18 ms·

How Europe crushes innovation

44 points by taylorbuley 1y ago

seydor 1y ago
It's not so much crushing innovation, as it's prioritizing anything but innovation. Primarily the importance and the finances of people living in Brussels. It's more parasitic than actively hostile
- Matticus_Rex 1y ago
  Creating an environment hospitable to parasitism is actively hostile to would-be hosts.
- rich_sasha 1y ago
  How does the cost of the Brussels administration compare to, say, the US federal administration? A spot-checked LLM answer tells me, as fraction of GDP: - EU: 1% - US: 24% - China: 35% That is quite a favourable comparison for Europe, I'd say. EDIT if anything, staring at these numbers, one might conclude the EU is not spending enough in general, in particular on innovation. Quite the stark contrast to being a money grab, IMO.
  - s0sa 1y ago
    How are you arriving at these percentages? Show your work.
    - ghaff 1y ago
      And add the per country spend that almost certainly exceeds per capita EU spend.
    - rich_sasha 1y ago
      How nicely you ask. I arrived at them by division. Since you ask so nicely, it gives me pleasure to provide further details: - This link discusses the 2025 EU budget: https://www.consilium.europa.eu/en/policies/eu-annual-budget/2025-budget/ https://www.consilium.europa.eu/en/policies/eu-annual-budget... there are two numbers. It is unclear if the budget is the sum, or if one number includes the other. But let's add them for an annual budget of approx 250bn EUR - EU GDP is around 20tn EUR according to this Wikipedia link: https://en.wikipedia.org/wiki/Economy_of_the_European_Union https://en.wikipedia.org/wiki/Economy_of_the_European_Union (the nominal number) - using division I arrive at 1.25% https://en.wikipedia.org/wiki/Division_(mathematics) https://en.wikipedia.org/wiki/Division_(mathematics) For the US: - This webpage: https://fiscaldata.treasury.gov/americas-finance-guide/federal-spending/ https://fiscaldata.treasury.gov/americas-finance-guide/feder... puts the federal spending at $6.66tn (hmm) - Wikipedia again puts US GDP at around $30tn: https://en.wikipedia.org/wiki/Economy_of_the_United_States https://en.wikipedia.org/wiki/Economy_of_the_United_States - We arrive at federal budget spending of 22% I'm not claiming these are the best or most up to date statistics, but this is a roughly 20x difference between US and Europe, and I understand the 2025 EU budget is particularly large. The notion that EU bureaucracy is particularly expensive has no foundation in fact, AFAICT.
      - s0sa 1y ago
        As I suspected, there isn’t much there. What about individual member state expenditures (perhaps even limited to spending on things required by EU law)? OP’s point may have been silly, but this really isn’t any better.
        rich_sasha 1y ago
        Oh great oracle, I bow to your superior thinking. Might you share then how the EU is a money grab for Brussels Eurocrats? With at least the level of detail you got from me?
  - rs_rs_rs_rs_rs 1y ago
    Comparison does not work, EU does very little compared to what the US/China administrations do, you'll have to add the cost of all the countries administration too.
    - rich_sasha 1y ago
      The claim was that the EU is a money grab for Brussels time wasters. The cost of the EU bureaucracy is minimal. What the member states spend, and if they do it well etc. is a totally separate question.
  - seydor 1y ago
    that's just the size of the eu budget but that's a fraction of what EUrocrats control via regulation and via their sovereignity in member states. EU is not a federal state government like the US
  - Muromec 1y ago
    Brussels isn't even a nice city, what is this even about.
- unglaublich 1y ago
  The Brussel's folks pay is change.
_DeadFred_ 1y ago
And the USA fixes that by moving the crushing to workers.
BallsInIt 1y ago
The "Innovation" of mass layoffs? Okay
sdenton4 1y ago
"Guys, we're crushing it on innovation! Even the Economist agrees!"
miguelxt 1y ago
https://archive.is/8UOIg https://archive.is/8UOIg
hernandipietro 1y ago
Innovation at the expense of crushing workers and increasing the gap between parasitic management compensation and worker wages. No, thanks. Europe may need reform but it’s not the USA way of doing things, except for the elite for which “ the economist “ is a already known and tired sockpuppet.
- oklahomasports 1y ago
  Why do you need to reference the USA? Makes it seem like your politics are based on resentment and not a dispassionate discussion of tradeoffs
  - only-one1701 1y ago
    Read the first 3 lines of the article, my man.
  - Scarblac 1y ago
    The part of the article I can read is about a contrast between the US and Europe.
  - aswerty 1y ago
    The article image is literally the USA with a jetpack and Europe with a ball and chain. So it seems self evident why somebody might reference the US.
  - latexr 1y ago
    The entire point of the article is to compare Europe to the USA. Even the illustration at the top makes that point immediately obvious and unambiguous.
