10 ms·

Only 6 of the 50 largest companies are in Europe. LVMH is highest at #18

35 points by golfer 5y ago

acchow 5y ago
And I count 13 for the SF Bay Area. This concentration of wealth generation is astounding.
- Ekaros 5y ago
  I have long questioned what actually is "wealth"...
  - kelnos 5y ago
    I think in this sense "wealth" is just "number of units of currency in your bank account". Perhaps you mean you question what "value" actually is? I would definitely agree with that.
  - mustafa_pasi 5y ago
    You should read Paul Graham's best essay[1] then. It is not the only possible definition of wealth, but I think it is a very well worded definition, that really helps give a sense of what wealth really is. [1] http://www.paulgraham.com/wealth.html http://www.paulgraham.com/wealth.html
- jollybean 5y ago
  Profit concentration is not the same as wealth creation in the broader sense. Google demolished the newspapers classified ads. While probably more effective than otherwise ... it didn't all come out of nowhere.
  - golfer 5y ago
    I'd say Craigslist did more to demolish newspaper classified ads than Google.
adamnemecek 5y ago
Idk if that’s something to celebrate.
jeffreyrogers 5y ago
Since this is done by market cap it leaves out a lot of private companies (which don't have a market cap by definition). Probably wouldn't change the status of Europe too much (although Glencore would be on the list if private companies were included).
- ChuckNorris89 5y ago
  Indeed, AFAIK, companies like IKEA and Bosch are privately owned.
  - mxschumacher 5y ago
    Also: Ineos, vitol, Aldi, Auchan, Schwarz, Liebherr
  - adventured 5y ago
    Europe doesn't have much in the way of private $200+ billion giants. It's pretty rare that those go unnoticed or untracked in terms of value. When they're around in the US or Europe, you know their names. Bloomberg and Forbes, among others, go to great lengths to track large private companies. Ikea would be valued at less than Target if it were public (it's far smaller than Target, with better margins). It takes a $200 billion market cap to crack the top 50, Ikea isn't close. Bosch would comparable to or a bit larger than 3M in valuation. They're not particularly a growing business, they've been stagnant for a long time, that would hit the multiple they'd receive, as would their segment (industrial) and that they're Europe based (European companies almost always receive a lower multiple than their US peers). They'd be worth more than Ikea, granted.
umeshunni 5y ago
EU is about 15% of global GDP (and rapidly declining), so perhaps this isn’t that out of line (~12% of top 50).
reader_mode 5y ago
Am I the only one horrified looking at those graphs explode in the last couple of years ?
- jollybean 5y ago
  It's the financialization of economies as a form of Monetary Policy 'Supply Side' support. Home prices and valuations are skyrocketing is a different kind of inflation, just not the one we're used to. Regular inflation is hitting hard due to COVID etc. so we're going to see the populist result of that soon.
Calvin02 5y ago
From scanning the list it seems like none of the 6 were started in the last 15+ years. That should be alarming to EU policy makers. As this divide grows, I worry that Europe may resort to protection mechanisms as a way to shield local companies and give them a chance to "grow". The future is more protectionism and less free trade. And that's not good for anyone.
- missedthecue 5y ago
  It's good for those that own the protected companies
  - Sr_developer 5y ago
    Exactly,and to those "protected companies" you should add The Federal reserve The World-Bank The IMF and in general all the Bretton-Woods establishment designed and operated to ensure US economic supremacy. It is just not "those silly old-fashioned Europeans" playing the protectionism game.
- deleted 5y ago
  [deleted]
- davedx 5y ago
  Yes and no. Companies like BKNG and Adyen are doing very very well in the Netherlands: 94B and 58B respectively, both comparatively new companies. It’s just less easy to scale up here than it is in the US with a huge economy and one language. Prosus is also there on the first page
  - deleted 5y ago
    [deleted]
  - tpush 5y ago
    BKNG is American; The Dutch Booking.com was sold to what is now BKNG in 2005 for $133MM.
- jollybean 5y ago
aidenn0 5y ago
More evidence that there is more competition in Europe?
- missedthecue 5y ago
  Or that Europe missed out on the technology revolution in a huge way. The biggest company in the world is Apple, a mobile phone producer. But I don't think anyone would say that the mobile phone industry lacks competition. I can name 10 brands off the top of my head.
  - mustafa_pasi 5y ago
    I agree, but it is more the costumer facing tech that the EU does not do well. All of FAANG started out as B2C tech products/services. In these markets the EU is at a natural disadvantage compared to the US, China and maybe even Russia. It is much easier to grow if you have just one huge country that you can grow within before expanding internationally. But then one should also ask, why hasn't such a B2C tech company emerged in Germany or France or Italy, all of which have sizable populations. I guess the tech people in these countries where getting hired by traditional industries to work on boring industrial applications. And the finance people were in no mood to finance a web search engine or a social network in those days. We had lots of Amazons and lots of Facebooks but they never attempted to expand beyond the national borders of their respective countries. I guess some of them were relatively profitable, so maybe they thought they had a nice deal going on, until the American giants came knocking on the door.
