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Is Europe just not good at innovating?
- gijsnijholt1980 4y agoASML for one is doing a lot of innovating. And enabling others to innovate too. Edit: yes sorry, I noticed ASML after replying. Good piece btw
- deleted 4y ago[deleted]
- gijsnijholt1980 4y agoSorry, I didnt see it listed
- kcb 4y agoDidn't at least partially that innovation come from aquiring an American company? See https://www.cymer.com/ https://www.cymer.com/
- Sakos 4y agoThat basically applies to any large company. Intel has R&D in Israel, for example, and they're responsible for the Core 2 Duo which saved their asses. ASML was already an incredibly significant player in the industry before that acquisition.
- ahubert 4y agoASML is actually mentioned twice in the article.
- jbverschoor 4y agoIf ASML was a US company, it’s be worth 10x by now
- Sakos 4y agoYou mean it would've been outsourced and sold off in pieces to foreign companies. The US largely doesn't value manufacturing.
- crote 4y agoASML pretty much has a monopoly on their market. How could they possibly become worth 10x more?
- jbverschoor 4y agoThey can’t handle demand. They could increase pricing. Perhaps add a different business model. Maybe there’s something they can do with their related company ASMI. If they can get things to work in worse environments they could eat off of the realestate and facility budget. If it were a US company, it would’ve been well known many many years ago, causing more demand in the stock
- SiempreViernes 4y agoMan, outsourcing the hardware production is now a sign of decline? Globalism really is dying, you wouldn't have gotten away with just flatly saying something like that in 2007.
- Sakos 4y agoGlobalization and the associated outsourcing has always been a contested issue. A lot of people who tried to pretend it wasn't were either trying to make a buck or willfully ignorant (see Germany's intentional utter dependence on Russian gas).
- etangent 4y agoif you read the article, it also talks about outsourcing software production. In the broad sense, if one outsources both hardware and software production, what is one even left with? Does one produce anything besides putting one's name on fashion apparel?
- jacobr1 4y agoManaging a distribution system, such as a sales and marketing organization is itself a feat. Plenty of tech companies no longer really innovate and just buy startups ... yet they still provide value (to their investors at least) by cross-selling the products to their clients, at a scale the startup might not have been able to reach organically (within the time window of their product remaining sufficiently innovative before it in turn in disrupted).
- jmclnx 4y agoI think the main reason is startup costs. Due to what little I know about Europe, I suspect it is due to regulations that protect employment and the environment (which I think is real good). For Tech, employment is the big one, but a startup may want the ability to fire someone without having to spend time dealing with Gov. Regulations. In the US, a small startup can fire you without even notifying any Gov agency (or the notification extremely simple). In the US, once heavy environmental regulations started going in, many companies started moving Manufacturing off to Asia. Now that the US is now allowing more pollution, you see some Manf. is coming back.
- no_wizard 4y agoI can't vouch for how European Countries labor laws influence start up culture over there, and I'm sure its definitely a thing, but I quibble strongly with the idea that US manufacturing was moved to Asia because of environmental regulations. Its generally accepted that its due to a one two punch of lower labor costs and a lack of willingness to invest back into factories due to de-regulation in the 80s and 90s which favored financialization of corporations[0]. This lead to a self-perpetuating cycle where American manufacturers struggled and couldn't make the investments needed to stay competitive in most markets where there wasn't regulation (such as car tariffs). This in turn lead to situations where, for instance, if you needed specialized manufacturing Asia ended up farther ahead on both price and quality than the typical US manufacturer. In short, it was de-regulation that lead to structural favoring of financialized corporations which in turn lead to a downward investment in manufacturing in the US while investment in manufacturing sectors in Japan, China and other countries soared[1] [0]: https://digitalcommons.law.seattleu.edu/sulr/vol36/iss2/17/ https://digitalcommons.law.seattleu.edu/sulr/vol36/iss2/17/ [1]: https://hbr.org/2009/07/restoring-american-competitiveness https://hbr.org/2009/07/restoring-american-competitiveness
- jacobr1 4y ago> Now that the US is now allowing more pollution, you see some Manf. is coming back. The bigger factor is that in some manufacturing areas, labor no longer dominates the costs. If you are using "robots" and other automation, then the cost of labor might not significantly impact unit economics.
- dboreham 4y agoSo no ARM then? And no web?
- eternalban 4y agoTo say Europe is not "good at innovating" seems to fly in the face of history of technology. It is possible this article is a European's way to deal with the fact that social mobility is the elephant in the room. It is possible that the issue is European establishment's (social/economical/political) reluctance to having to deal with newly minted tech titans in their midst? Family members giving founders grief is also a telling sign: a mild form of enforcing a social taboo.
- mike_hearn 4y agoBoth of those were created decades ago, and by the British (albeit TBL worked in Switzerland at the time he created HTML). A lot of people in EU countries say Europe when what they mean is EU member states. The EU leadership itself does this all the time and the practice spreads. The author may believe that Britain is not European for the purposes of this essay. For instance he says there's no AI innovation, which ignores DeepMind (the question posed by the article is about innovation not ownership, so the fact that they sold to Google shouldn't matter). The UK does OK but many of the same cultural issues are present. Some are misidentified as European vs American culture when in reality they are more like tech vs non-tech culture, I think. He talks a lot about outsourcing and contractors. Companies created/run by non-programmers often have no intuition for the large range of experience that can be found inside the job class of software developers, nor what can or can't be done with technology, and therefore can't see why you shouldn't just outsource it all to the lowest bidder. I had to face that regularly at my last employer. It was founded by Americans but they came from finance. All the tech work was done in the UK. "Why can't we just ship this all to India/eastern Europe" was a common question from the US management even though the product required fairly complex technical design work. It was the Brits pushing back and arguing for well compensated and equity incentivized devs (who came from all over Europe). There were other cultural differences around hiring as well. It may seem like this problem is more prevalent in Europe but I think that's just because more companies here are older and therefore not run by developers. If you look at what we mean by tech firm or tech startup, and what defines this, it's hard to come up with a consistent marker beyond "a company founded by engineers or otherwise highly technical people". If you look at US tech firms, every single one is founded by a programmer. Moreover their board of directors may be made up of former developers too! It gives them an intuition for software and how to make it work that you just struggle to get otherwise. It's not impossible - one reason Goldman Sachs is so respected/feared in the finance world is that they managed to do a good job of their internal software platform early on. But it's a bit rarer. Still, the cultural issues are real. I remember my mother once asking me why I didn't found YouTube. This was many years ago. I replied, "because their business model is insane, you can't pay for that much bandwidth with banner ads". And it was kinda true, but back then I hadn't understood just how plausible selling to a competitor even if you lost money actually was. Also an issue - top question for startup founders from family will be, "when will you be earning your old salary". Creating a company can be seen as almost a self-indulgent wastrel thing to do vs just earning a salary.