    - oklahomasports 1y ago
      The comment I replied to is clearly emotionally engaged by that aspect of it
- Akranazon 1y ago
jimnotgym 1y ago
I live in Europe and you can do something very close to the American thing in my country. Germany and France are at one end of a spectrum.
- unglaublich 1y ago
  Estonia!
knowledge-clay 1y ago
I'd rather live in a society with strong labor protections than one that is "more innovative", whatever that means.
- bryanlarsen 1y ago
  You can have your cake and eat it too. It's called the Danish model, although Denmark does not completely implement it. Make it cheap & easy to both hire & fire people, but then take care of people who are fired through a generous safety net. High taxes pay for the safety net. Explicit taxes are better than implicit taxes. Forcing companies to provide social services such as employment guarantees or health insurance to employees makes taxes look lower than they actually are.
  - VirusNewbie 1y ago
    How does that work with immigration? Does Denmark allow anyone to receive these benefits?
    - bryanlarsen 1y ago
      You have to live there for 10 years before you qualify. But you get to pay the high taxes regardless of whether you qualify or not.
- jstummbillig 1y ago
  Do you really? Or do you actually want to sustain your standard of living as safely as you can? Because then the question arises: What if the current way of handling labor protection in the EU (as one of many components) leads to destroying yours and everyone elses standard of living, simply because it's unaffordable? Would you still argue that this is the way to go? Everyone going down with the ship together? I don't know what will happen and what the root causes are (labor laws might not contribute much to the picture, I really don't know), but at least we should be somewhat cognizant of the fact, where the industries of the future are currently built and where they are not, and have a fantastic explanation of why this is not going to be a super big issue.
cromulent 1y ago
The article (which is great) is written from the perspective of "large old established companies innovating". This is something that is fairly elusive even in the different environment of the rest of the western world, I think. Startups have a different set of constraints in Europe, one of which is the safety net for the people trying to become "ramen profitable".
ImageXav 1y ago
I would add an aspect that is not covered here but is often ignored: the strong labour protection laws result in a mentality where if you get a good job you are much less likely to want to take risks e.g. start your own business. There was a post on the HENRY (high earner, not rich yet) UK subreddit the other day from someone who had a wealth of experience and had the opportunity to join a start up as a CTO. It honestly sounded like a great chance to initiate change. All of the comments were telling the poster that they had it good, that 99% of start ups fail, that the hours would be gruelling. I feel as though the conversation would have been quite different in a US subreddit. A term they like to use is 'crabs in a bucket'.
- surgical_fire 1y ago
  And that was sound advice. I had the opportunity to move to the US and likely make 2-3x what I make in Europe. My question is - what for? I earn enough money here that I could buy a nice house and raise my family in relative comfort. Why take unnecessary risk when I already have what I want?
  - ImageXav 1y ago
    I guess that's the crux of it. From an individual perspective it makes sense to stay in a stable environment, especially if a family is involved. However, I think from a societal perspective it is desirable to have people who gamble on creating new products which can raise the bar in their given industries. Also, just because the start up fails doesn't mean it was a waste of time. If you manage to provide employment for even just 3 or 4 people for a few years, help them and yourself develop, that is a valuable success.
    - surgical_fire 1y ago
      But that will always come down to individual preferences. Typically people that have the desire to take risks don't need that sort of advice, they will be looking for that sort of thing already.
Muromec 1y ago
It is indeed pretty impossible to fire people who don't want to be fired. It's still possible to spin up a subsidiary and hire people into it and if doesn't work out, well, it didn't work out. Is it even the most commons reason why companies do layoffs? Sounds like a propaganda piece to suppress both wages and rights here.
- onraglanroad 1y ago
  > It is indeed pretty impossible to fire people It isn't really. In fact, it's usually very easy: you just have to follow the exact procedure that is written down for you. Every example I've seen when people have claimed differently, they haven't followed that procedure. Literally every time.
  - naldb 1y ago