  - IkmoIkmo 5y ago
    Does it help to be another non-Chinese Oppo or Xiaomi? There's not a ton of profit to be made competing with Apple and Samsung in the West. There's opportunities elsewhere, but it's hard competing with low-cost Chinese smartphone companies in low/middle income markets, particularly in their Chinese homemarket. Instead there's tons of opportunities investing in the mobile space. From the iPhone 12 chip built with a Dutch ASML machine, to companies like MessageBird or Adyen to name a few more Dutch companies. I agree there's plenty of competition in the US, but there's no other single market that even came close to the US until China came along, but even that is just a large number of people making an average of 10k a year. The EU is a big market but so is 'Asia', at the end of the day, even with a lot of regulatory integration, they're still separate markets that each require their own approach, very much unlike the US. It's no surprise that lots of product launch rollouts in the EU of US companies are slow and skip lots of EU countries, compared to launches in the US/Asia. It's not because the EU has 'missed out on the tech revolution', it's because the EU isn't really a single market and it's really tricky to launch in 27 different countries. That's true for EU companies just the same as it is for non-EU companies. It's why there's hardly a European Amazon, but there's tons of local EU companies that I like just as much (e.g. Bol.com in the Netherlands). They just can't easily go beyond their borders, and eventually get bought by a US/Asia player with a massive domestic market which now has a warchest to dominate the small EU players, too.
tormeh 5y ago
Economist ran an article on this: https://www.economist.com/briefing/2021/06/05/once-a-corporate-heavyweight-europe-is-now-an-also-ran-can-it-recover-its-footing https://www.economist.com/briefing/2021/06/05/once-a-corpora... We're in the service economy now, and Europe has no real single market for services, due to all kinds of national regulations that differ throughout the block. Nor does it have well-developed financial and labor markets, partly also because they are currently partitioned by nationality. Its stock exchanges are too many and too small, etc. The list goes on. For many big European companies, an astounding percentage of revenue comes from the US or China. But if you start a startup building for US/China from the start, why would you want the HQ to be somewhere in Europe? Edit: This also means that the story is very very different for products that can be shipped in boxes. Europe does extremely well in cars, beverages, clothing, chemicals and that sort of thing. Also electrical utilities. No idea why, tbh.
- tw04 5y ago
  https://archive.is/HYpNg https://archive.is/HYpNg
- minimaul 5y ago
  Another decent barrier here is language. Europe has lots of different languages in use, and while a lot of people speak english it's far from universal. It makes it quite tricky to offer services across the whole of Europe without a lot of investment.
  - tormeh 5y ago
    It is a barrier, but not a huge one, assuming you're talking about software. Translation is pretty cheap, all things considered. For consulting businesses and employees it's a different story, obviously. The real problem, particularly in the B2B space, is that if you build something for nation X, that solution might not work, be relevant or even legal in nation Y.
    - minimaul 5y ago
      Translation for software is cheap, but internationalisation can be tricky - different languages have vastly different rules. Europe's not too bad here though. There are other costs though - such as support. In the US you can grow pretty well with a large market providing support in one or maybe two languages. In Europe, you need to provide support in English, German, Dutch, French, Italian, Spanish... and there's more besides, and some tricky local dialects. edit: also the cost of maintaining translation as you grow or make changes means it's not a one-off cost, it's a constant extra burden - even if it's not a huge one. For a larger business it's plenty doable, for a small startup (especially a non-funded one) it's very difficult. edit 2: also I'm meaning mostly western/central/northern Europe. If you go further east things get trickier still.
varjag 5y ago
The USA had a few trillion freshly flushed into the economy, the EU (yet) had not.
jeffrallen 5y ago
I'm pretty sure that all of the employees of the small specialized privately owned companies in Switzerland and Germany really appreciate the lack of giant companies, which historically use their power to erode worker's rights.
- dwhitney 5y ago
  I work for a FAANG. Among the many benefits we receive, a large chunk of our pay comes in the form of equity. When the price of the stock goes up, so does my effective pay. Also there is free food and stuff.
  - jeffrallen 5y ago
    One of the A in FAANG drives their assembly contractor so hard, they had a problem with worker suicides. The other A in FAANG busts unions and instead of providing safe working conditions, just parked ambulances outside to load up workers as they fell from heatstroke. So yeah, um, enjoy your free food, dude.
    - reader_mode 5y ago
      Yeah by that logic here's an example of Germany being the pinnacle of worker rights [1]. [1] https://www.euronews.com/2020/05/12/covid-19-outbreaks-in-german-slaughterhouses-expose-grim-working-conditions-in-meat-indust https://www.euronews.com/2020/05/12/covid-19-outbreaks-in-ge...
