are only possessed by Silicon Valley and which shaped
that area distinctly. From Shockley to HP to Intel to Sun and Oracle, to
Facebook and Google. That has a long chain of evolution, rolling venture
capital returns, investor stock wealth (angels), built-up risk taking, very
experienced management, and on and on. Such a thing can't be duplicated no
matter what is attempted, you can't repeat the past that shaped Silicon
Valley, so you can't build your own Silicon Valley.

Can Paris build something that could create their own domestic tech
juggernauts? Absolutely, and it'll be nothing like Silicon Valley, it'll be
unique to that locality in how it grows and behaves; it'll have a different
approach to risk, or to funding, or to term sheets, or to exit opportunities
et al.

------
alphadevx
I don't understand the popular obsession with recreating the Valley: can't we
do something better?

~~~
tobylane
We can and possibly have, it's just banal. We have comfortable lives with
nationalised healthcare and cheap or free education. We aren't striving to
earn money for our own health, or to prove ourselves because we can't afford a
degree. Without that there's just making something because you want it made.
Governments and private organisations in Europe are decent at finding those
people and giving reasonable funding.

~~~
solve
FYI - to highly ambitious people, just "living a comfortable life" sounds like
hell. They wish to strive for far more, even if doing so is uncomfortable.

Decent, reasonable, comfortable - hardly the sales pitch you'll want to use if
you want to attract or retain highly ambitious people. Do you?

Not trying to offend anyone, just consider that some people have much
different desires than others.

~~~
_delirium
Eh, there's different kinds of ambition. Most of the highly ambitious people I
know take living a comfortable life as a necessary starting point for real
ambition, because their goals are to make things such as scientific advances,
not to spend all their time just trying to make money. I wouldn't call Larry
Ellison ambitious, for example. He is just a hard-headed, no-holds-barred
businessman who wants to maximize his income. Copenhagen Suborbitals are much
more ambitious than Oracle, in my view of ambition. Now a culture in which the
likes of Oracle thrive: _there_ is something that sounds like hell to
ambitious people.

------
guard-of-terra
I hope they get something out of it, lots of tech jobs in a nice and
accessible area is a good thing for the whole web ecosystem and me personally.

~~~
scrollaway
Question: What places in Europe would someone recommend an ambitious EU techie
with no ties to move to (and possibly settle)? I figure the country needs to
have fairly good internet and a decent political climate at the very least.

~~~
Jacqued
In the next few years I think Paris might become quite an interesting place.
(disclaimer: I live there)

It's already booming compared to a few years ago, it is seeing some
significant successful startups (Criteo, Blaclacar...), and the ecosystem is
clearly growing at an accelerated pace, with new companies, new spaces, new
schools, new events appearing all over the place.

In 2016-2017 a few really large incubators are to open. Like the one
championed by Xavier Niel which will host 1000 startups in a gigantic railway
warehouse converted to startup offices (I bet that neighborhood is going to
feel that change!), or another one opened by the City that will host 300
startups.

All in all I expect a frantic activity in the next few years. Now with so many
startups (and hopefully a few great ones in the lot!) the scramble for
financing is bound to be pretty harsh.

~~~
scrollaway
I'm french, lived in Paris for a while. Paris is absurdly expensive, and the
French govt is fairly bad at understanding worldwide collaboration and the
needs of their businesses. I'm not sure France is a good country to be in
right now.

~~~
Jacqued
Well,

\- I did not talk about the government, but I don't think it's that bad in
France compared to most places in the world. Sure, some places like the
Nordics seem to have pretty decent governments but at the end of the day in
almost every country in the world the government is going to suck and you'll
have to succeed despite them.

\- Paris is "expensive" but it's still a LOT cheaper than other comparables
cities, eg. London. I won't even talk about NYC or Silicon Valley.

\- The ecosystem is blooming right now, and if it keeps up as I think it will,
that means a tremendous number of opportunities for an ambitious person
willing to start a business or work with startups.

\- Funding sucks. But then again it sucks everywhere on the planet apart from
SV so that's that. At least people who have worked in France can live on
pretty decent unemployment checks for up to two years while they bootstrap the
business so that's helpful enough.

------
bontoJR
> _Data by the commission shows that 41% of these EU enterprises don’t make
> use of any digital technology._

Technologies for these industries are everywhere, if they don't want them,
will a digital European market change this? I don't think so...

> _The first pillar of the plan: breaking down barriers in cross-border online
> activity. Differences between contract law, taxes, consumer protection and
> copyright laws among member states inhibit trade, the strategy says._

This is a good move, but still there are barriers in scaling: different
languages and cultures.

> _The commission also says it will work to remove the technical and
> legislative barriers that hinder the free flow of data within the EU._

This is interesting, I would really see how they will manage to achieve this
without annoying France and other countries with mass-surveillance systems.

> _Another pillar of the strategy: regulate a level playing field for
> companies and services in the same market._

In a nutshell: instead of promote European startups offering similar services,
they want to fight AirBnB, Google, Apple, Uber and Facebook. We need step
forwards, not fights.

It's a kind of half-baked program, still no better opportunities for
investments, no better regulations for acquisitions (best exit strategy
possible driving to more investors) and no program to motivate investors in
putting money in the Hi-Tech market, but instead, EU will fight American
companies.