    It’s very easy: spend an insane amount of money, usually at a time when your business can’t afford it.
    - surgical_fire 1y ago
      That's not how it works. You just can't fire at will. If your business can't afford to fire people it probably shouldn't be hiring too.
      - naldb 1y ago
        How do you know at the time of hiring that months or years down the road the business won’t go well?
        piva00 1y ago
        Isn't that part of the job of being in top management? Being paid millions of bucks for your skills that should tell what your business need? If the signs are showing that you might need to fire people, you need to think and work for that: set enough money aside to pay for severance and/or buy-outs, not just decide "oh shit, I can't pay them, and I can't pay what is needed for me to fire them", that's just incompetence. The way you present this is like business leaders are victims that were helpless on forecasting what their businesses need, which is exactly their fucking job to do.
latexr 1y ago
The article is really making the point that shitting on workers is OK—desirable even!—so that individual companies can make trillions of dollars. “Innovation” to the author equals making money, and being unable to sack hundreds of people at once with complete disregard for them or the social impact it causes is seen as a negative.
- Akranazon 1y ago
  It objectively is a negative. The American worker is much better off than the European worker. It doesn't matter if it makes you feel sad.
  - latexr 1y ago
    > The American worker is much better off than the European worker. In what ways, specifically? And which types of workers? Remember that labor laws aren’t exclusive to developers. > It doesn't matter if it makes you feel sad. Can we skip the transparent rage bait and personal jabs, though? There are other forums if you want to engage in that, I’m personally not interested.
    - Akranazon 1y ago
      > In what ways, specifically? Median wages https://en.wikipedia.org/wiki/Median_income?useskin=vector https://en.wikipedia.org/wiki/Median_income?useskin=vector Average work hours Purchasing power parity https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_per_capita?useskin=vector https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)... Despite average work hours https://en.wikipedia.org/wiki/List_of_countries_by_average_annual_labor_hours?useskin=vector https://en.wikipedia.org/wiki/List_of_countries_by_average_a... Better youth unemployment than Europe https://en.wikipedia.org/wiki/List_of_countries_by_unemployment_rate?useskin=vector https://en.wikipedia.org/wiki/List_of_countries_by_unemploym... > And which types of workers? High-skill professionals, entrepreneurs, specialized trades, creative workers, young people, immigrants... and most other professions. > Can we skip the transparent rage bait and personal jabs, though? If you make nebulous complaints about "shitting on workers" without considering tradeoffs, you've made a feelings-based argument, so expect that kind of rebuttal.
analog31 1y ago
I remember for the past 50 years, that Americans have been warned that looking across the oceans (or even the Great Lakes) for policy ideas would lead to "stagnation." The latest propaganda point is that Europe is even poorer than Mississippi. That sounds horrifying, if you've never been to either place. Meanwhile it seems that Europe has been pulling ahead of us in measures that affect the quality of life for common people, including the working class. While the fear of "stagnation" was remotely believable during the 1970s, it's clear today that we're the ones who've been hornswoggled. The US is still better for making software, as China is better for making printed circuit boards, but I'm not sure either of those things are all that bad for the common people.
cc81 1y ago
Sweden is relatively good at creating innovative companies but is pretty friendly towards small companies especially. Europe does lag behind though for many different reasons. One big is that the single market of EU is on paper large but in practice it is a lot of different countries with very different cultures and languages.
- bojan 1y ago
  > Europe does lag behind though for many different reasons. One big is that the single market of EU is on paper large but in practice it is a lot of different countries with very different cultures and languages. This is the biggest one. The single market is not really "done", and all attempts to deepen it face enormous resistance by national electorates that is now at the point to vote against anything that comes out of the EU. For example, in order to sell a product in the Netherlands you have to have a sticker in Dutch, even though >90% of population understands English. That's a tiny thing, but makes a supply chain that much more complex. For digital services it's even worse, the laws still differ significantly per country. Where I work we want to expand, but we still have to do it per country...
diego_moita 1y ago
