7 ms·

Serious question: Why is the EU so far behind in tech company influence/leadership compared to the US and Asia? Europe has successful tech enterprises, but sure

by golfer 6y ago

Serious question: Why is the EU so far behind in tech company influence/leadership compared to the US and Asia? Europe has successful tech enterprises, but surely is capable of so much more on a global scale.

thu2111 6y ago
That's a deep question that is asked nowhere near enough. And when it is asked, my experience has been it's mostly been Americans doing the asking. Here's a story. I was once visiting Silicon Valley for work and getting dinner with a friend who lives there. I'm a Brit who lives in central Europe. On the way over I'd bought a copy of Der Spiegel, which likes to write tabloid-esque articles about the Power Of Tech Firms. The front cover this particular week was one such article and I had found it kind of funny, so I was showing it to my friend and we were discussing it. Next to us in the restaurant was another table with an elderly gentlemen dining alone. Suddenly he leaned over and joined our conversation. It turned out he was some sort of economics academic and one of his 'research interests' was this question of why the EU doesn't generate tech firms. He had a lot of insight and I've never forgotten that discussion: it has influenced my thoughts about how to set up my own software firm. One of the points he made is that outside the USA there's no real culture of granting early employees equity, whereas in the US tech industry that's standard. ARM is apparently one of the few exceptions, in which the co-founders did in fact hand out equity early on. The incentivising effect this produces is profound. I've felt it myself - when I joined a startup, having an ownership stake as well as a salary made the difference between doing the work, and genuinely caring about the company, being willing to get into arguments and fight for what was important, etc. So a culture gap with respect to ownership is perhaps one reason. The man made other points that were more commonly observed, like the different approaches to regulation. A few days ago people were surprised to discover that the UK/EU Brexit treaty mandates SHA-1 for some obscure data interchange format. This is typical for the EU. In the US people at least pretend to care about the innovation-harming impact of regulation, even on the left. There's zero culture of that in the EU. The EU views more regulation as inherently good, and anything that isn't caked in hundreds of pages of regulations as being merely on the TODO list. It also brooks no dissent: one of the EU's "red lines" in the negotiations was that they didn't want the UK to undercut their "standards", defined as regulation. Any country that attempts to deregulate gets taken to court by the EU Commission itself, in its own courts, which almost always rule in favour of the Commission regardless of what the law actually says. This creates a one-way ratchet of ever more convoluted and obsolete rules, which in turn imposes a thicket of complexity costs on companies that have other things to focus on. Many of these rules are justified on the grounds of making trade easier but often have the opposite effect. Finally there are the very real cultural aspects. The US/Valley culture practically celebrates failure. This isn't necessarily good - failure is still failure, but family and friends at least seem to be pretty supportive of entrepreneurs in general and "failure" is very flexibly defined. For instance creating a company that never makes money isn't a problem in the US thanks to a mix of this culture and bottomless VC money. Whereas that would be perceived as failure by family and friends in Europe.
- Krasnol 6y ago
  > For instance creating a company that never makes money isn't a problem in the US thanks to a mix of this culture and bottomless VC money. Whereas that would be perceived as failure by family and friends in Europe. I guess that's related to the US dept culture too. Not having money but borrowing it for all kinds of things and with that stacking dept upon dept is quite normal in the US while over here at the continent you usually want to pay it back asap. So not having money or working for a company which doesn't generate any must feel much better in the US. I would be terrified. I also wouldn't work for some startup which won't pay be but instead preach something about family values for example. Earning money and owning stuff that I buy feels great. Wouldn't want to miss it.
  - amzans 6y ago
    Interestingly, in German the word for debt - “schuld” - is the same as the word for guilt. Having lived in Germany for 7+ years, I noticed there’s a strong sentiment against owing money in general. Odd, considering the crazy high real-state prices these days. People also seem to save a lot, and consume much less than in other western nations I’ve lived at, or visited. This may be causing broad economic issues as the money is there, it’s just not moving around as much [1]. [1] https://www.bbc.com/news/business-50213411 https://www.bbc.com/news/business-50213411
    - Krasnol 6y ago