- ChuckNorris89 5y ago
  That's bullshit. In Austria (similar to Germany and Switzerland in many regards), plenty of small specialized privately owned companies are actively fighting to erode worker's rights (greed has no culture and knows no borders). A couple o years ago, local industry lobby groups got the government to legalize the 12h workday and one top company I interviewed for had a time punching device next to the coffee machine so that employees could punch out during a coffee break as the company considered coffee breaks as non-working time for the employees and did not count to your 8h/day working time, just like your lunch break.
amedvednikov 5y ago
High taxes and bureaucracy everywhere in Europe.
- mxschumacher 5y ago
  California and New York aren't exactly low tax and low bureaucracy either. Yet still massively influential
  - amedvednikov 5y ago
    California's taxes are high, but still much lower than in most of Europe. For example in France, to pay 100 euros in salary, the employer needs to spend about 250 euros.
ortusdux 5y ago
We used to make steel! -David Mitchell
tibbydudeza 5y ago
Amazed @ Adobe - they maybe have 5 software products in their portfolio.
- chrisseaton 5y ago
  Creative Cloud alone is like 20 software products - many of them massive products, critical in their industries.
  - tibbydudeza 5y ago
    How many graphic design studios/photographers can there be in the world to give them this kind of market cap ???.
    - chrisseaton 5y ago
      Millions. Graphic designers are in every non-trivial company. Professional photographers are part of every western community. Millions of amateurs edit and manage their photographs. Even relatively small media shops spend tens of thousands on Creative Cloud licenses. You already have the evidence - their market cap.
- momothereal 5y ago
  ? Adobe has over 100 software products: https://www.adobe.com/products/catalog.html https://www.adobe.com/products/catalog.html
pm90 5y ago
The EU has a larger population and land mass than the US. The EU has similar universities, mature financial systems and a common cultural heritage (Western Civ) with the US. Why is the EU not an economic and military superpower?
- chrisseaton 5y ago
  > Why is the EU not an economic and military superpower? Best I can tell, mix of apathy, resentment towards people who work hard, and generally smaller ambition and perspective. We have the same problem in the UK so it's not just the EU.
- mxschumacher 5y ago
  The EU is not a nation, but a supranational entity that binds countries that have similar goals and values. It's an amazing achievement for a continent that has seen millennia of internal war. Economically, the EU is very powerful and influential. It exerts influence through trade agreements, standards and sanctions. Individual member states have capable nuclear arsenals and are actively engaged in missions around the world.
- oezi 5y ago
  But Europe is fulfilling a lot of promises. No war for over 70 years. Free access to Healthcare, education. Safety. Less people in prison, less homicides. Less people in poverty. We learned the hard way that having military superpowers can lead to a lot of misery. Since financial markets are open for anyone to invest in anything (pretty much), I also don't get why it matters where market cap is created. For instance: Tesla has more market cap than a lot of European ICE competitors. But what VW contributes to European GDP still is much bigger than Tesla's contribution.
  - chrisseaton 5y ago
    > But Europe is fulfilling a lot of promises. No war for over 70 years. https://en.wikipedia.org/wiki/List_of_conflicts_in_Europe#21st_century https://en.wikipedia.org/wiki/List_of_conflicts_in_Europe#21...
noizejoy 5y ago
That bigger is always better seems to be a concept culturally possibly most valued in the US. But what if the “bigger is always better” mantra is actually wrong? (Many fallen empires come to mind.) Maybe it’s an overall healthier state of affairs to have less concentration of power? So maybe Europe is just fine?
- tpush 5y ago
  But the chief problem for (tech-)corporate Europe isn't that power is concentrated less than in the US. It's that Europe has less absolute or nearly no power in areas that matter a lot for their society.
  - ChuckNorris89 5y ago
    >It's that Europe has less absolute or nearly no power in areas that matter a lot for their society. Bingo. For example I, a European worker, wake up in the morning by the alarm sound of my US developed phone who's software and services are also developed in the US. I then power up my US developed laptop and use a US designed OS and read and reply to emails using a US developed solution part of an office suite also made in the US. During work, I deploy my work, which helps people book flights, to a US developed cloud solution. After work I text my friends on a US developed messaging solution and at the pub one friend keeps posting pictures to a US developed social media platform and another swipes through photos of potential mates on a US developed dating platform. Hell, even when I want to use online banking or online government services I'm still relying on mostly US tech to get the job done. How the hell is this absolute dependence on US tech not scary for Europe's sovereignty is beyond me. If the US wanted to flex its power for shits and giggles it could just ask the Microsoft, Apple and Google to turn off their services in Europe for a couple of hours and send Europe to the stone age.
    - pwlb 5y ago