Did anyone got the funny part? Here is it: they assume the "innovative" one to be the U.S., not China.
- slaw 1y ago
  There could be multiple innovation areas. Financial innovations, technical innovations or social innovations. For example S&P 500, electric cars or import Africa to Europe.
- s0sa 1y ago
  Well yeah, copying is not real innovation.
  - toomuchtodo 1y ago
    https://www.aspi.org.au/report/aspis-two-decade-critical-technology-tracker/ https://www.aspi.org.au/report/aspis-two-decade-critical-tec... (August 2024) > Now covering 64 critical technologies and crucial fields spanning defence, space, energy, the environment, artificial intelligence (AI), biotechnology, robotics, cyber, computing, advanced materials and key quantum technology areas, the Tech Tracker’s dataset has been expanded and updated from five years of data (previously, 2018–2022) to 21 years of data (2003–2023). > These new results reveal the stunning shift in research leadership over the past two decades towards large economies in the Indo-Pacific, led by China’s exceptional gains. The US led in 60 of 64 technologies in the five years from 2003 to 2007, but in the most recent five years (2019–2023) is leading in seven. China led in just three of 64 technologies in 2003–2007 but is now the lead country in 57 of 64 technologies in 2019–2023, increasing its lead from our rankings last year (2018–2022), where it was leading in 52 technologies. https://www.aspi.org.au/report/critical-technology-tracker https://www.aspi.org.au/report/critical-technology-tracker (March 2023) > Our research reveals that China has built the foundations to position itself as the world’s leading science and technology superpower, by establishing a sometimes stunning lead in high-impact research across the majority of critical and emerging technology domains. > China’s global lead extends to 37 out of 44 technologies that ASPI is now tracking, covering a range of crucial technology fields spanning defence, space, robotics, energy, the environment, biotechnology, artificial intelligence (AI), advanced materials and key quantum technology areas. The Critical Technology Tracker shows that, for some technologies, all of the world’s top 10 leading research institutions are based in China and are collectively generating nine times more high-impact research papers than the second-ranked country (most often the US). Notably, the Chinese Academy of Sciences ranks highly (and often first or second) across many of the 44 technologies included in the Critical Technology Tracker. We also see China’s efforts being bolstered through talent and knowledge import: one-fifth of its high-impact papers are being authored by researchers with postgraduate training in a Five-Eyes country. China’s lead is the product of deliberate design and long-term policy planning, as repeatedly outlined by Xi Jinping and his predecessors.
brendoelfrendo 1y ago
This article is so facile as to be meaningless. All it says is "making it easy to fire people is better for innovation," and then barely backs that up, as if it should be taken as writ that the author has found the one simple thing that Europe needs to fix. It talks about the "European model," but only really specifically mentions Germany (with a brief shout out to France in perhaps the only worthwhile section of the article, where it focuses on actual numbers) and doesn't really discuss anywhere else. It's certainly an opinion piece in that it showcases the author's opinion, but it doesn't do anything vis-a-vis persuasion.
flipgimble 1y ago
The “American boss” can also over-staff and then fire as they see fit and call it innovation. They hire way more people than they can employ long term, especially during another hype-driven tech bubble. They can get a few billion extra when they sell a company with 1000s of employees instead of 100s. Right after acquisition it’s time for mass layoffs because of “market conditions”. So employees work lives become another asset in speculator’s spreadsheets. When hackers hear “innovation” they probably think of solving an existing valuable problem better. It seems economists and CEOs think of innovation as finding a better way to extract maximum mental labor for the cheapest price. Then use that to maximize the value of their own equity, at the expense of society if necessary. If you’re building a heavily isolated bunker in Hawaii or New Zealand, you’re not exactly signaling you care about the rest of humanity’s well being.
robtherobber 1y ago