- ijsnow 4y agohttps://www.numbeo.com/quality-of-life/rankings_by_country.jsp https://www.numbeo.com/quality-of-life/rankings_by_country.j...
- amelius 4y agoNo, they are just bad at attracting VCs.
- hnhg 4y agoMore like European VCs are very risk averse when compared with their US counterparts. Raising money in Europe seems mostly either about knowing "old money" or having connections state-side and skipping the local scene, sadly.
- jacobr1 4y agoHow much of this has to do with LPs? From my cursory knowledge of EU VCs, they seem to managing much of their own capital, rather rather than investing on behalf of a large, driverse group of institutions and high-net-worth people. With the US based VCs (which probably have global LPs), they are looking for not just good returns, but also investments which maximize the efficient frontier of their portfolio. They explicitly are looking for non-correlated positive returns. Without LPs with that kind of mindset, I got to imagine the VCs would be much more risk-adverse.
- jbverschoor 4y agoThere is no “European” market. It’s a dozen or more different smaller markets. There’s also almost no risk-capital, because there is mo single addressable large market.
- etangent 4y agoUnconvinced. Europe simultaneously exists and does not exist, depending on whether one uses the term pejoratively or not, which makes it impossible to subject anything in it to criticism. It's like a Schrodinger continent.
- jimnotgym 4y agoThere is no US market. It's 50 different smaller markets.
- Jensson 4y agoIf that was true I wouldn't see the same store chains in every city. There are some really minor differences, but mostly you see the same basically wherever you go in USA, in Europe most stores are different when you cross a border.
- mathverse 4y agoThere is no Europe. It's just not a thing. European countries just work with some common framework that is better than nothing. It's not even easy to employ people across Europe. You cant as a company in Denmark offer a normal employment contract to someone in Germany. You need a legal entity in both countries. There's also still european xenophobia and racism (ie not hiring someone because of their nationality). Moving around in Europe sucks as well. Why should you move to country X and learn their language just because of a company/job? It makes no sense. A growing company in Berlin does not benefit anyone in Warsaw. There's no synergies.
- bratwurst3000 4y agoEhm this is wrong. The only true thing you stated is that someone has to learn a new language if moving. But most international companies are speaking english anyway. Its super easy to move and change job in europe. Sign the contract and its done. The problem is each country has their own system but they are very similar. Not as easy as in the us but easy. And there is a shitload of synergy… can you prove your point? If I look at the countries export they are mostly exporting to europe. Airbus etc are another examples.
- mathverse 4y agoNo it is not. A legal entity in Germany cannot offer a contract to someone in Poland. As a german entity you need to create a legal entity in Poland and offer a polish contract. What synergy do you see? Because I see none.
- version_five 4y agoCanada and Japan are also not good at innovating. Probably other places too. So this may be more of a question of why are the US (and China) above average currently. One thing I'd speculate, US generally has more disparity than other places (that's the stereotype anyway, but it's what matters) So I bet there are way more horrible failures as well, and people in dire straights because of their decision to try and innovate. But what we see are the rare successes that come out the other end.
- barbariangrunge 4y agoCanada innovates quite a bit. American companies just keep buying the Canadian ones who do so before they get big. The whole Canadian tech sector is like an incubator for the USA in some ways. Although… the government invests almost nothing in starting new Canadian companies too, and instead focuses on luring American companies to open offices here, or else on giving money to existing medium and large Canadian businesses to convince them to increase hiring. This is a pet peeve of mine. It’s very short sighted
- jacobr1 4y agoMost American states are like this too. Outside the big tech-hubs, everything is about tax-lures in exchange for hiring commitments.
- version_five 4y agoI've personally found that the Canadian economy is basically just arranged around vacuuming up government money while producing as little as possible.
- pvaldes 4y agoThis is probably the main point. Europe is very good at innovation and really bad retaining the talent that produces. The companies based in this research end being created in US, for several different reasons.
- GuB-42 4y agoFor the US, I think it is cultural. Americans are taught from a young age that it is do or die. And they do a lot, they die a lot too. It is evident with the relationship to money, in Europe, we are told to save money, never spend what you don't have, etc... In they US, you should invest until you have nothing left, and then live on a credit, not using money you have is seen as a waste. I sincerely think that it is part of the reason why the US is so successful as a country. It has a population that is both hard working and efficient in a way that is unseen in other countries, mostly because it has no choice. For China, I think the reason is much simpler: it is huge. It has twice the population of Europe, and four times that of the US. And they are just transitioning to becoming a developed country. India is a bit lagging as a country, but I expect it become a major force in the near future for the same reasons.
- SeanLuke 4y agoA fair while back a startup in Rome that I am very familiar with had lots of fun setting up there. They were a highly scrupulous group, and besides they were going after government contracts, so they paid all of their taxes and regulatory fees, which in Italy is both a financial and incredibly complicated bureaucratic mess that, to be honest, many people and startups simply, um, avoid. They also had to deal with all sorts of absurdities. For example, they needed high speed landline internet: at the time the only option in their area (Trastevere) was Telecom Italia (TI, now TIM), the government-associated telephone monopoly. To get internet service, you had to start paying TI as if you had service, and then when they got around to it they'd come by and hook you up. So they did this. Three months later they were still paying and still hadn't gotten service. They complained to TI and were told that someone had come out but couldn't find their office because "Trastevere has twisty streets and is complicated". TI said this. They were then put in the back of the queue and had to wait for another three months, until the same thing happened again. As I understand it, it took them almost nine months to get internet service. All along they ran the entire company on cell phone internet plans.