      True but there is a difference between "jemandem etwas schulden" and a actual credit for a house or something: Owing someone you know money is probably the worst. You want to get rid of that "Schuld" asap. Even if it's an Euro you borrowed for an Einkaufswagen. Than there is the "credit" for things you should actually pay from money you have or otherwise not buy at all. Like a fridge or a TV or something like that. You usually don't go around and tell other people that you did that. You pretend that you actually paid for it and that it's yours. This is also where US debt-culture comes into Europe though. You can see for years now that shops encourage going into debt for those kind of products. They try to normalize it because it's easy to hide and pretend. Third are really big investments like a house or a business. Taking a credit there and discussing those with your friends and relatives is nothing that is frowned upon. Nobody expects you to have that kind of money (and if you had, you'd probably not admit to it).
shaicoleman 6y ago
There's a good analysis video about it by TechAltar: How Europe lost its tech companies (2017) https://www.youtube.com/watch?v=zSU5MFPn6Zk https://www.youtube.com/watch?v=zSU5MFPn6Zk
flembat 6y ago
Partly we are all hopelessly impressed by American salesmanship. For example our businesses ignored things like the Acorn Archimedes and bought PCs from IBM instead.
- systemvoltage 6y ago
  First step would be to build better products and services.
biggermike 6y ago
I can't speak for the entirety of the Europe but from my experience with certain countries in the EU, there is a pervasive culture of avoiding risk at all costs in favor of stability. The culture extends from the government to investors and even employees. Government has no appetite for creative destruction and pushes policy favoring large incumbents over upstarts. Investors have no appetite for risk and only seek conservative investments. The best minds (that don't leave the EU) would rather work for large companies, schools, government, etc. than at smaller, riskier organizations that may not be around in a few years. My family in Europe thought I was a loser and/or crazy for leaving a job as an adjunct professor to work at a 100-person startup. It makes no sense to us but it's understandable to someone who views landing a lifetime cushy bureaucratic job as the gold standard.
audunw 6y ago
Why do you think EU is behind in tech? As pointed out elsewhere in this thread, the lithography machines used by all state of the art IC nodes is designed in Europe. It’s one of the most complex machines on the planet. Then there’s mega projects like LHC and ITER (international projects, but it’s not pure chance that they’re located in Europe) and Wendelstein 7-X. My pet example is Nordic Semiconductor, which has an insanely good position in the Bluetooth LE device market. What’s also interesting is that two of the major competitors also design their chips in Norway. Although those companies do illustrate one problem in Norway (and perhaps Europe in general): the lack of capital at certain stages. In the IC businesses it seems most companies are acquired by US companies eventually. Let’s look at EVs. Europe doesn’t have Tesla. But seems like most European car makers are doing OK with EVs. Arguably better than US incumbent car makers. VWs new platform is one of the most promising right now, although this project has shown that VW has a problem with software engineering. But so does most other older car companies in the world. There are also some interesting start ups that’s more focused on designing/supplying components, such as Rimac and Kreisel. Rimac seems to go toe-to-toe with Tesla on extreme performance. I believe a lot of robots used in advanced manufacturing is German as well? In general I have the impression that Europe is very strong in designing/making components and manufacturing machines and such. Things that the end consumer never hears about. Very few have heard about ASML, but everyone has heard about Intel. So maybe that contributes to the impression that EU is behind on tech. Europe has also been ahead of the US in adopting tech on the consumer side in several areas. The US was in the stone age for a long time when it came to banking and payment for instance. How do you measure being behind/ahead in tech?
- TulliusCicero 6y ago
  Why people have this perception seems pretty clear to me. Just comparing Europe to the US: The US has both the major desktop/laptop CPU designers, as well as both desktop/laptop GPU designers. Of the three major desktop/laptop OSes, two are American, and the last doesn't belong to any particular country, but the primary creator moved from Europe to the US permanently. The two major smartphone OSes are made by American companies. Two biggest browsers, again, Americans. Maybe three, if you count Mozilla (though Samsung is probably around there as well). Huge internet/software tech companies that consumers interact with? Facebook, Microsoft, Amazon, Google, Apple are all American. Europe has no equivalent to these, all they can boast is a few smaller ones like Spotify, or business facing giants like SAP (equivalent to that in the US would probably be like Oracle or IBM). While obviously Europe doesn't have a complete dearth of local software, in terms of major consumer hits, especially the kind that get play outside of the region they originated in -- not much of that going on. Also, I work at Google Munich, and it's pretty telling how rare it is for people here to get 'poached' by other local tech companies. It happened to a few people I knew...to go to Lyft's Munich office. Other than that, I can't think of any. When it comes to enticing engineers, there just aren't any German tech companies that play in the same league as Google.