      That sounds like a view from last century. FAANG multinational, sovereign companys and they are interested in money and are not interested in losing their userbase. moreover a lot of these companys have offices in europe as well, so part of these solutions are developed in europe as well. having the HQ in one country is only one aspect of a company
hbbio 5y ago
France has 4 companies in the top 100. All of them in the luxury fashion/beauty products: LVMH, L'Oreal, Hermes and Dior. Three of them were created before WW1 (that's a one) and Dior in 1946. And all of them thrive because of the lifestyle image associated to the "France" brand since then.
break_the_bank 5y ago
This reminds me of what Peter Thiel wrote about Europe in Zero to One. Europe was in the indefinite pessimism block, the world is going to crap and they don’t think they can do nothing about it. Here’s the larger paragraph from Zero to One. > Indefinite Pessimism Every culture has a myth of decline from some golden age, and almost all peoples throughout history have been pessimists. Even today pessimism still dominates huge parts of the world. An indefinite pessimist looks out onto a bleak future, but he has no idea what to do about it. This describes Europe since the early 1970s, when the continent succumbed to undirected bureaucratic drift. Today the whole Eurozone is in slow-motion crisis, and nobody is in charge. The European Central Bank doesn’t stand for anything but improvisation: the U.S. Treasury prints “In God We Trust” on the dollar; the ECB might as well print “Kick the Can Down the Road” on the euro. Europeans just react to events as they happen and hope things don’t get worse. The indefinite pessimist can’t know whether the inevitable decline will be fast or slow, catastrophic or gradual. All he can do is wait for it to happen, so he might as well eat, drink, and be merry in the meantime: hence Europe’s famous vacation mania.
- TMWNN 5y ago
  >This reminds me of what Peter Thiel wrote about Europe in Zero to One. Europe was in the indefinite pessimism block, the world is going to crap and they don’t think they can do nothing about it. Thanks for the quote; the Thiel book sounds interesting. I've been thinking about how familiar the discussion here and in the recent Economist post sounds. Isaac Asimov wrote a short story, "The Evitable Conflict" (1950), in which a future world government is divided into four regions (<https://imgur.com/N2g6DKE https://imgur.com/N2g6DKE>). Without spoiling the story, the European bloc is described as being the smallest by population, slowest to grow, becoming a backwater compared to other regions, and content to remain that way.
ralph84 5y ago
400 years of brain drain will do that
idownvoted 5y ago
While I'm inclined to chime in on Europe's lack of competitiveness there are some factors being glossed over in favor of a catchy headline here: a) market cap just captures where the financial markets see/saw most hope for gains b) which is obviously the tech-sector (2 non-tech companies in the top-10, four out of the top-15 if we don't count Visa as one) c) the pandemic has likely catapulted a lot of pharmaceutical companies into the top-50 In other words: There's either room for disruption here (meaning European companies/other sectors are undervalued) or even a pandemic with never-seen global policy responses, did not manage to break the dominance of the tech-sector.
riccardomc 5y ago
We will probably look back at this time as the golden age of information technology. Monopolistic phenomena are emerging everywhere. Things are going to change[1]. There's no real way to demonstrate that a few larger players are better than many smaller ones. Maybe is good for economies of scale, but mainly for the big fishes and only marginally for end users. [1]https://www.washingtonpost.com/business/did-big-tech-get-too-big-us-crackdown-seeks-answer-quicktake/2021/06/11/449a3a8e-caf5-11eb-8708-64991f2acf28_story.html https://www.washingtonpost.com/business/did-big-tech-get-too...
tormeh 5y ago
Why does Boeing have a higher market cap than Airbus? That seems nuts to me...
- filmgirlcw 5y ago
  Defense contracts.
yread 5y ago
Oh no Europe doesn't have enough too big to fail corporation that could lobby for more corporation-friendly policies
ubanholzer 5y ago
It's not always a benefit to have the biggest companies in the country. EU has a lot of stable SMEs, which helps the middle class to stay strong, thus creates a stable and safe environment for the people. In the US, there are about 50% of the workforce in SME, in the EU there are more than 66%. It's better and healthier to diversify.
TMWNN 5y ago
Harry Truman said in 1945 about the atomic bomb, "We thank God that it has come to us, instead of to our enemies". I feel the same way about FAANG and Silicon Valley as a whole (and Wall Street, and Hollywood, and SpaceX/Tesla, and the Ivy League), that they are in the United States. That doesn't mean I approve of everything they do. That doesn't mean I can't or won't decry their putting thumbs on scales toward a certain type of bien-pensant ideology. That does mean that, overall, I am very, very glad that they are American instead of Russian, Chinese, or even British, French, or German.
Shadonototro 5y ago
and 20 of the 100 largest ones, wich is not that bad we all know why USA has most of them, their hegemony plays a big role what's interesting is the GDP of EU was bigger than the US one in 2007, after 2008 it started to stagnate https://data.worldbank.org/indicator/NY.GDP.MKTP.CD?locations=EU-US https://data.worldbank.org/indicator/NY.GDP.MKTP.CD?location... that's interesting..