Unfortunately it is yet another piece from the Economist defending neoliberalism, as it has done from the beginning. Europe is not short on issues, one would have to agree, but the (hidden) author basically frames labour protections as inefficiencies rather than social achievements or desirables, and assumes investor imperatives are the only measure of success. What fairness? And what is this nonsense with people needing shelter, food, and healthcare? The business enterprise, in this hit piece, should not be simply another tool for improving the quality of life and helping create a society that's worth living in, but the sole purpose of the society itself. The "cumbersome process for letting go workers comes with hidden costs" aren't really hidden, unlike the author, but transparent social protections ensuring fair treatment, preventing arbitrary dismissal, and stabilising demand. Something a decent society should fully embrace. > the sheer difficulty of shedding staff en masse—a reality of corporate life—steers Europe’s biggest companies away from making risky bets in innovative fields No, thank you. Europe's lag in high-tech sectors stems mainly from underinvestment, fragmented capital markets, and US monopoly power, not employment law. Labour rigidity has no strict correlation with innovation deficits (Germany, Scandinavia, France, Japan, and South Korea all had stronger labour protections than the US and managed to become rather innovative), but why bother with data when the point was simply to bash Europe for protecting its workers from predatory businesses? At best, the evidence is mixed and context-dependent (focusing on patents, for example, instead of genuine innovation)[0], and OECD and Eurostat long-term data show that some high-innovation countries have some of the strongest worker protections and unions. > investments in disruptive breakthroughs [...] require the ability for big companies to hire lots of staff, then later fire most of them if the projects don’t pan out Likewise, nonsensical economic justification for precarious work. For the most part, innovation depends on R&D funding, talent, and public infrastructure, not firing freedom (which businesses are guaranteed to abuse). Rather than treating humans as disposable risk capital, the author should take a look at US's own history and they will undoubtedly notice that a significant part of the innovation that it benefits from today was developed when the US had huge taxes, immense investments in R&D and public infrastructure. [1] Strong social and environmental protections should be the bare minimum for any democratic society. Remove that, and no economic system, whether capitalist or not, is worth having. [0] https://www.oecd.org/content/dam/oecd/en/publications/reports/2002/01/labour-market-institutions-product-market-regulation-and-innovation_g17a1470/002243151077.pdf https://www.oecd.org/content/dam/oecd/en/publications/report... [1] https://www.sciencedirect.com/science/article/pii/S2590145120300025 https://www.sciencedirect.com/science/article/pii/S259014512...
MattPalmer1086 1y ago
I think most in Europe prefer the better living standards and higher life expectancy for most of the population. The american style lack of employment protection may play a part in fostering innovative companies, although I suspect being the primary superpower with the world's reserve currency may also play a part too. How is being incredibly innovative making everyone in the US happy? I just see a lot of division and unhappiness right now. And some very rich people.
gwbas1c 1y ago
> An American firm shedding workers will incur costs equivalent to paying those sacked for seven months and be done with it. Seems like the solution (in both the US and EU) is to have some kind of mandatory severance, probably something like continuation of salary for 1/12th of time employed, up to 12 or 18 months. Edit: This might impact negotiations with mid-career workers, as it'll make it harder to attract someone with a long tenure at an existing job without some kind of guaranteed severance.
kkfx 1y ago
As an European, I don't agree with the analysis: it's not labour law that has stifled innovation, but the post-WWII generation that chose to try stopping the train of history. Those born between the late 40s and 60s want NOTHING to do with innovation, people, from every social background and culture; the development model imposed after the war has killed Western Europe. From being the former greatest secular innovators, we've become the last wheels on the cart, still with some pockets of excellence, but not for long, and most don't want to capitalise on them. This is without even considering the high-treasonous nazi governments in almost all EU countries that pursue foreign interests against our own. Because this has been happening for decades, to put it plainly. The populations who, when young, sang "we are always twenty years old" today reject all innovation, and the cure is simply the social fracture that will lead them to marginalisation compared to their current dominance, unfortunately dragging everyone down with them.
- seec 1y ago
  Yes they are responsible for all the bullshit, and they keep voting for the same shit. It's maddening really, but how can it be different when they stand to gain so much via retirement benefits and other ways? It's really the failure mode of a socialized system; you end up pegging generations against each other and the older participant have a lot of power to starve off the young, especially when their cohort is so numerically dominant. Democracy is broken because everyone has the same right to vote, so an 80 years old bastard will be able to weigh in on the trajectory for the next 10-20 years in the same way as a young 20-30 something without ever having to suffer the consequences. It's just beyond stupid...
