4 ms·

Which regulations have "resulted in low investment and slow innovation"?

by matthewmacleod 9y ago

dmitrygr 9y ago
High tax rate and difficulty of firing someone would be my two guesses
- matthewmacleod 9y ago
  The tax rate is broadly comparable to the US. Tech companies’ success is therefore based on their ability to fire people without cause? Honestly, this sort of thing is often thrown around as a trope and I don’t think it holds much water.
- xxs 9y ago
  which particular tax rate?
- spython 9y ago
  Difficulty firing someone makes people feel secure at work. Security is one of the essential things you need to be innovative. Desperation and anxiety doesn't drive innovation.
  - dmitrygr 9y ago
    Perceived difficulty in firing causes much more cautious hiring. If I told you that the next car you buy, you'd have to use for 10 years with no options for a change, you'd certainly pick differently than you do now, knowing you could always replace it.
    - krageon 9y ago
      I encourage you to maybe go the the EU at some point in your life (and have some meaningful interaction with corporate life there). That will demonstrate to you that the sentiment you're addressing is patently false: Companies in the EU vigorously and constantly hire new people, even though employees have rights.
kuschku 9y ago
Not regulations, incompatible regulations. If you create a startup in SV, you can easily sell to the whole US. In the EU, you’ll need to obey 28 different laws, 28 different standards, and file 28 different tax forms. This is currently the single biggest hurdle for startups in the EU. The second, of course, is that people seem less willing to throw billions at risky concepts just so one maybe gets big enough.
- matthewmacleod 9y ago
  Well, that’s not regulation. In general, to sell across the EU, you have to comply with the regulations of the single market. That’s largely harmonised; there’s some friction, but it’s not anything like dealing with 28 totally independent countries. It’s surprisingly easy to sell so the whole EU market. Different social attitudes to risk, and a language barrier, are no doubt much more pressing concerns.
  - kuschku 9y ago
    If the field you’re selling in is already harmonised, if you only have employees in one country, and if you have someone else do the VAT for you. All these can be potential roadblocks that make it harder.
- ocdtrekkie 9y ago
  Given how much of EU's economic law is managed centrally, is this drastically more significant than say... the 50 different states' regulations that US companies have to follow and contend with?
  - kuschku 9y ago
    I’m not quite sure, but I know that in the US many companies "forget" about sales tax if they’re located in a state without, without much trouble. In the EU, VAT compliance can definitely become an issue, especially with small projects. Not so much an issue for VC startups, but definitely one for bootstrapped ones. The only way to get a large enough market to survive is to sell to the entire EU, but that means much more work with VAT compliance, and translations.

Which regulations have "resulted in low investment and slow innovation"?

dmitrygr 9y ago

High tax rate and difficulty of firing someone would be my two guesses

matthewmacleod 9y ago
The tax rate is broadly comparable to the US. Tech companies’ success is therefore based on their ability to fire people without cause? Honestly, this sort of thing is often thrown around as a trope and I don’t think it holds much water.
xxs 9y ago
which particular tax rate?
spython 9y ago
Difficulty firing someone makes people feel secure at work. Security is one of the essential things you need to be innovative. Desperation and anxiety doesn't drive innovation.
- dmitrygr 9y ago
  Perceived difficulty in firing causes much more cautious hiring. If I told you that the next car you buy, you'd have to use for 10 years with no options for a change, you'd certainly pick differently than you do now, knowing you could always replace it.
  - krageon 9y ago
    I encourage you to maybe go the the EU at some point in your life (and have some meaningful interaction with corporate life there). That will demonstrate to you that the sentiment you're addressing is patently false: Companies in the EU vigorously and constantly hire new people, even though employees have rights.

kuschku 9y ago

Not regulations, incompatible regulations. If you create a startup in SV, you can easily sell to the whole US. In the EU, you’ll need to obey 28 different laws, 28 different standards, and file 28 different tax forms. This is currently the single biggest hurdle for startups in the EU. The second, of course, is that people seem less willing to throw billions at risky concepts just so one maybe gets big enough.

matthewmacleod 9y ago
Well, that’s not regulation. In general, to sell across the EU, you have to comply with the regulations of the single market. That’s largely harmonised; there’s some friction, but it’s not anything like dealing with 28 totally independent countries. It’s surprisingly easy to sell so the whole EU market. Different social attitudes to risk, and a language barrier, are no doubt much more pressing concerns.
- kuschku 9y ago
  If the field you’re selling in is already harmonised, if you only have employees in one country, and if you have someone else do the VAT for you. All these can be potential roadblocks that make it harder.
ocdtrekkie 9y ago
Given how much of EU's economic law is managed centrally, is this drastically more significant than say... the 50 different states' regulations that US companies have to follow and contend with?
- kuschku 9y ago
  I’m not quite sure, but I know that in the US many companies "forget" about sales tax if they’re located in a state without, without much trouble. In the EU, VAT compliance can definitely become an issue, especially with small projects. Not so much an issue for VC startups, but definitely one for bootstrapped ones. The only way to get a large enough market to survive is to sell to the entire EU, but that means much more work with VAT compliance, and translations.