35 points by golfer 5y ago

acchow 5y ago

And I count 13 for the SF Bay Area. This concentration of wealth generation is astounding.

Ekaros 5y ago
I have long questioned what actually is "wealth"...
- kelnos 5y ago
  I think in this sense "wealth" is just "number of units of currency in your bank account". Perhaps you mean you question what "value" actually is? I would definitely agree with that.
- mustafa_pasi 5y ago
  You should read Paul Graham's best essay[1] then. It is not the only possible definition of wealth, but I think it is a very well worded definition, that really helps give a sense of what wealth really is. [1] http://www.paulgraham.com/wealth.html http://www.paulgraham.com/wealth.html
jollybean 5y ago
Profit concentration is not the same as wealth creation in the broader sense. Google demolished the newspapers classified ads. While probably more effective than otherwise ... it didn't all come out of nowhere.
- golfer 5y ago
  I'd say Craigslist did more to demolish newspaper classified ads than Google.

adamnemecek 5y ago

Idk if that’s something to celebrate.

jeffreyrogers 5y ago

Since this is done by market cap it leaves out a lot of private companies (which don't have a market cap by definition). Probably wouldn't change the status of Europe too much (although Glencore would be on the list if private companies were included).

ChuckNorris89 5y ago
Indeed, AFAIK, companies like IKEA and Bosch are privately owned.
- mxschumacher 5y ago
  Also: Ineos, vitol, Aldi, Auchan, Schwarz, Liebherr
- adventured 5y ago
  Europe doesn't have much in the way of private $200+ billion giants. It's pretty rare that those go unnoticed or untracked in terms of value. When they're around in the US or Europe, you know their names. Bloomberg and Forbes, among others, go to great lengths to track large private companies. Ikea would be valued at less than Target if it were public (it's far smaller than Target, with better margins). It takes a $200 billion market cap to crack the top 50, Ikea isn't close. Bosch would comparable to or a bit larger than 3M in valuation. They're not particularly a growing business, they've been stagnant for a long time, that would hit the multiple they'd receive, as would their segment (industrial) and that they're Europe based (European companies almost always receive a lower multiple than their US peers). They'd be worth more than Ikea, granted.

umeshunni 5y ago

EU is about 15% of global GDP (and rapidly declining), so perhaps this isn’t that out of line (~12% of top 50).

reader_mode 5y ago

Am I the only one horrified looking at those graphs explode in the last couple of years ?

jollybean 5y ago
It's the financialization of economies as a form of Monetary Policy 'Supply Side' support. Home prices and valuations are skyrocketing is a different kind of inflation, just not the one we're used to. Regular inflation is hitting hard due to COVID etc. so we're going to see the populist result of that soon.

Calvin02 5y ago

From scanning the list it seems like none of the 6 were started in the last 15+ years. That should be alarming to EU policy makers. As this divide grows, I worry that Europe may resort to protection mechanisms as a way to shield local companies and give them a chance to "grow". The future is more protectionism and less free trade. And that's not good for anyone.

missedthecue 5y ago
It's good for those that own the protected companies
- Sr_developer 5y ago
  Exactly,and to those "protected companies" you should add The Federal reserve The World-Bank The IMF and in general all the Bretton-Woods establishment designed and operated to ensure US economic supremacy. It is just not "those silly old-fashioned Europeans" playing the protectionism game.
deleted 5y ago
[deleted]
davedx 5y ago
Yes and no. Companies like BKNG and Adyen are doing very very well in the Netherlands: 94B and 58B respectively, both comparatively new companies. It’s just less easy to scale up here than it is in the US with a huge economy and one language. Prosus is also there on the first page
- deleted 5y ago
  [deleted]
- tpush 5y ago
  BKNG is American; The Dutch Booking.com was sold to what is now BKNG in 2005 for $133MM.
jollybean 5y ago

aidenn0 5y ago

More evidence that there is more competition in Europe?