by golfer 6y ago

thu2111 6y ago

That's a deep question that is asked nowhere near enough. And when it is asked, my experience has been it's mostly been Americans doing the asking. Here's a story. I was once visiting Silicon Valley for work and getting dinner with a friend who lives there. I'm a Brit who lives in central Europe. On the way over I'd bought a copy of Der Spiegel, which likes to write tabloid-esque articles about the Power Of Tech Firms. The front cover this particular week was one such article and I had found it kind of funny, so I was showing it to my friend and we were discussing it. Next to us in the restaurant was another table with an elderly gentlemen dining alone. Suddenly he leaned over and joined our conversation. It turned out he was some sort of economics academic and one of his 'research interests' was this question of why the EU doesn't generate tech firms. He had a lot of insight and I've never forgotten that discussion: it has influenced my thoughts about how to set up my own software firm. One of the points he made is that outside the USA there's no real culture of granting early employees equity, whereas in the US tech industry that's standard. ARM is apparently one of the few exceptions, in which the co-founders did in fact hand out equity early on. The incentivising effect this produces is profound. I've felt it myself - when I joined a startup, having an ownership stake as well as a salary made the difference between doing the work, and genuinely caring about the company, being willing to get into arguments and fight for what was important, etc. So a culture gap with respect to ownership is perhaps one reason. The man made other points that were more commonly observed, like the different approaches to regulation. A few days ago people were surprised to discover that the UK/EU Brexit treaty mandates SHA-1 for some obscure data interchange format. This is typical for the EU. In the US people at least pretend to care about the innovation-harming impact of regulation, even on the left. There's zero culture of that in the EU. The EU views more regulation as inherently good, and anything that isn't caked in hundreds of pages of regulations as being merely on the TODO list. It also brooks no dissent: one of the EU's "red lines" in the negotiations was that they didn't want the UK to undercut their "standards", defined as regulation. Any country that attempts to deregulate gets taken to court by the EU Commission itself, in its own courts, which almost always rule in favour of the Commission regardless of what the law actually says. This creates a one-way ratchet of ever more convoluted and obsolete rules, which in turn imposes a thicket of complexity costs on companies that have other things to focus on. Many of these rules are justified on the grounds of making trade easier but often have the opposite effect. Finally there are the very real cultural aspects. The US/Valley culture practically celebrates failure. This isn't necessarily good - failure is still failure, but family and friends at least seem to be pretty supportive of entrepreneurs in general and "failure" is very flexibly defined. For instance creating a company that never makes money isn't a problem in the US thanks to a mix of this culture and bottomless VC money. Whereas that would be perceived as failure by family and friends in Europe.

Krasnol 6y ago
> For instance creating a company that never makes money isn't a problem in the US thanks to a mix of this culture and bottomless VC money. Whereas that would be perceived as failure by family and friends in Europe. I guess that's related to the US dept culture too. Not having money but borrowing it for all kinds of things and with that stacking dept upon dept is quite normal in the US while over here at the continent you usually want to pay it back asap. So not having money or working for a company which doesn't generate any must feel much better in the US. I would be terrified. I also wouldn't work for some startup which won't pay be but instead preach something about family values for example. Earning money and owning stuff that I buy feels great. Wouldn't want to miss it.
- amzans 6y ago
  Interestingly, in German the word for debt - “schuld” - is the same as the word for guilt. Having lived in Germany for 7+ years, I noticed there’s a strong sentiment against owing money in general. Odd, considering the crazy high real-state prices these days. People also seem to save a lot, and consume much less than in other western nations I’ve lived at, or visited. This may be causing broad economic issues as the money is there, it’s just not moving around as much [1]. [1] https://www.bbc.com/news/business-50213411 https://www.bbc.com/news/business-50213411
  - Krasnol 6y ago
    True but there is a difference between "jemandem etwas schulden" and a actual credit for a house or something: Owing someone you know money is probably the worst. You want to get rid of that "Schuld" asap. Even if it's an Euro you borrowed for an Einkaufswagen. Than there is the "credit" for things you should actually pay from money you have or otherwise not buy at all. Like a fridge or a TV or something like that. You usually don't go around and tell other people that you did that. You pretend that you actually paid for it and that it's yours. This is also where US debt-culture comes into Europe though. You can see for years now that shops encourage going into debt for those kind of products. They try to normalize it because it's easy to hide and pretend. Third are really big investments like a house or a business. Taking a credit there and discussing those with your friends and relatives is nothing that is frowned upon. Nobody expects you to have that kind of money (and if you had, you'd probably not admit to it).