- Kukumber 4y agoSince past 2 decades, most open source projects originates from the EU https://dl.acm.org/doi/pdf/10.1145/3524842.3528471 https://dl.acm.org/doi/pdf/10.1145/3524842.3528471
- deleted 4y ago[deleted]
- barbariangrunge 4y agoI looked up once how one starts a business in a few European countries and what taxes are. The processes I found were really expensive, and many companies weren’t allowed to exist except by meeting some pretty weird criteria. Then, taxes were insanely high. There were some business types that I could not figure out how to even met the criteria — you needed to be approved by some council who thought your venture was worthwhile and necessary I remember thinking, “no wonder there are no startups.” But maybe my research was low quality? It really may have been.
- DoingIsLearning 4y ago> But maybe my research was low quality? It really may have been. Creating a company is the smallest of barriers in many countries in the EU27 this can be done in a couple of hours and a few forms and a few hundred euros. In some countries you can even do it online. Now the ability to secure investors funding now that is a much bigger challenge, which is why you end up with European startup incorporating in Delaware, or New York to increase their success rate with US VCs.
- lordnacho 4y agoCan confirm having done this in a few countries. Registering isn't the problem, getting the business to fit into the economy is.
- seanw444 4y agoRegulation makes it very hard for startups. And Europe has a lot of those.
- hunglee2 4y agoExcellent essay, particularly like the dive into cultural differences, citizens relationship with state, employees relationship with employers, which alongside the more stringent regulations and weaker investment appetite are significant factors to explain the original claim. Two observations, to add to the discussion: Firstly, Europe does indeed innovate, but perhaps cannot scale as fast Chinese companies can with their massive internal market, or as fast as US companies can with their global reach. What seems to happen is European tech firms relocate to the US, or get bought out by US companies (Skype etc). Of course, European founders often relocate to the US at very early stage, so those companies in effect 'become' US companies even though founded by European founders. Secondly, Europe has been highly Americanised over the past two decades; the Internet is a powerful cultural propagator - and it is a US internet. US ideas, concepts, values being readily adopted by European tech culture, and propagated throughout European society. The net effect of this, is that the cultural barriers to US tech adoption are close to zero at the consumer level - every website looks the same, every app follows the same UX etc. Contrast this with tech from East Asia, or India - there is a jarring difference. Hence, European tech companies are in direct competition with more mature, better financed, faster moving US tech equivalents and inevitably get swept aside, unless they can add unique value alongside their innovative service.
- YorkshireSeason 4y ago> Europe has been highly Americanised This is very true and also very interesting. One underappreciated effect of this is the speed of diffusion of ideas originating in the US. Generalising and simplifying a great deal, it takes a couple of years, maybe 2-3 for an idea to become normalised in English speaking European countries, and then another few years before the idea becomes normalised in the non-English speaking countries. This has the effect that Europeans are always late to the party and that hampers competitiveness, b/c the US and China have already moved on. A really amusing instance is EU research funding. Cloud computing became a EU-fundable research theme when Amazon had commercialised AWS already.
- hunglee2 4y agoyes, indeed, the cultural exchange is broadly mono-directional. I think both Americans and Europeans are generally unaware of this phenomenon, but basically US is making the future values, habits and behaviours Europeans hold, so US companies will not only inevitably be ahead, but also have a decisive lead if / when a European competitor emerges. US internet is producing cultural convergence in Europe, with the 'centre' being Silicon Valley / New York, and the periphery being everywhere else
- throwaway4good 4y agoQua the USD global position as reserve currency, the US has access to much cheaper capital than the rest of the world. That is why entrepreneurs flock to the US. It is not "innovation" that is the difference; but the ability to scale up via cheap and risk-willing capital.
- seydor 4y agoThe Euro is a reserve currency as well
- disgruntledphd2 4y agoNot really. There's simply not enough Euro debt to make this work. You'd need a major increase of EU funding to even start creating a market like treasuries.
- seydor 4y agoYou mean, to be the dominant reserve currency. Currently Euro is #2
- CM30 4y agoPersonally, I'd say this point is the biggest factor to why Silicon Valley style innovation is rare here: > For better or worse, here in Europe we are fond of business plans that somehow make sense. Blue sky “let’s launch this and I’m sure we’ll eventually find sufficient rent seeking or surveillance possibilities to one day make money” things don’t fly too well here. As someone who once looked for investment in London, going to VCs and asking for money for consumer facing, million to one businesses aimed at 'revolutionising' the world will get the same reaction as having 3 heads. They do not have an interest in going for crazy moonshots at all, and are very unwilling to just give millions of dollars in funding to a startup in the hopes it could become the next Google or Facebook. What they are willing to back on the other hand are 'boring' SaaS businesses usually aimed at the B2B market. Some sort of business inventory system or tax management one is more their speed/style, and something they'll probably back with tens of thousands of pounds instead. So anyone who wants to make a world changing business or product will probably go to the US, or lose out to US based companies that can afford to pay millions in software engineer salaries and perks and marketing. Of course, that's not to say the other factors aren't issues. People are very skeptical of those that go solo and try to setup their own business in Europe, especially if it doesn't involve some 'well known' field like a trade or retail establishment. And I guess there's probably a bit more ruthlessness in the states too, likely in part due to 'traditional' jobs not offering as much of a future as crazy moonshots. But it's the funding that's generally to blame. VCs are way more conservative in Europe, and seem terrified of backing ambitious consumer focused businesses and products in the same way they are in the states.
- mach1ne 4y agoI think the difference in innovation financing between Europe and the US fits quite well the image of European Old Towns versus the Empire State Building. Europeans are just very conservative when it comes to financial decisions. If something does not fit the mold which you know is accepted by peers, it is not given serious thought.
- pablok2 4y agoTo your point about the "mold" which society creates/accepts, this social aspect alone is likely the biggest factor. People aren't and can't break out of these social "holds" and what's ironic is that there's almost a financial/social/system level safety net built into most countries. It's socially irresponsible there?
- 4ndrewl 4y agoStrange. One HN thread US users whining about not being able to transfer their own currency to others without either multi-hour delays or costs. Whereas in the EU we're able to transfer funds near-instantaneously using our bank's smartphone apps. And yet in this article "innovation" seems to mean "creating companies that don't make a profit"
- seydor 4y agoI think it's more about the mindset behind your comment
- raverbashing 4y agoFor real Seems that innovations that don't involve shaking down the consumer 3 times before lunch are not really innovations in the US
- hocuspocus 4y agoI think the best illustration of this is Instacart: they basically re-invented what many supermarkets in Europe and Asia had been doing for 10+ years already, only with huge markups and gig workers exploitation.
