What are the conditions regarding creating and running a modern tech company in France, Germany, Spain, Italy in comparison with California - or Delaware?
I mean, if European society - and particularly European governments, as "conscious" agents of that - wants to have better startup results, do they make it's easier to achieve from their side, do they see any problems with European modern approach which they can improve?
It is not a tech problem, not a culture ptoblem, but a monetary one. Reserve currency status and the petrodollar gives the US accrss to unlimited consequence free cash. This is why they can just treat the EU as a free research lab and buy up every promising result.
There are many recent non-american consumer tech companies like TikTok and Telegram. It's not just that the US is a unique success in tech, it's also that the EU is a unique failure and that cannot be explained with the dollar's reserve currency status.
Europe is not less competitive. US companies/startups just happen to have more capital and also network effects (lots of tech companies are already there).
Most of the tech is concentrated in California. If this was about regulation/labor market, it would have happened some place else in the US. That was not the case. Regarding taxes/gov. regulations, the US also has its own share of crazy.
I don't think all of these elements matter much (otherwise Estonia and Malta would be the tech hubs of Europe).
I believe California was much less regulated as you go back in time. Once a hotspot has started it might persist even into conditions that would have choked it early on.
This. Many banks as a condition of giving out a loan require a house as collateral. A house that's underwater also tacks a debt to your personal name for instance.
Very few tech startups are working with bank loans. Banks in the US will almost never loan to a new business without a personal guarantee and collateral.
Investors don't care where you are as long as they're confident you match a certain risk/reward profile. If they're piling money into US and US-acquired companies it implies expectations are lower for the European counterparts. The most emblematic trend in recent times to signal this is how Europe has had to focus on legislating ai to seem remotely relevant while the US and China dominate actual innovation in the field. If that's not admittance that the industry is uncompetitive I don't know what is.
I've heard some opinions about technicalities for small young companies which are easier in California than in Europe. Capital and networking are important, but it's something which changes slower, and some efforts could be put towards improving the regulatory environment.
Austria here. Relatively high corporate taxes (25% on corporate profits, then 27% on distributed profits to shareholders if I remember correctly), and it's hard to give employees shares. The latter they are trying to fix now by adding a new company type called a FlexCorp which essentially works like a GmbH, but you can give out up to 25% of non-voting shares to employees in a simplified process. I don't know how attractive that is, it sounds dumb to me because I don't understand why they can't be normal shares and your company will be named Example FlexCorp instead if Example GmbH. (Doesn't sound shady at all.)
On the funding side, we have the Austria Wirtschaftsfond, which provides angel-level funding on some level, but the amounts are relatively low and there are restrictions what the money can be spent on. (E.g. only employees, which shareholder-CEOs are not in all circumstances, etc.) Basically, it's tricky and a jungle to navigate. I have never done a US startup, but from what I saw it seemed less intricate.
On the flipside, my wife and I have a GmbH and since we got over the initial unknowns, it seem relatively straight forward to actually run the company on a day-to-day basis, provided one actually makes money.
In Europe is much more bureaucracy, and much more welfare economy, and in US is more free market.
This is exact reason for European entrepreneurs, to start business in Europe, because easier to gather smart people, but, at some scale, become much more convenient to run business in US, so an some growth step, business owners have to consider US more freedom against strict EU regulations.
A few observations: The US has the laws and infrastructure that make starting a company easy like LLCs/Incs, equity agreements & tax advantages, weak labor laws, cloud compute, accounting styles, VC money, etc. On top of that you are already in a huge uniform wealthy market with 0 need to localise on day 1. Europe (I have heard) has difficult laws around equity agreements and thus it is hard to incentivize employees or do the correct accounting. Also there is a string entrepreneurship culture in the US. Also, US poaches top talent.
Of course it is possible to do a great tech startup in Euro/UK. However, after working at a European company I can say that culture is VERY different, and that is OK! However, it makes building or running a company hard
There is a misconception that innovation comes mainly from the private sector. Its the opposite: innovation comes from the public sector.
"We pretend that the government was at best just in the background creating the basic conditions (skills, infrastructure, basic science). But the truth is that the involvement required massive risk taking along the entire innovation chain: basic research, applied research and early stage financing of companies themselves.”
>"There is a misconception that innovation comes mainly from the private sector. Its the opposite: innovation comes from the public sector."
Is there any evidence for this other than opinion pieces?
Asking sincerely.
I see arguments for both sides being the source of most innovation, but haven't seen real, valid, data-driven evidence. Granted, I haven't looked much. I have my own opinion, but want more evidence, for both arguments.
Idea, that when somebody become authoritative with power, Statists think, such people should automatically gather wisdom and Universe knowledge, to make much better decisions, than free market.
Unfortunately, in reality, authoritative with power, usually use their power for some silly things, not for people good, and usually, power are not effective. But sometimes, in very special conditions, have so obvious things to do (and these things just impossible to do on free market, like Manhattan project, or trans-American railroad), that even with very bad efficiency, just huge resources investments are enough to make huge leap.
For example, now we don't know "Manhattan project" way to achieve GAI, so even if somebody will decide to throw government resources we will not achieve GAI, will just convert resources to waste. And such things happen lot of time before, but Statists prefer to ignore such examples, they show only good examples to convince people.
To be strict, free market decision efficiency now considered at about 70% (30% of resources wasted, or one third of invested).
But authoritarian power decision efficiency, from experience of late Soviet Union, was about 5-30% (so 70-95% wasted, or from 2/3 to near all invested).
Private sector works as soon as there is demand, but the problem is that its not able to traverse large "deserts" towards new technologies. The state is better at long range exploration of not "colonizeable" capabilities pushing roots and tendrils over the deserts and mountains into new valleys.
Europe also needs some way to regulate US startups (and big tech a la Microsoft) price dumping “competitive” practices. Underpricing applications, SaaS and Cloud services for years is a sure way to kill EU startups. EU tech companies do not have the capital to play price wars. The customer, in the end, loses, once vendor-locked and forced to receive significant price increases.
Nobody is forcing EU companies to use AWS/GCP/MS/Oracle, the developers and managers are eating their architecture evangelism like crackheads and listening to platform and framework influencers as if they were prophets. We have dedicated positions for managing AWS permissions and user models. Short research will easily reveal a range of EU based service providers with APIs and SDKs.
It's nearly impossible to find a company in Europe that is not completely dependent on Microsoft technology. And Microsoft is aggressively pushing companies towards Azure.
As an employee or job candidate try to object the slightest against Windows on your laptop, or Azure for services and very quickly your monthly income will approach zero. Companies are looking for specialists with ten years of experience in Windows and Azure, who will do stuff with Windows and Azure. The decision making generous for MS is happening higher up in the corporate hierarchy. Folks higher up in corporate hierarchy want to pay off their leveraged mortgages, drive BMW or Mercedes, and vacation in Santorini, they don't care about dumb computer stuff.
The pinnacle of IT and internet tech which can come out of France is selling perfumes, wine, and leather handbags over internet. They can sell the articles or entire business to Americans or not, doesn't matter.
Its just a centralization thing. All things go towards the capital of the empire. It was madrid,paris, then london - for now it is the bay area?
Europe needs to stop clinging to the milk cows of the past. The car industry is a dieing endavour, highly disruptable due to dependence on fossil fuels.
Ironically, in my opinion, eastern europe is setup much better for software. Im regularly blown away what the chech republic, poland and the baltic tigers do - compared to west europe.
I mean, if European society - and particularly European governments, as "conscious" agents of that - wants to have better startup results, do they make it's easier to achieve from their side, do they see any problems with European modern approach which they can improve?