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I believe the EU would be better off if it just deleted its technology funding apparatus and tried to rebuild something like DARPA, while focusing on procuremen
by throwaway12509 5y ago
I believe the EU would be better off if it just deleted its technology funding apparatus and tried to rebuild something like DARPA, while focusing on procurement like the poster suggested.
There is a huge amount of money available, but it's locked behind layers and layers of bureaucracy. It is a huge waste of time on both sides, for some anecdotal I'm procrastinating from an application as I type. I should be coding or doing something otherwise useful.
The situation has devolved to where startups treat public funding as though it were revenue and have dedicated teams to chase it.
The Economist had an article here a few days ago lamenting that Europe fails to produce IPOs, which is where the actual problem lies. If ExpectedValue[European Startup] = ExpectedValue[Startup] | No IPO, then it's no wonder European startups are valued at 10% of their US counterparts.
The EU needs to get out of the way and end its Lots of Little Winners policy, because without winners you just wind up with Lots of Little Losers in a globalised economy.
- danaris 5y agoBut why is a high stock value the ultimate goal? Shouldn't the goal be producing tech that's beneficial?
- throwaway12509 5y agoBecause high future valuations allow companies to raise capital and do useful work in society.
- layoutIfNeeded 5y ago[citation needed]
- viro 5y agoAMC
- sidlls 5y agoBeneficial to whom?
- danaris 5y agoIn general, to its users, hopefully without also being detrimental to society as a whole. But my point here is mainly "shouldn't the goal of a company be to produce a useful product or service rather than simply to make money for its shareholders?"
- jbverschoor 5y agoThat’s the purpose of a commercial company. To return money to shareholders.
- MaxBarraclough 5y agoThis kind of institution does exist: https://en.wikipedia.org/wiki/Benefit_corporation https://en.wikipedia.org/wiki/Benefit_corporation
- onion2k 5y agoThe Economist had an article here a few days ago lamenting that Europe fails to produce IPOs, which is where the actual problem lies. A lot of European startups don't get to the size where an IPO exit would be appropriate because a US company buys them before that can happen.
- Silhouette 5y agoYou don't have to sell out to a big US company, so it's worth pausing to ask how we've reached the situation you described.
- onion2k 5y agoOf course you don't, but someone offering to make you a multi-millionaire is hard to say no to. I imagine. I've never been in the situation unfortunately.
- throwaway12509 5y agoGenerally it's not you making the decision but some investor who needs to close out a 10y fund and can force the sale through some nasty term in the SHA. In a unicorn situation, the founder will generally take money off the table early and will be okay regardless. Just look at WeWork.
- Silhouette 5y agoIt certainly is, but in the US there have apparently been enough incentives for some founders not to accept an offer at that level. Some of those founders have gone on to build their businesses up to billion-dollar valuations, with dominance in their field, and now they've become the ones doing the investing and acquiring for the next generation of tech businesses. We have almost none of that in Europe, and I think it's important to ask why. I don't believe we lack people with ideas, skills and entrepreneurial instincts, and that means something else is getting in the way.
- jbverschoor 5y ago
- deleted 5y ago[deleted]
- estaseuropano 5y agoI don't see how its in anyone's interest to generate more rent-seeking giants. All these R&D statistics are bullshit as they work on tax data, which in turn clearly incentivises companies to classify every programmer or engineering salary as research. A healthy world needs more dynamic startups, not more anticompetitive giants that squeeze or buy everyone else. The US or Chinese advantage is not quality engineering or better companies, its just financial engineering and huge state or venture financing specifically intended yo generate winners. I'm happy that the EU still bets on the small guys.
- nr2x 5y agoWe’re not talking about artisan cheese here, we’re talking network effects. “Small guys” can’t offer the same value without a user base.
- deleted 5y ago[deleted]
- Bayart 5y agoThere no massive capital flow like in the US because nobody's putting their entire life savings and pensions on the markets.
- wutbrodo 5y agoInteresting, where do retirement savings go? I don't know much about the European context beyond the S = I identity from my intro macro courses back in the day.
- jbverschoor 5y agoReal estate, guns, oil. And we’ll they actually cannot pay what they promised, so they keep upping the pension age etc.
- Bayart 5y agoPersonal savings usually go into real estate and conservative savings instruments (savings account with minuscule interests payments, life insurance). Public pensions are just part of the regular money flow of the State. Taxes come in from the employed, budget goes out to the retired.
- edmundsauto 5y ago> The situation has devolved to where startups treat public funding as though it were revenue and have dedicated teams to chase it. This is how it works in America, too. Professional grant writers who know how to get funding are basically the rainmakers for research teams.
- jbverschoor 5y agoThere are companies and people specialized to get grants and funding from the eu. They will take 15-20% . Most of the time the money goes to incompetent companies, but with good connections. Normally you’d call this corruption, but of course that doesn’t happen here.