- rootusrootus 4y agoFWIW, many grocery stores in the US had delivery many years before Instacart came around. Europeans have this really weird, ignorant understanding of America.
- hocuspocus 4y agoYet Instacart managed to raise $2.9B, that makes it even worse.
- itake 4y agoMost banks in the US use a free service called Zelle. Transfers take minutes [0], not hours. Apps like CashApp or Venmo take seconds (for on-platform transfers). [1] - https://www.zellepay.com/faq/how-long-does-it-take-receive-money-zelle https://www.zellepay.com/faq/how-long-does-it-take-receive-m...
- seydor 4y agoI always enjoy bert_hubert's writings, they are unique. It seems in europe we know what the problems are, but not how to solve them. The best way to make money in europe in the past decade+ is (was) to invest in US Tech Equity Subsidies and grants are job creation programs, let's not kid ourselves. The financing problem is a vicious circle: Europe is making it hard to become rich and treats you like a criminal for daring to make money (But it's fine if you have inherited it). Without rich people who have knowledge of industries, money is not reinvested into tech. > we have a surplus of idle technologists that would love to program and make things if only someone asked them to do innovative things And pay well. We have a lot of people remote working because they re not fools
- Ekaros 4y agoI think we can take an other look at this "innovation" in couple years. Just how well many of these "innovative" companies end up doing.
- eternalban 4y agoThat Paul Graham tweet reminded me of "System Error". - https://systemerrorbook.com/ https://systemerrorbook.com/ - Rob Reich, Mehran Sahami & Jeremy Weinstein SYSTEM ERROR with Julián Castro https://www.youtube.com/watch?v=3SNRfh2qMKE https://www.youtube.com/watch?v=3SNRfh2qMKE
- mach1ne 4y ago>In addition, European investors and entrepreneurs don’t tend to see their ventures as ’lottery tickets’ that might pay off. We like to see things costed with at least a theoretical path to profits Strange if true. Venture capitalists don't buy lottery tickets anywhere. They build a portfolio of them where the expected value is positive. From an investment standpoint, there is no difference.
- RcouF1uZ4gsC 4y agoSelection effect: All the people interested in high-risk, high-reward outcomes emigrate to the United States. This has been ongoing for the past 100 years at least.
- didibus 4y ago> This article has highlighted the stark differences between the US and Europe, and why innovating in the US is a way for an individual to reduce their risks and improve their outlook. Meanwhile in Europe, a non-innovative job offers the best expectation value. Plus there are our old fashioned expectations of well costed innovation plans where we know up front how we’re going to make money Maybe innovation isn't all that great afterall? Societally, you'd expect innovation to deliver better quality of life to all it's people. In that sense, I'm not sure it's fair to say that Facebook is the kind of innovation society needed. If the EU can in fact provide better quality of life with less effort and less need for risk taking, to the people of Europe, I'm not sure why you'd want to change the system? That's a big "if" though. But I think that dimension needs to be addressed as well. I don't know that Facebook or Uber really brought major innovation from an impact point of view. Lots of "innovation" in the US is more about market entry or taking over a market. It's not always delivering true life improvements, but innovating on ways for shareholders to capture more money. Meanwhile, BioNTech, which delivered the COVID vaccine, is a European company. I'm not saying EU is better than US, but I think we need to go a bit deeper in this analysis, define what we mean by "innovation", what inherent benefits does it have, are there different kinds of innovation, and are all kinds desirable?
- MSFT_Edging 4y agoWhat does "innovating" mean? We're watching a lot of the last decades empty startups fall apart at the seam. So many people have called these apps and services "innovation", yet they fail to solve a problem or make lives all that much easier. "innovation" seems to have become a partial synonym for "fast and loose and not that effective".
- underbrush 4y agoI don't mind the discussion, it is just more or less impossible to have when the premise is faulty. I can tell you exactly why Europeans think the US is better at innovation. It is because when Americans aren't satisfied with something they blame the US but still thinks the US is best country in the world. However when European aren't satisfied with something the blame Europe (or their country) and conclude that the US must be better. This has everything to do with US cultural influence.
- AlbertCory 4y ago(disclosure: American. I've dealt with a lot of European companies over the years. They're just as sharp as Americans if not more so.) This is an excellent article by a European, especially its honesty when concentrating on Europe, which they're familiar with. The parts about how you can't get a mortgage if you're a startup founder, worrying about your pension (!), horrible consequences from bankruptcy, and tax prosecutions from the government are things that many Americans wouldn't think of. Going to a startup here is not seen as a life-risking decision. It goes off the rails when it falls for the touristy "but we have free health care and college!" trope: > It may be good to realize how much of a dystopia the US has become already. Most well-educated Americans leave college under Absolutely Crushing Debt. And this is no ordinary debt – it survives bankruptcy! "Most well-educated Americans"?? What, did you read that "somewhere on the Web"? Stick to what you know.
- brnt 4y ago> "Most well-educated Americans"?? What, did you read that "somewhere on the Web"? Stick to what you know. Well, what do you know? You're not giving any arguments or data. What I know is that there's about 45M Americans who're out a cool 1.7T USD, and that both POTUS and Congress passed a bill called the "American Rescue Plan" to adress this situation. Yeah, it seems to affect most well-educated US adults. Stick to what you know.