npc_anon 1y ago
All these takes on European workers being too shielded are nonsense. First of all, they're greatly exaggerated. The specific case of a large German company that is union connected doing layoffs is cherry picked. It's basically the most shielded situation possible but far from the norm in Europe as a whole. I'm from the Netherlands myself. Up until COVID we were on a path where employers were pushing everybody into flex contracts. It's a fixed length contract (1 year with a 3 month trial period) that may or may not be extended. Maximum flexibility for employers, minimum job security for employees. Did this lead to some spur in growth or innovation? No. Europe's problem isn't related to worker conditions. It's a silly thing to say considering ludicrous US tech salaries. Silicon Valley is the result of gigantic amounts of excess (Wall street?) capital creating a tech Valhalla. A black hole ecosystem swallowing money and talent domestic and abroad. Europe doesn't have this capital and the capital we do have we probably put in US tech stocks. It's a similar problem to US manufacturing vs Shenzen manufacturing. The Chinese government as well as many Western companies invested decades and hundreds of billions into making it the state-of-the-art factory of the world. Once it's in place you can't replicate it.
creer 1y ago
This has been the case for over 40 years by now. Europe has been lucky or has made the best of it, but imagine: 40 years of hobbled economy! But European firms have found some workarounds. For example, lots of engineers are owned, I mean, salaried by service companies who then contract that manpower to whoever wants some. A large company can then modulate year after year how many engineers of what kind they want to work for them. It adds a layer of intermediaries who collect a profit and shuffle paperwork - more costly - but engineers expect less salary to begin with. And this provides less control on who exactly does the work - which perhaps doesn't matter for the bulk of workers. But that's all easier than firing lots of people. It also makes it much easier to modulate between local and offshore engineering groups. Pooling engineers is big business.
grimblee 1y ago
The economist is ultra-rich propaganda, anyone agreeing with their articles without billions off-shore is just being manipulated against their best interest. What this tells me is: we want less regulation in Europe to accumulate more and more wealth, please be naive and passively agree with it.
duxup 1y ago
>“When firing is costly, as it is in most of Europe, employers are reluctant to invest in risky ventures,” Is that really the cost of innovation? People protections? I find that alone hard to believe / is the biggest issue in Europe. When I think of failed innovation I almost never. think "oh man this product would be better if we could fire people".
tsoukase 1y ago
Welfare state, social safety nets, socialism, you name it, kill innovation through a cascade of psychosocial mechanisms. This is a law that is written on the two sides of north Atlantic.
seec 1y ago
This happens because of bad incentives. Since the welfare state is on the spot to pick up the tabs via unemployment benefits they would rather have industries keep paying for as a long as possible even if it means killing the goose that laid the golden eggs in the long run. But all of this is largely amplified by globalisation. The welfare is not compatible with a world where companies can decide to set up shop somewhere else in the world to benefit from cheaper labour cost and lower regulations and still being able to sell their stuff in the market they somewhat destroyed. It ends up strengthening the state because workers defer to it and ask it to foot the bill. This all ends up being a vicious cycle where over time the state because massively obese and nothing moves because almost everything is dependent on it to some extent. Now to be fair it is absurd that companies are allowed to make so much profit and keep most of it, not redistributing to the workers who are actually contributing the most. But it all starts with bad regulations and incentives. Companies cannot be expected to compete with foreign imports that benefit from much lower costs in every dimension, that is just unfair competition. Free markets are an illusion that only benefits those at the top and this is largely where the problem lies. If imports were to be taxed appropriately, there would be less reasons to delocalize and the job market would be much more competitive for the demand side, rendering the layoff problem mostly moot. Who cares about benefits/compensation if the next job is right there?