~~~
fullwedgewhale
I have to think one major issue for a German startup (for example) would be
that their ideas might not work in France because of French laws which might
prohibit some feature of that German service. So, the Market for a French firm
is (at least initially) France. That's significantly smaller than the US.
Coupled with the fact if feels like most US managers look at a laptop as a
basic tool while many European managers seem to regard it as a tool for their
subordinates.

------
danmaz74
One big problem is that a European "Silicon Valley" would have to grow in one
of the EU states - Silicon Valley is a locality, not a distributed phenomenon.

But with our current EU system, only the state hosting this tech hub would
really benefit from it: We don't have federal taxes as in the US, each country
has its own "social security" and pension system to which the new jobs would
contribute, and this naturally brings more competition than cooperation.

~~~
marktangotango
There is similar competition among states in the US. The states get very
little revenue from the Federal government and when they do it's for specific
programs (ie Highways or education). Often times they are mandated to
institute programs by the Feds with no funds to finance the programs
(assistive telephony).

For example, Applebees is well known restaurant chain here. Their corporate
headquarters is near the border of Kansas and Missouri. Every few years they
physically move back and forth across the border depending on which state
gives them the best tax break.

~~~
danmaz74
Agreed, but the competition there is much lower, if anything else because the
US states have much less power than the EU states - they cannot compete, for
example, on the Social Security system.

------
throwaway9324
If there's anything that's worrying it's how eager people are to misunderstand
the article in favor of their own preconceived notions. This isn't about
competing with SV as a startup hub, but about European companies being about
compete with US companies in the local market. Which is a very real problem.

Europe (at least northern) is probably the easiest place in the world to start
an Internet company. And we're also quite privileged in our opportunities in
the US. If you're not doing one or the other (and want to of course) it's
likely mostly your own fault.

~~~
TheOtherHobbes
As a European, I've thought long and hard about the disadvantages of SV. Not
least:

Cost of living. SF is far more expensive than anywhere in Europe, including
London. This immediately ratchets up the burn rate.

Red tape. Whether it's a Delaware off-the-shelf incorporation or something
else, sooner or later you're going to have to deal with the IRS. From previous
experience that's a world of pain.

Health care. I don't pay for it here. I'd have to pay for it there - and pay a
lot.

There are advantages too - immediate access to a huge market, mostly speaking
a single language; lower sales taxes; networking and culture; weather
(although cities like Barcelona which are comparable).

Access to talent is roughly equal. Certainly there are areas in Europe where
developer standards are reassuringly high.

The real difference is that SV has a strong start-up tradition, while Europe
has an industrial tradition of bigger and more established concerns, and
start-ups seem to happen more by accident, often in waves - like the home
computing wave of the early 80s, and the current tail end of the app+game
wave.

Europe could certainly do more to improve that, but it's not so impossible to
make things work here - it's just the challenges are different.

------
jokoon
Sometimes I feel shame being a programmer in europe.

~~~
pluma
Reminds me of when German politicians were told by their advertising agencies
that they should try to copy Obama's success in social media.

Resulting in a ton of cringe-worthy YouTube videos and managed twitter
accounts and Facebook pages for politicians who think the Internet is "new"
and still print out their e-mails.

For some reason European politicians talking about technology is often a lot
like parents trying to come across as "cool" to their teenage kids. It just
doesn't work and is a humiliating and disturbing experience for everyone
involved.

There are some who get it right, mind you, but generally those in charge
simply don't care about technology and see no reason to educate themselves
(other than by listening to lobbyists who offer them shrink-wrapped opinions
and soundbites).

------
dataker
Maybe, EU is coming to SV, not the other way around.

Although startups have a great culture, big tech companies are being filled
with executives and acquiring any disruptive micro-startup.

Analogously, many employees often feel like 'factory workers'(sorry for
overstatement) being pressured by employers to produce X as fast as possible.

------
scalayer
I'd like to see a similar proposal on physical goods as well. Agriculture/food
stuffs is another industry that is bogged down by the multitude of EU
protectionist laws and tariffs. As I wine drinker, I suffer everyday because
of them :)

------
amelius
There's one important thing Europe has got, that the US hasn't, and that is
ASML; and the whole world seems to depend on it. I'd say the EU is in a pretty
strong starting position.

~~~
adaml_623
ASML? "ASML is a Dutch company and currently the largest supplier in the world
of photolithography systems for the semiconductor industry." Did autocorrect
ruin your comment?

------
comrade1
I'm a former s.f. resident that has been living in Switzerland the last 7
years. My observation is that the engineering talent in Europe is very good.
My opinion is that it is significantly better than in the u.s. With the
developers more often formally trained as engineers and a more serious
attitude overall (of course there are exceptions in both directions).

What Europe is missing is a strong vc industry and a better startup culture.
Here in Switzerland there are of course vcs but most funding for startups
comes from angel investors. And there is no incentive for working in a startup
as they almost never offer options/ownership in the company. And so you get
people developers in startups that are doing it for the experience and so at
the low tier of programmers here.

If there was a stronger and more experienced vc culture I would think that
they would improve startups by making them more like in the u.s. with options,
stock grants, etc.

------
citizen76
My first reaction to this headline.... HAHAHAHAHAHHAHAHA!!!

My second reaction to this headline.... HAHAHAHAHAHHAHAHA!!!