- AlbertCory 4y agoLet's look at the data: according to [1], 27.5z of Americans 25 or older have a bachelor's degree. The population, according to Google, is 329.5 million. That gives us 90.6 million with a bachelors. According to [2], we get 38.1 million older than 25 who have some student debt. That works out to 38.1 million, giving us 42%. (I excluded the 24 or younger cohort, only because the Census Bureau did as well). Calculations are shown below. So the statement "Most well-educated Americans" is factually wrong. Isn't it? Whatever you think "most" means, it has to mean "greater than half." [1] https://www.census.gov/newsroom/press-releases/2021/bachelors-degree-attainment.html https://www.census.gov/newsroom/press-releases/2021/bachelor... [2] https://www.forbes.com/advisor/student-loans/average-student-loan-statistics/ https://www.forbes.com/advisor/student-loans/average-student... The math: US population 329500000 Percent with bachelor's 0.275 Population with bachelor's 90612500 Age group In millions total 25 to 34 14.9 14900000 35 to 49 14.4 14400000 50 to 61 6.4 6400000 62 and older 2.4 2400000 Total 38100000 Percent with debt 0.420471789
- LeanderK 4y agoI wonder whether those views here are always a bit too software-biased. At least for germany, we do not have a competitive advantage in software (which I have to accept) but in other things. I can't fail to notice that quite a few important innovations for renewable energy have happened here (talking about both europe and germany now). The leaders for renewable energy production are (mostly) NOT sitting in silicon valley and as much as I love software it's not everything. From solar panels to wind turbines, those things do not come from a silicon valley startup. I wonder how those "Innovation analysis" posts would look like if they would focus on everything but software.
- monknomo 4y agoThere is all the passivhaus and mass timber housing stuff that is more or less unknown in the US as well
- Apocryphon 4y agoThis sort of myopia also extends to critiques of other countries. Japan is notoriously relatively backwards when it comes to software, yet has a universal reputation for being an innovative society.
- baby 4y agoAs a French person who lives in SF and has gone through FAANGs and startups, I saw a few things that might be of interest: - In France, people often complain about the cost to hire, and how hard it is to get rid of an employee once you hire one. While most employees like these labor laws that are supposed to protect them, I would guess a number of employers are annoyed by it and end up hiring mostly contractors. - A lot of good engineers end up in large employers that are working on a lot of government money. Think airbus, tales, safran, etc. These places are quite depressing, far from any big city, and tend to innovate in non-directly-user-oriented products. - The hustling, and overworking culture that's extremely prevalent in the bay (people don't stay up late, work hard most of the week, mostly talk about work) is not really a thing in France. I once heard "people in France work to live, and people in the US live to work" and I totally agree with it. Hell, my childhood friends back in France get an insane number of holidays compared to people here in the US. (Some of them are forced to take 3 consecutive weeks every year, on top of their other PTOs.) - A lot of large companies/employers are also old families that got rich and have completely horrible/racist management and treat developers like low labor. Think telecoms, banks, etc. - A number of good engineers leave because the US pays more. I wouldn't think that it's a huge number though, as I noticed that very few people are willing to leave the country to study/work in general.
- mijamo 4y agoAs a French person living in Sweden this does not match my experience about overworking. Working hours can be unreasonable in France and people in startups hace a much better life/work balance in Sweden. I know plenty of engineers working 8-19 or so in France, whereas in Sweden it basically does not seem to exist at all. You do your 40 hours and not more. In France officially it is 35 but outside the big companies you actually end up more around 50-55. One thing I noticed in France on the other hand is the importance of the diploma. In Sweden it has very little value, whereas in France it sometimes shapes your whole career. And the good students coming from a good school directly get high paying jobs in big comfortable companies so that does limit the incentive to risk it all in a startup instead. Regarding the cost to hire I think it's a false issue. It actually costs more to hire in the US because salaries are higher. Job safety and how hard it is to fire people largely depends of your company culture as well, in my experience for startups it is a very secondary problem. Usually if an employee is a clear misfit they also feel bad and are happy to take an exit package and get a job somewhere else that fits better. It is however a concern for larger companies when you have an employee of 20 years that would never find another job at the same salary level, is without motivation, and is nearly not possible to fire (you have plenty of those in the big french companies, having worked their whole carreer there and just waiting for retirement while doing the minimum not to get fired with cause). But that should not really impact innovation as you wouldn't find those employees in a startup.
- LargoLasskhyfv 4y agoUhm. EMM-PEE-THREE! Edit: Also known as mp3.
- decodebytes 4y agoI figure this is not including the UK, considering silicon valleys software runs on the thing invented by the Brits (www).
- galaxyLogic 4y agoHey do you think kings and queens and other established interests are innovative? But more seriously, while US is great at technical innovation, Europe is great at innovating a better society, better healthcare longer vacations faster trains more support for humanities.
- rapsey 4y agoAs a European this article is sadly just a lot of noise. It simply all comes down to investment capital. 1. The EU does not have a stock market that rivals the NYSE/NASDAQ. There are few exit strategies available to EU companies. This there is no perpetual money machine where the old generation funds the new. There is simply VERY little investment capital available. Companies tend to be self funded and thus growth is much slower. This is by far the most important factor everything else are just minor details. 2. The EU is a conglomerate of markets, cultures and languages. The cultural difference between Italy and Germany is larger than between any US state. The cost and effort to expand past your own borders is very high and a very small amount of companies are able to overcome. A company that can immediately sell to 350M users is going to be much more successful than one whose home market is 5M.
- ThalesX 4y agoRunning a startup in Europe, we needed to find some hospitals as customers. We went to Berlin, the capital of EU startups and it was a PITA to get to talk to decision makers in large hospitals. The arrogance, disinterest for tech and speed of answer left much to be desired. Then we got some contacts in the US and every major hospital decision maker was a phone call away with a very fast answer if they find use in us or not. Not soon after we incorporated in Delaware. While you might have two valid points, saying that this is all it comes down to is a gross oversimplification.
- rapsey 4y agoIn the US hospitals are companies not public sector. A very different market.
- vetinari 4y agoIt is just an example, I have similar stories in other industries. European customers are very conservative, they won't even talk to you if you don't have several references in the same industry. Which is hard, when you are starting up. US customers, on the other hand, are not afraid to try new things and see for themselves, if they help them or not. That's the reason, why there are products and services, that come from US, are used by Europeans, but only after they were success in US. The willingness to be an early adopter is simply not there.
- Giorgi 4y agoEveryone is ignoring elephant in the room, because it is not PC enough for woke culture. It's capitalism. In US you can get reach by innovating, in EU you just pay more taxes due to socialism-capitalism hybrid alike system. Hence both talent, entrepreneurship and innovation flourishes in the place where it can be rewarded. Truth is painful.
- trap_goes_hot 4y agoThe US does have those unicorns, and while its great for the people that got rich off of it, I don't think its been a net societal benefit. People are conditioned to expect all software to be free. This kills the ability of long term stability for a company - and forces them to spy on the users or the usual vendor lock in. How many SMBs in the US are making decent money selling software?