44 points by taylorbuley 1y ago

It's not so much crushing innovation, as it's prioritizing anything but innovation. Primarily the importance and the finances of people living in Brussels. It's more parasitic than actively hostile

Matticus_Rex 1y ago
Creating an environment hospitable to parasitism is actively hostile to would-be hosts.
rich_sasha 1y ago
How does the cost of the Brussels administration compare to, say, the US federal administration? A spot-checked LLM answer tells me, as fraction of GDP: - EU: 1% - US: 24% - China: 35% That is quite a favourable comparison for Europe, I'd say. EDIT if anything, staring at these numbers, one might conclude the EU is not spending enough in general, in particular on innovation. Quite the stark contrast to being a money grab, IMO.
- s0sa 1y ago
  How are you arriving at these percentages? Show your work.
  - ghaff 1y ago
    And add the per country spend that almost certainly exceeds per capita EU spend.
  - rich_sasha 1y ago
    How nicely you ask. I arrived at them by division. Since you ask so nicely, it gives me pleasure to provide further details: - This link discusses the 2025 EU budget: https://www.consilium.europa.eu/en/policies/eu-annual-budget/2025-budget/ https://www.consilium.europa.eu/en/policies/eu-annual-budget... there are two numbers. It is unclear if the budget is the sum, or if one number includes the other. But let's add them for an annual budget of approx 250bn EUR - EU GDP is around 20tn EUR according to this Wikipedia link: https://en.wikipedia.org/wiki/Economy_of_the_European_Union https://en.wikipedia.org/wiki/Economy_of_the_European_Union (the nominal number) - using division I arrive at 1.25% https://en.wikipedia.org/wiki/Division_(mathematics) https://en.wikipedia.org/wiki/Division_(mathematics) For the US: - This webpage: https://fiscaldata.treasury.gov/americas-finance-guide/federal-spending/ https://fiscaldata.treasury.gov/americas-finance-guide/feder... puts the federal spending at $6.66tn (hmm) - Wikipedia again puts US GDP at around $30tn: https://en.wikipedia.org/wiki/Economy_of_the_United_States https://en.wikipedia.org/wiki/Economy_of_the_United_States - We arrive at federal budget spending of 22% I'm not claiming these are the best or most up to date statistics, but this is a roughly 20x difference between US and Europe, and I understand the 2025 EU budget is particularly large. The notion that EU bureaucracy is particularly expensive has no foundation in fact, AFAICT.
    - s0sa 1y ago
      As I suspected, there isn’t much there. What about individual member state expenditures (perhaps even limited to spending on things required by EU law)? OP’s point may have been silly, but this really isn’t any better.
      - rich_sasha 1y ago
        Oh great oracle, I bow to your superior thinking. Might you share then how the EU is a money grab for Brussels Eurocrats? With at least the level of detail you got from me?
- rs_rs_rs_rs_rs 1y ago
  Comparison does not work, EU does very little compared to what the US/China administrations do, you'll have to add the cost of all the countries administration too.
  - rich_sasha 1y ago
    The claim was that the EU is a money grab for Brussels time wasters. The cost of the EU bureaucracy is minimal. What the member states spend, and if they do it well etc. is a totally separate question.
- seydor 1y ago
  that's just the size of the eu budget but that's a fraction of what EUrocrats control via regulation and via their sovereignity in member states. EU is not a federal state government like the US
- Muromec 1y ago
  Brussels isn't even a nice city, what is this even about.
unglaublich 1y ago
The Brussel's folks pay is change.

_DeadFred_ 1y ago

And the USA fixes that by moving the crushing to workers.

BallsInIt 1y ago

The "Innovation" of mass layoffs? Okay

sdenton4 1y ago

"Guys, we're crushing it on innovation! Even the Economist agrees!"

miguelxt 1y ago

https://archive.is/8UOIg https://archive.is/8UOIg

hernandipietro 1y ago

Innovation at the expense of crushing workers and increasing the gap between parasitic management compensation and worker wages. No, thanks. Europe may need reform but it’s not the USA way of doing things, except for the elite for which “ the economist “ is a already known and tired sockpuppet.

oklahomasports 1y ago
Why do you need to reference the USA? Makes it seem like your politics are based on resentment and not a dispassionate discussion of tradeoffs
- only-one1701 1y ago
  Read the first 3 lines of the article, my man.
- Scarblac 1y ago
  The part of the article I can read is about a contrast between the US and Europe.
- aswerty 1y ago
  The article image is literally the USA with a jetpack and Europe with a ball and chain. So it seems self evident why somebody might reference the US.
- latexr 1y ago
  The entire point of the article is to compare Europe to the USA. Even the illustration at the top makes that point immediately obvious and unambiguous.
  - oklahomasports 1y ago
    The comment I replied to is clearly emotionally engaged by that aspect of it
Akranazon 1y ago

jimnotgym 1y ago

I live in Europe and you can do something very close to the American thing in my country. Germany and France are at one end of a spectrum.