shaicoleman 6y ago

There's a good analysis video about it by TechAltar: How Europe lost its tech companies (2017) https://www.youtube.com/watch?v=zSU5MFPn6Zk https://www.youtube.com/watch?v=zSU5MFPn6Zk

flembat 6y ago

Partly we are all hopelessly impressed by American salesmanship. For example our businesses ignored things like the Acorn Archimedes and bought PCs from IBM instead.

systemvoltage 6y ago
First step would be to build better products and services.

biggermike 6y ago

I can't speak for the entirety of the Europe but from my experience with certain countries in the EU, there is a pervasive culture of avoiding risk at all costs in favor of stability. The culture extends from the government to investors and even employees. Government has no appetite for creative destruction and pushes policy favoring large incumbents over upstarts. Investors have no appetite for risk and only seek conservative investments. The best minds (that don't leave the EU) would rather work for large companies, schools, government, etc. than at smaller, riskier organizations that may not be around in a few years. My family in Europe thought I was a loser and/or crazy for leaving a job as an adjunct professor to work at a 100-person startup. It makes no sense to us but it's understandable to someone who views landing a lifetime cushy bureaucratic job as the gold standard.

audunw 6y ago

Why do you think EU is behind in tech? As pointed out elsewhere in this thread, the lithography machines used by all state of the art IC nodes is designed in Europe. It’s one of the most complex machines on the planet. Then there’s mega projects like LHC and ITER (international projects, but it’s not pure chance that they’re located in Europe) and Wendelstein 7-X. My pet example is Nordic Semiconductor, which has an insanely good position in the Bluetooth LE device market. What’s also interesting is that two of the major competitors also design their chips in Norway. Although those companies do illustrate one problem in Norway (and perhaps Europe in general): the lack of capital at certain stages. In the IC businesses it seems most companies are acquired by US companies eventually. Let’s look at EVs. Europe doesn’t have Tesla. But seems like most European car makers are doing OK with EVs. Arguably better than US incumbent car makers. VWs new platform is one of the most promising right now, although this project has shown that VW has a problem with software engineering. But so does most other older car companies in the world. There are also some interesting start ups that’s more focused on designing/supplying components, such as Rimac and Kreisel. Rimac seems to go toe-to-toe with Tesla on extreme performance. I believe a lot of robots used in advanced manufacturing is German as well? In general I have the impression that Europe is very strong in designing/making components and manufacturing machines and such. Things that the end consumer never hears about. Very few have heard about ASML, but everyone has heard about Intel. So maybe that contributes to the impression that EU is behind on tech. Europe has also been ahead of the US in adopting tech on the consumer side in several areas. The US was in the stone age for a long time when it came to banking and payment for instance. How do you measure being behind/ahead in tech?

TulliusCicero 6y ago
Why people have this perception seems pretty clear to me. Just comparing Europe to the US: The US has both the major desktop/laptop CPU designers, as well as both desktop/laptop GPU designers. Of the three major desktop/laptop OSes, two are American, and the last doesn't belong to any particular country, but the primary creator moved from Europe to the US permanently. The two major smartphone OSes are made by American companies. Two biggest browsers, again, Americans. Maybe three, if you count Mozilla (though Samsung is probably around there as well). Huge internet/software tech companies that consumers interact with? Facebook, Microsoft, Amazon, Google, Apple are all American. Europe has no equivalent to these, all they can boast is a few smaller ones like Spotify, or business facing giants like SAP (equivalent to that in the US would probably be like Oracle or IBM). While obviously Europe doesn't have a complete dearth of local software, in terms of major consumer hits, especially the kind that get play outside of the region they originated in -- not much of that going on. Also, I work at Google Munich, and it's pretty telling how rare it is for people here to get 'poached' by other local tech companies. It happened to a few people I knew...to go to Lyft's Munich office. Other than that, I can't think of any. When it comes to enticing engineers, there just aren't any German tech companies that play in the same league as Google.