missedthecue 5y ago
Or that Europe missed out on the technology revolution in a huge way. The biggest company in the world is Apple, a mobile phone producer. But I don't think anyone would say that the mobile phone industry lacks competition. I can name 10 brands off the top of my head.
- mustafa_pasi 5y ago
  I agree, but it is more the costumer facing tech that the EU does not do well. All of FAANG started out as B2C tech products/services. In these markets the EU is at a natural disadvantage compared to the US, China and maybe even Russia. It is much easier to grow if you have just one huge country that you can grow within before expanding internationally. But then one should also ask, why hasn't such a B2C tech company emerged in Germany or France or Italy, all of which have sizable populations. I guess the tech people in these countries where getting hired by traditional industries to work on boring industrial applications. And the finance people were in no mood to finance a web search engine or a social network in those days. We had lots of Amazons and lots of Facebooks but they never attempted to expand beyond the national borders of their respective countries. I guess some of them were relatively profitable, so maybe they thought they had a nice deal going on, until the American giants came knocking on the door.
- IkmoIkmo 5y ago
  Does it help to be another non-Chinese Oppo or Xiaomi? There's not a ton of profit to be made competing with Apple and Samsung in the West. There's opportunities elsewhere, but it's hard competing with low-cost Chinese smartphone companies in low/middle income markets, particularly in their Chinese homemarket. Instead there's tons of opportunities investing in the mobile space. From the iPhone 12 chip built with a Dutch ASML machine, to companies like MessageBird or Adyen to name a few more Dutch companies. I agree there's plenty of competition in the US, but there's no other single market that even came close to the US until China came along, but even that is just a large number of people making an average of 10k a year. The EU is a big market but so is 'Asia', at the end of the day, even with a lot of regulatory integration, they're still separate markets that each require their own approach, very much unlike the US. It's no surprise that lots of product launch rollouts in the EU of US companies are slow and skip lots of EU countries, compared to launches in the US/Asia. It's not because the EU has 'missed out on the tech revolution', it's because the EU isn't really a single market and it's really tricky to launch in 27 different countries. That's true for EU companies just the same as it is for non-EU companies. It's why there's hardly a European Amazon, but there's tons of local EU companies that I like just as much (e.g. Bol.com in the Netherlands). They just can't easily go beyond their borders, and eventually get bought by a US/Asia player with a massive domestic market which now has a warchest to dominate the small EU players, too.

tormeh 5y ago

Economist ran an article on this: https://www.economist.com/briefing/2021/06/05/once-a-corporate-heavyweight-europe-is-now-an-also-ran-can-it-recover-its-footing https://www.economist.com/briefing/2021/06/05/once-a-corpora... We're in the service economy now, and Europe has no real single market for services, due to all kinds of national regulations that differ throughout the block. Nor does it have well-developed financial and labor markets, partly also because they are currently partitioned by nationality. Its stock exchanges are too many and too small, etc. The list goes on. For many big European companies, an astounding percentage of revenue comes from the US or China. But if you start a startup building for US/China from the start, why would you want the HQ to be somewhere in Europe? Edit: This also means that the story is very very different for products that can be shipped in boxes. Europe does extremely well in cars, beverages, clothing, chemicals and that sort of thing. Also electrical utilities. No idea why, tbh.

tw04 5y ago
https://archive.is/HYpNg https://archive.is/HYpNg
minimaul 5y ago
Another decent barrier here is language. Europe has lots of different languages in use, and while a lot of people speak english it's far from universal. It makes it quite tricky to offer services across the whole of Europe without a lot of investment.
- tormeh 5y ago
  It is a barrier, but not a huge one, assuming you're talking about software. Translation is pretty cheap, all things considered. For consulting businesses and employees it's a different story, obviously. The real problem, particularly in the B2B space, is that if you build something for nation X, that solution might not work, be relevant or even legal in nation Y.
  - minimaul 5y ago
    Translation for software is cheap, but internationalisation can be tricky - different languages have vastly different rules. Europe's not too bad here though. There are other costs though - such as support. In the US you can grow pretty well with a large market providing support in one or maybe two languages. In Europe, you need to provide support in English, German, Dutch, French, Italian, Spanish... and there's more besides, and some tricky local dialects. edit: also the cost of maintaining translation as you grow or make changes means it's not a one-off cost, it's a constant extra burden - even if it's not a huge one. For a larger business it's plenty doable, for a small startup (especially a non-funded one) it's very difficult. edit 2: also I'm meaning mostly western/central/northern Europe. If you go further east things get trickier still.

varjag 5y ago

The USA had a few trillion freshly flushed into the economy, the EU (yet) had not.

jeffrallen 5y ago

I'm pretty sure that all of the employees of the small specialized privately owned companies in Switzerland and Germany really appreciate the lack of giant companies, which historically use their power to erode worker's rights.

dwhitney 5y ago
I work for a FAANG. Among the many benefits we receive, a large chunk of our pay comes in the form of equity. When the price of the stock goes up, so does my effective pay. Also there is free food and stuff.
- jeffrallen 5y ago
  One of the A in FAANG drives their assembly contractor so hard, they had a problem with worker suicides. The other A in FAANG busts unions and instead of providing safe working conditions, just parked ambulances outside to load up workers as they fell from heatstroke. So yeah, um, enjoy your free food, dude.
  - reader_mode 5y ago
    Yeah by that logic here's an example of Germany being the pinnacle of worker rights [1]. [1] https://www.euronews.com/2020/05/12/covid-19-outbreaks-in-german-slaughterhouses-expose-grim-working-conditions-in-meat-indust https://www.euronews.com/2020/05/12/covid-19-outbreaks-in-ge...
ChuckNorris89 5y ago
That's bullshit. In Austria (similar to Germany and Switzerland in many regards), plenty of small specialized privately owned companies are actively fighting to erode worker's rights (greed has no culture and knows no borders). A couple o years ago, local industry lobby groups got the government to legalize the 12h workday and one top company I interviewed for had a time punching device next to the coffee machine so that employees could punch out during a coffee break as the company considered coffee breaks as non-working time for the employees and did not count to your 8h/day working time, just like your lunch break.