- zwieback 4y agoThese are old structural problems. My dad spent his career at the intersection between semiconductor science and industry in Germany and I spent my childhood listening to the exact same complaints the author has. I've decided to spend my life in the US and I think the cultural differences are spot-on. However, as I'm reaching the end of my career and things haven't really changed on either side of the Atlantic I wonder: does it matter? Why not have two large economic superpowers with different approaches, excelling in different areas?
- YorkshireSeason 4y ago> Why not have two large economic superpowers We are getting there: China and the US.
- amadeuspagel 4y agoThis article (and previous ones by the same author on the same issue, and the discussions that always follow these articles on HN) make me even more pessimistic about the future of innovation in europe. Europe is less innovative because it's too pleasant and europeans are too moral. If only such explanations are allowed, is there any chance for improvements? Is it possible in europe to admit that even one thing works better in some other country?
- oxff 4y agoWe get taxed at 60%+ rates, have no energy and got trench warfare like it is the 1918. There's not much room for "innovation" in this hole.
- iso1631 4y agoIn reality in Germany the top level tax rate is 45%, which applies on income earning more than about $250k.
- pvaldes 4y agoPlus a 21% of VAT each time you spent an euro
- albert180 4y agoGermany doesn't have and never had a 21% VAT. Please just google before spreading bullshit
- pvaldes 4y agoBut most Europe has. Replace the value by the local VAT paid in your country and you will be able to pick the idea. In Europe you pay the normal taxes and then you pay "the other" taxes. Saying that you "only pay X% of your income in taxes" is not the whole picture
- iso1631 4y ago10% sales tax in many states, upto 13.5% in some areas. Vast majority of income is not spent on luxury goods attracting those high rates -- rent/mortgage payments, electricity/fuel, transport, etc
- pvaldes 4y agoDon't focus in the percentage, is not the important concept here. Is a luxury to replace the oil in your car? We pay a 21% more. You can see it from a point of view of privilege and pay less, let say 4%, so you don't care to think about it, but this does not change the problem. The problem is that you are paying 4% more, without receiving anything for it.
- rcarr 4y agoHaven't read the article yet but personally I think the number one reason is culture. Europe is so conservative it is unreal - it still has kings, queens, and aristocracy ffs. You've got centuries of antiquated customs, old boy networks, and oppression to overcome. America was literally built on the backs of people who had had enough of that restricting nonsense and broke off for a better life. Tech scares the European elite shitless because they don't understand it, it's the complete opposite of what they stand for and it threatens to destroy the tools they use to maintain power. It distributes knowledge among the people rather than concentrating it with the few, it is egalitarian rather than classist, and it favours competence over traditional customs. Europe is not good at innovating because the elites don't want to innovate. They want things to remain as they are. The selfishness is astounding and they can only get away with it because the US military gives them protection. Take away US aid to Ukraine and a substantial portion of Europe would most likely be under Russia control right now and the rest would be engaged in a war for the continent. Europe need to wake up, stop being lazy as fuck, rediscover self sufficiency in energy and security and toss out all the old bullshit that is not fit for the 21st century and holding them back. Otherwise it will end up like the UK currently is, sliding into oblivion because of delusions about its capabilities, its traditions and its standing in the world. One counter point to my tirade above: the US only gets away with what it does because the dollar is the world's reserve currency. They can subsequently fund moonshot start ups in a way that is not possible elsewhere in the world.
- taylodl 4y agoEurope invented the printing press, the steam engine, the railroad, electric light, radio, the internal combustion engine, the airplane - plus a whole lot more! Is that not being good at innovating? BTW, I'm born, raised, and live in the U.S. It just strikes me as odd that someone would claim Europe isn't good at innovating seeing as how they created most of the elements comprising our modern world.
- ThalesX 4y agoAre we comparing the now or arbitrary periods in the past?
- deterministic 4y agoEuropean companies like ARM and ASML dominate the chip industry. There are literally thousands of world leading companies in Europe that you have never heard of. Because they sell their products to companies you have heard of.
- hypertele-Xii 4y agoThe Wright Brothers were American. Who are you attributing the invention of airplanes to?
- taylodl 4y agoThere were several powered flights prior to the Wright Brothers. The Europeans had already figured out lift and control surfaces. They had even figured out thrust, but they were using small steam engines so they could maximize the power to weight ratio, but it wasn't enough power for human flight. It was the Wright Brothers who used the internal combustion engine, another European invention, to solve the thrust problem. There's legitimate contention as to whether they were even the first to do that, but they're officially recognized as the first airplane for human flight. My point being the Wright Flyer didn't just pop out of thin air (ha!). The Wright Brothers stood on the shoulders of giants, European giants.
- grubbs 4y agoJust visited France and it seemed all these people do is eat baguettes, sleep in, and work <20 hours a week.
- amluto 4y ago> In theory you might have insurance, but while unconscious you might still ‘pick’ an out-of-network hospital or anesthesiologist and end up with huge bills. If you know the right people and can afford it, you could then negotiate this down. Maybe. I know several smart Americans that had to live from their car while they sorted out financial issues. This particular issue is, supposedly, fixed. See: https://www.cms.gov/nosurprises/Ending-Surprise-Medical-Bills https://www.cms.gov/nosurprises/Ending-Surprise-Medical-Bill... According to a sign at a hospital I read recently, this protection cannot be waived in the ER. The ER is simply not allowed to issue a “surprise” bill. (Which still permits outrageous bills, but insurance pays them per the usual rules.)
- splix 4y agoTo my understanding they just give a paper now that you have to sign. It's an agreement that "they don't know the price yet because it's ER, and so they will tell you later"
- amluto 4y agoAccording to the sign, it is simply not possible to sign away one’s right not to be surprise-billed. Also, I’ve seen ERs that have patients sign little digital signature pads without ever showing the patients the legalese in question. I don’t see how that could possibly hold up in court.
- splix 4y agoHm, ok. I had an experience when signed something like I said, and then a couple of weeks later they charged 7x of what I expected as a fair price. Don't know how that was possible then. It was higher that the price on the website, which they supposed to provide. But they didn't care as they explained the website is simply outdated.
