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> The only way India can develop its own companies is by creating an artificial scarcity thru regulation. Programmers that don't work at tech companies work so

> The only way India can develop its own companies is by creating an artificial scarcity thru regulation. Programmers that don't work at tech companies work somewhere else, investors that don't invest in tech companies invest in something else. So it's wrong to say that just because a country doesn't have any tech companies it's poorer, and that protectionism for tech companies will make it richer. (This insight, and the ideology it refutes - mercantilism - are 200 years old[1].) > I see quite often asked Why does Europe not have tech giants? The easy answer is that they already exist and there is no way that small start-ups can fight them. Germany alone has SoundCloud and SAP. [1]: http://bastiat.org/en/twisatwins.html http://bastiat.org/en/twisatwins.html

boulos 8y ago
> Germany alone has SoundCloud and SAP. I find it amusing that you'd mention these two in the same breath. I'm glad SoundCloud didn't go under, but it's not like it's all wine and roses over there [1]. There are several European unicorns in the last decade (Spotify and Adyen for example), if you wanted to focus on startups. Alternatively, if the focus is companies in Germany that hire software engineers like SAP does, there's always Siemens, multiple German financial industry firms, SUSE, and so on. [1] https://techcrunch.com/2017/08/11/soundcloud-saved/ https://techcrunch.com/2017/08/11/soundcloud-saved/
cabalamat 8y ago
> Programmers that don't work at tech companies work somewhere else Yes, but maybe at a lower salary > investors that don't invest in tech companies invest in something else Maybe at a lower return. Countries that don't invest in high-growth sectors (which means high-tech) will over the long run have lower growth rates than ones that do. > So it's wrong to say that just because a country doesn't have any tech companies it's poorer, and that protectionism for tech companies will make it richer. When companies have a monopoly, they are able to generate an economic rent, which makes everyone except their shareholders poorer. Furthermore there is the sovereignty argument: a country not in control over its information infrastructure isn't really independent. So if a country can generate its own equivalents of Twitter, Facebook, Android, Google search, etc, there may well be a good case for it doing so.
- amadeuspagel 8y ago
  The point was not that those programmers and investors are just as well off without protectionism (obviously not), but that the country as a whole is better off because the people that before would have produced knockoffs off western companies now produce something new.

boulos 8y ago

> Germany alone has SoundCloud and SAP. I find it amusing that you'd mention these two in the same breath. I'm glad SoundCloud didn't go under, but it's not like it's all wine and roses over there [1]. There are several European unicorns in the last decade (Spotify and Adyen for example), if you wanted to focus on startups. Alternatively, if the focus is companies in Germany that hire software engineers like SAP does, there's always Siemens, multiple German financial industry firms, SUSE, and so on. [1] https://techcrunch.com/2017/08/11/soundcloud-saved/ https://techcrunch.com/2017/08/11/soundcloud-saved/

cabalamat 8y ago

> Programmers that don't work at tech companies work somewhere else Yes, but maybe at a lower salary > investors that don't invest in tech companies invest in something else Maybe at a lower return. Countries that don't invest in high-growth sectors (which means high-tech) will over the long run have lower growth rates than ones that do. > So it's wrong to say that just because a country doesn't have any tech companies it's poorer, and that protectionism for tech companies will make it richer. When companies have a monopoly, they are able to generate an economic rent, which makes everyone except their shareholders poorer. Furthermore there is the sovereignty argument: a country not in control over its information infrastructure isn't really independent. So if a country can generate its own equivalents of Twitter, Facebook, Android, Google search, etc, there may well be a good case for it doing so.

amadeuspagel 8y ago
The point was not that those programmers and investors are just as well off without protectionism (obviously not), but that the country as a whole is better off because the people that before would have produced knockoffs off western companies now produce something new.