amedvednikov 5y ago

High taxes and bureaucracy everywhere in Europe.

mxschumacher 5y ago
California and New York aren't exactly low tax and low bureaucracy either. Yet still massively influential
- amedvednikov 5y ago
  California's taxes are high, but still much lower than in most of Europe. For example in France, to pay 100 euros in salary, the employer needs to spend about 250 euros.

ortusdux 5y ago

We used to make steel! -David Mitchell

tibbydudeza 5y ago

Amazed @ Adobe - they maybe have 5 software products in their portfolio.

chrisseaton 5y ago
Creative Cloud alone is like 20 software products - many of them massive products, critical in their industries.
- tibbydudeza 5y ago
  How many graphic design studios/photographers can there be in the world to give them this kind of market cap ???.
  - chrisseaton 5y ago
    Millions. Graphic designers are in every non-trivial company. Professional photographers are part of every western community. Millions of amateurs edit and manage their photographs. Even relatively small media shops spend tens of thousands on Creative Cloud licenses. You already have the evidence - their market cap.
momothereal 5y ago
? Adobe has over 100 software products: https://www.adobe.com/products/catalog.html https://www.adobe.com/products/catalog.html

pm90 5y ago

The EU has a larger population and land mass than the US. The EU has similar universities, mature financial systems and a common cultural heritage (Western Civ) with the US. Why is the EU not an economic and military superpower?

chrisseaton 5y ago
> Why is the EU not an economic and military superpower? Best I can tell, mix of apathy, resentment towards people who work hard, and generally smaller ambition and perspective. We have the same problem in the UK so it's not just the EU.
mxschumacher 5y ago
The EU is not a nation, but a supranational entity that binds countries that have similar goals and values. It's an amazing achievement for a continent that has seen millennia of internal war. Economically, the EU is very powerful and influential. It exerts influence through trade agreements, standards and sanctions. Individual member states have capable nuclear arsenals and are actively engaged in missions around the world.
oezi 5y ago
But Europe is fulfilling a lot of promises. No war for over 70 years. Free access to Healthcare, education. Safety. Less people in prison, less homicides. Less people in poverty. We learned the hard way that having military superpowers can lead to a lot of misery. Since financial markets are open for anyone to invest in anything (pretty much), I also don't get why it matters where market cap is created. For instance: Tesla has more market cap than a lot of European ICE competitors. But what VW contributes to European GDP still is much bigger than Tesla's contribution.
- chrisseaton 5y ago
  > But Europe is fulfilling a lot of promises. No war for over 70 years. https://en.wikipedia.org/wiki/List_of_conflicts_in_Europe#21st_century https://en.wikipedia.org/wiki/List_of_conflicts_in_Europe#21...

noizejoy 5y ago

That bigger is always better seems to be a concept culturally possibly most valued in the US. But what if the “bigger is always better” mantra is actually wrong? (Many fallen empires come to mind.) Maybe it’s an overall healthier state of affairs to have less concentration of power? So maybe Europe is just fine?

tpush 5y ago
But the chief problem for (tech-)corporate Europe isn't that power is concentrated less than in the US. It's that Europe has less absolute or nearly no power in areas that matter a lot for their society.
- ChuckNorris89 5y ago
  >It's that Europe has less absolute or nearly no power in areas that matter a lot for their society. Bingo. For example I, a European worker, wake up in the morning by the alarm sound of my US developed phone who's software and services are also developed in the US. I then power up my US developed laptop and use a US designed OS and read and reply to emails using a US developed solution part of an office suite also made in the US. During work, I deploy my work, which helps people book flights, to a US developed cloud solution. After work I text my friends on a US developed messaging solution and at the pub one friend keeps posting pictures to a US developed social media platform and another swipes through photos of potential mates on a US developed dating platform. Hell, even when I want to use online banking or online government services I'm still relying on mostly US tech to get the job done. How the hell is this absolute dependence on US tech not scary for Europe's sovereignty is beyond me. If the US wanted to flex its power for shits and giggles it could just ask the Microsoft, Apple and Google to turn off their services in Europe for a couple of hours and send Europe to the stone age.
  - pwlb 5y ago
    That sounds like a view from last century. FAANG multinational, sovereign companys and they are interested in money and are not interested in losing their userbase. moreover a lot of these companys have offices in europe as well, so part of these solutions are developed in europe as well. having the HQ in one country is only one aspect of a company

hbbio 5y ago

France has 4 companies in the top 100. All of them in the luxury fashion/beauty products: LVMH, L'Oreal, Hermes and Dior. Three of them were created before WW1 (that's a one) and Dior in 1946. And all of them thrive because of the lifestyle image associated to the "France" brand since then.