- amluto 4y agoThey seem to still be able to make up whatever price they like, but if you have insurance you don’t need to pay more than the in-network rate.
- rambambram 4y agoEurope invented the USA not so long ago.
- timwaagh 4y agoWell it also doesn't help that European startup founders are in my experience almost exclusively arrogant self righteous pricks whose only bit of knowledge is ayn rand novels and expect serious results yesterday on a legacy codebase. I find it impossible to work for them so I will not make this mistake again, no matter that I would like to do something innovative. So much better working in corporate environments or for the government than for small business.
- risyachka 4y agoInnovating requires a LOT of risk. Europe is very risk averse.
- lucideer 4y ago(fully aware of the irony / potential futility of posting a comment like this on a ycombinator website but... here goes) This article conflates innovation with entrepreneurship. The two are not even correlated in reality, certainly there's no causal relationship unless we're discussing market innovation (usually in the form of net-negative-outcome disruption). The points made in the article seem largely sound if you substitute the word "innovation" throughout, but the misapplication of that term does detract significantly. A sibling commenter uses the term "Silicon Valley style innovation", which I guess is reasonably apt. Personally I'm pretty thankful we Europeans seem to have a (slightly) smaller % of high-profile "innovators" like Bankman-Fried, Neumann, Holmes, Kalanick, et al.
- santoshalper 4y agoI think this is a sharp observation.
- mnd999 4y agoSweden does not seem to have this problem. Spotify, Klarna, Neo4j, SoundCloud, Pirate Bay just to name a few.
- za3faran 4y agoDon't the high tax rates in Europe also play a role?
- kwhitefoot 4y agoI discussed income tax with a US colleague a few years ago and when we had included medical insurance costs and risks, copay, etc., the US total tax burden really wasn't so very much lower.
- pvaldes 4y agoA real job offer for working in an European Project in the Systems area of CESGA EGI-ACE (Supercomputation Center of Galicia, Advanced computation platform for open science based in data), October 2022. North Spain. Requisite for the job: Speaking Galician language, or a signed compromise to learn it Enough said. EU often seems clueless about were to look or how to attract talent. The job offers sometimes seem redacted by clowns. Example: "We want somebody to work in our L.A headquarters, Requisite, Not living in L.A. for the last three years" (example based in a real case, I had seen also the opposite). If they have a hiring problem this damage is a totally self-inflicted one.
- YorkshireSeason 4y agoExactly. > Advanced computation platform for open science based in data I'd be interested to learn how the salary compares with a FAANG job in SV.
- pvaldes 4y agoI was unable to find the salary anywhere (It seems that nobody though that it could be an interesting data for the candidates, so I assume that is subpar). Most documents written in Galician only, Spanish seems totally absent and only a few pages were translated to English. Having all of this in mind, this phrase was not a big surprise: "En 06/06/2022 quedou deserta esta praza por falta de candidatos que cumpran os requisitos, polo que resulta necesario facer de novo esta convocatoria para cubrir o posto" If you speak Galician can read: "Due to lack of candidates to comply the requirements in 06/06/2022 it is necessary to make this call again [October] to cover the position." (It means also that the EU money granted for hiring somebody in this period of time has vanished and can't be recovered so the job offer is now for 8 months, instead a full year).
- crote 4y agoThe latter might be a tax thing. For example, in The Netherlands we have the "vrije vergoeding van extraterritoriale kosten". Long story short, if a Dutch company recruits an expert worker from outside The Netherlands, they are allowed to pay 30% of the salary tax-free for 5 years. Considering the salary tax at that level is nearly 50%, it's a significant difference. I would not be surprised if other countries have similar methods to recruit foreign high-quality workers. As for the former: it might be the case that the position is funded by an institution requiring a certain percentage of people employed by the project to speak the language. Stuff like that is not at all uncommon for subsidies. Alternatively, it might simply be the working language for the company. If you're going to develop a platform which will be used solely by people in Galicia, with an interface in Galician, it is not too weird to expect the people creating them to understand the language as well. But yeah, Europe is a diverse continent. You can't really work with a one-size-fits-all model.
- lizardactivist 4y agoOf course we are. Just not good at marketing, nor willing to take big leaps of faith.
- quadcore 4y agoThere is no Europe but a myriad of small countries when it comes to innovation. If we could incorporate true english-speaking european companies with european legislation, SV would shit its pants :) It's just a matter of critical mass. 12 european Larry and Sergei in a room get laught at. We need a hundred european Larry and Sergei to be to good of a demography to be ignored.
- gorbypark 4y agoThis is a great idea. Europe wide incorporation with reporting to a single EU agency, all in English. They’d have to figure out how to split the taxes up between countries, but besides that it would be amazing for startups in Europe.
- patrec 4y agoI find it very strange that the word "non-compete" does not occur in the article. Having California style non-compete legislation sounds like it would be one of the easiest steps to improve European competitiveness.
- arctangos 4y agoThis is anecdotal but in my experience in large parts of Europe, this already practically exists. From what I understand, in Germany at least, companies can demand that employees sign a non compete. However, once an employee departs the company, if the non compete agreement prevents the former employee from finding suitable work, the company must pay your salary until it can either prove that the non compete agreement is not the issue or until it releases the former employees from the agreement. Given those conditions, companies very rarely enforce their noncompete agreements and they’re functionally toothless.
- patrec 4y agoI don't think what you describe is functionally equivalent. I suspect the main benefit of non-competes is not that you can move around from bigcorp A to bigcorp B (although that's also useful for spreading know-how and utilizing talent efficiently), but rather that ex-employees of bigcorp A form new startups without fear. Would you either fund, found or join a startup if you knew that the threat of a non-compete hangs over you or a founder?