break_the_bank 5y ago

This reminds me of what Peter Thiel wrote about Europe in Zero to One. Europe was in the indefinite pessimism block, the world is going to crap and they don’t think they can do nothing about it. Here’s the larger paragraph from Zero to One. > Indefinite Pessimism Every culture has a myth of decline from some golden age, and almost all peoples throughout history have been pessimists. Even today pessimism still dominates huge parts of the world. An indefinite pessimist looks out onto a bleak future, but he has no idea what to do about it. This describes Europe since the early 1970s, when the continent succumbed to undirected bureaucratic drift. Today the whole Eurozone is in slow-motion crisis, and nobody is in charge. The European Central Bank doesn’t stand for anything but improvisation: the U.S. Treasury prints “In God We Trust” on the dollar; the ECB might as well print “Kick the Can Down the Road” on the euro. Europeans just react to events as they happen and hope things don’t get worse. The indefinite pessimist can’t know whether the inevitable decline will be fast or slow, catastrophic or gradual. All he can do is wait for it to happen, so he might as well eat, drink, and be merry in the meantime: hence Europe’s famous vacation mania.

TMWNN 5y ago
>This reminds me of what Peter Thiel wrote about Europe in Zero to One. Europe was in the indefinite pessimism block, the world is going to crap and they don’t think they can do nothing about it. Thanks for the quote; the Thiel book sounds interesting. I've been thinking about how familiar the discussion here and in the recent Economist post sounds. Isaac Asimov wrote a short story, "The Evitable Conflict" (1950), in which a future world government is divided into four regions (<https://imgur.com/N2g6DKE https://imgur.com/N2g6DKE>). Without spoiling the story, the European bloc is described as being the smallest by population, slowest to grow, becoming a backwater compared to other regions, and content to remain that way.

ralph84 5y ago

400 years of brain drain will do that

idownvoted 5y ago

While I'm inclined to chime in on Europe's lack of competitiveness there are some factors being glossed over in favor of a catchy headline here: a) market cap just captures where the financial markets see/saw most hope for gains b) which is obviously the tech-sector (2 non-tech companies in the top-10, four out of the top-15 if we don't count Visa as one) c) the pandemic has likely catapulted a lot of pharmaceutical companies into the top-50 In other words: There's either room for disruption here (meaning European companies/other sectors are undervalued) or even a pandemic with never-seen global policy responses, did not manage to break the dominance of the tech-sector.

riccardomc 5y ago

We will probably look back at this time as the golden age of information technology. Monopolistic phenomena are emerging everywhere. Things are going to change[1]. There's no real way to demonstrate that a few larger players are better than many smaller ones. Maybe is good for economies of scale, but mainly for the big fishes and only marginally for end users. [1]https://www.washingtonpost.com/business/did-big-tech-get-too-big-us-crackdown-seeks-answer-quicktake/2021/06/11/449a3a8e-caf5-11eb-8708-64991f2acf28_story.html https://www.washingtonpost.com/business/did-big-tech-get-too...

tormeh 5y ago

Why does Boeing have a higher market cap than Airbus? That seems nuts to me...

filmgirlcw 5y ago
Defense contracts.

yread 5y ago

Oh no Europe doesn't have enough too big to fail corporation that could lobby for more corporation-friendly policies

ubanholzer 5y ago

It's not always a benefit to have the biggest companies in the country. EU has a lot of stable SMEs, which helps the middle class to stay strong, thus creates a stable and safe environment for the people. In the US, there are about 50% of the workforce in SME, in the EU there are more than 66%. It's better and healthier to diversify.

TMWNN 5y ago

Harry Truman said in 1945 about the atomic bomb, "We thank God that it has come to us, instead of to our enemies". I feel the same way about FAANG and Silicon Valley as a whole (and Wall Street, and Hollywood, and SpaceX/Tesla, and the Ivy League), that they are in the United States. That doesn't mean I approve of everything they do. That doesn't mean I can't or won't decry their putting thumbs on scales toward a certain type of bien-pensant ideology. That does mean that, overall, I am very, very glad that they are American instead of Russian, Chinese, or even British, French, or German.

Shadonototro 5y ago

and 20 of the 100 largest ones, wich is not that bad we all know why USA has most of them, their hegemony plays a big role what's interesting is the GDP of EU was bigger than the US one in 2007, after 2008 it started to stagnate https://data.worldbank.org/indicator/NY.GDP.MKTP.CD?locations=EU-US https://data.worldbank.org/indicator/NY.GDP.MKTP.CD?location... that's interesting..