- robocat 4y agoThe dynamics are similar here in New Zealand, although here is how I would summarise the problems here: 1. We need gamblers There is a power distribution of returns. Even in the US the median profit for a startup founder is $0, and 95% of VC investments do not beat their market risk. In NZ the risks are higher and the rewards are less. 2. Founders lack of business skills Founders start unprofitable businesses and most New Zealanders are poor at marketing. There is also usually a lack of certain skilled employees because the pool of people with a particular skill is often small and the most skilled often move overseas. There is a limited culture of successful startups, and very limited access to experienced founders. 3. Investors are fucked. In New Zealand investors seem to me to actively sabotage their investments. Cause is probably lack of skills/experience, although it could be misalignment of incentives. Also investment amounts are puny - $100k is a sizeable investment. Infrastructure like standard legal terms is lacking. 4. Limited access to market. The NZ market is small. We create a lovely tech business, but then sell the business to a US owner because (a) NZers lack skills/knowledge to sell in a large “foreign” market, or (b) a US owner has access to customers, or (c) tariffs or other protections make it difficult to sell to US market (agricultural, Rocket Lab) 5. The easy life. Founder’s goal is often a business that nets you a few million to buy a holiday home and some toys. Few keep repeatably betting everything to win a unicorn. 6. Real estate. Property has been a reliable investment. Why do a high risk tech investment (founder or investor) when there is a low-risk easier road. 7. Government is mostly clueless. Government focuses on stupid non-commercial outcomes. Government is hopeless at encouraging enterprise. Comparatively little red tape compared to many other countries, but still too much (e.g. first employees are extremely high risk due to employment laws).
- nxmnxm99 4y agoHigh taxes and laziness. This is why Europe is a museum and China/India will dominate the future.
- Insanity 4y agoMoving to Canada from Europe feels partly like time travelling back to the 90s. I get what the article means, but from a “every day user” point of view, there are many luxuries that I miss from Europe and that are downright strange in Canada. People here are still using faxes and paper cheques, there is no connected health care system. Financial and telecom apps are a joke. Phone calls are the dominant way of communication still it seems. Like companies will literally ask you to call them as opposed to emailing. Online booking systems for appointments are not that widespread. Overall, while Canada has been a great place to live, in many ways I had to let go of the luxuries or EU tech. (Oh and since moving to Canada I had to start using paper mail, like a post office, to send and receive government documents. Never in decades had to do so in EU)
- yrgulation 4y agoEurope is more keen on stability. That and protectionism through bureaucracy means things are moving at a slow pace. Some like it that way. And to spicy things up a bit, european countries enjoy dominating one another with petty politics. There is some cooperation for show but by and large it’s mainly driven by old age colonialism without wars. Cross border cultural friction means slow adoption of innovation between countries. Just look at east europe where innovative tech companies do better on the us market than its own eu home market.
- macco 4y agoIf understand the article right according to the author high tech === software. I would say this is far from the truth. The first covid vaccine was developed in Europe. Europe plays a big role in green energy. I would say Europe can innovate. That doesn't mean that Europe hasn't many problems and disadvantages. 1. Lack of money for startups. Less venture capital and subsidies for startups. 2. Bad interplay between military research and startups. This basically created Silicon Valley, and it seems to be a big part in the Israeli startup scene. 3. A big part of scientific research is removed from universities => less potential founders get in contact with cutting-edge innovation. 4. No unified customer base to start with. The big home markets of China and the US seem to be a key advantage, at least for Internet/social media startups.
- cbayram 4y ago"American culture encourages the process of failure, unlike the cultures of Europe and Asia where failure is met with stigma and embarrassment. America’s specialty is to take these small risks for the rest of the world, which explains this country’s disproportionate share in innovations." - Nassim Taleb, The Black Swan
- TacticalCoder 4y ago> governments should not haunt founders for alleged tax crimes over paper valuations > Our banks don’t like startup founders and neither do many of our tax agencies, who often consider paper wealth to be real wealth. While they consider the paper wealth to be real, the tax agencies want to get paid with actual cash. > Banks, tax agencies and even family members distrust startups and will make life difficult for you. And on top of that the insane, purely insane, amount of paperwork. And if you mess up, it's fines, fines, more fines, then fines over the fines for not having paid the fines soon enough. The problem in most of the EU countries is that there's an ever growing public sector and administrations that always inflate in size full of people producing hardly anything besides rules and crazy paperwork that those who want to actually work have then to fill. You have IRS public servants coming to your place and saying stuff like (this happened to me): "Had I opened your file before I'd have noticed there was no money to take". I was clean but this gives the mindset: these guys come knocking at your door with the mindset: "There's money for the state to seize". I've literally seen a public servant, while I was very polite, not answering me, taking a paper from a pile of paper, the only pile of paper in its office, and slam it on the desk, without saying a word while she was... Playing minesweeper. For the role of that one public servant was to "serve" that one paper (some stuff you had to fill to require the right to prevent other people from parking in your street when the moving truck comes: of course this requires one dedicated servant only for that in every single town hall in Belgium? WTF...). It's a never ending Brazil (the movie) dystopia infernal circle of paperwork leading to more taxes being paid, leading to more public servants being hired, leading to new taxes. As the saying goes: *"In France you plant public servants and taxes grow" ("En France on plante des fonctionnaires et il pousse des impots").
- seydor 4y agoWhen we say "Europe is", what do we mean? If looking at different groups in europe, i think there 's a major distinction between age groups. At least in the south, young people are literally suffering because of the demographic divide that ensures that they have no wealth, no house, low wages, insecure jobs and work to pay pensions while they themselves will get little of them. There are also very established public sectors and regulatory hurdles that are not goign to be removed as long as people > 50 are the dominant voting group. I believe there's a big divide in the appetite for risk in younger people, but it's impossible for it to manifest because they are a minority.
- deterministic 4y agoHeh. Let me enumerate a few examples of inventions made in Europe: English. You know the language we are speaking right now. Radar, Shares, Stock Markets, Democracy, the Jet Engine, the Industrial Revolution, Double Entry Book Keeping, modern Banking, most religions etc. There is a very high chance that whatever tech or culture you are thinking about was invented in Europe. And today look at companies like ARM and ASML that dominate the chip industry. Or world class innovative companies like Airbus, Maersk, Porsche, Mercedes etc. Germany alone has thousands of world leading companies that you have never heard of but nevertheless are crucial for most products you have heard of. And let’s talk Google, Facebook etc. They are ad companies. And the ads business has been around for a long time. So it could be argued that those companies are not at all innovative. Yes there might be cool things they have done at the operational level to support their ad serving business and get more clicks. But the computers they run on would not have the power they have today without innovative European companies like ASML.
- th3h4mm3r 4y agoMoney. Without money there's no innovation. Ask yourself: what happened if Steve Jobs born i.e. In south Italy and not in USA?