unglaublich 1y ago
Estonia!

knowledge-clay 1y ago

I'd rather live in a society with strong labor protections than one that is "more innovative", whatever that means.

bryanlarsen 1y ago
You can have your cake and eat it too. It's called the Danish model, although Denmark does not completely implement it. Make it cheap & easy to both hire & fire people, but then take care of people who are fired through a generous safety net. High taxes pay for the safety net. Explicit taxes are better than implicit taxes. Forcing companies to provide social services such as employment guarantees or health insurance to employees makes taxes look lower than they actually are.
- VirusNewbie 1y ago
  How does that work with immigration? Does Denmark allow anyone to receive these benefits?
  - bryanlarsen 1y ago
    You have to live there for 10 years before you qualify. But you get to pay the high taxes regardless of whether you qualify or not.
jstummbillig 1y ago
Do you really? Or do you actually want to sustain your standard of living as safely as you can? Because then the question arises: What if the current way of handling labor protection in the EU (as one of many components) leads to destroying yours and everyone elses standard of living, simply because it's unaffordable? Would you still argue that this is the way to go? Everyone going down with the ship together? I don't know what will happen and what the root causes are (labor laws might not contribute much to the picture, I really don't know), but at least we should be somewhat cognizant of the fact, where the industries of the future are currently built and where they are not, and have a fantastic explanation of why this is not going to be a super big issue.

cromulent 1y ago

The article (which is great) is written from the perspective of "large old established companies innovating". This is something that is fairly elusive even in the different environment of the rest of the western world, I think. Startups have a different set of constraints in Europe, one of which is the safety net for the people trying to become "ramen profitable".

ImageXav 1y ago

I would add an aspect that is not covered here but is often ignored: the strong labour protection laws result in a mentality where if you get a good job you are much less likely to want to take risks e.g. start your own business. There was a post on the HENRY (high earner, not rich yet) UK subreddit the other day from someone who had a wealth of experience and had the opportunity to join a start up as a CTO. It honestly sounded like a great chance to initiate change. All of the comments were telling the poster that they had it good, that 99% of start ups fail, that the hours would be gruelling. I feel as though the conversation would have been quite different in a US subreddit. A term they like to use is 'crabs in a bucket'.

surgical_fire 1y ago
And that was sound advice. I had the opportunity to move to the US and likely make 2-3x what I make in Europe. My question is - what for? I earn enough money here that I could buy a nice house and raise my family in relative comfort. Why take unnecessary risk when I already have what I want?
- ImageXav 1y ago
  I guess that's the crux of it. From an individual perspective it makes sense to stay in a stable environment, especially if a family is involved. However, I think from a societal perspective it is desirable to have people who gamble on creating new products which can raise the bar in their given industries. Also, just because the start up fails doesn't mean it was a waste of time. If you manage to provide employment for even just 3 or 4 people for a few years, help them and yourself develop, that is a valuable success.
  - surgical_fire 1y ago
    But that will always come down to individual preferences. Typically people that have the desire to take risks don't need that sort of advice, they will be looking for that sort of thing already.

Muromec 1y ago

It is indeed pretty impossible to fire people who don't want to be fired. It's still possible to spin up a subsidiary and hire people into it and if doesn't work out, well, it didn't work out. Is it even the most commons reason why companies do layoffs? Sounds like a propaganda piece to suppress both wages and rights here.

onraglanroad 1y ago
> It is indeed pretty impossible to fire people It isn't really. In fact, it's usually very easy: you just have to follow the exact procedure that is written down for you. Every example I've seen when people have claimed differently, they haven't followed that procedure. Literally every time.
- naldb 1y ago
  It’s very easy: spend an insane amount of money, usually at a time when your business can’t afford it.
  - surgical_fire 1y ago
    That's not how it works. You just can't fire at will. If your business can't afford to fire people it probably shouldn't be hiring too.
    - naldb 1y ago
      How do you know at the time of hiring that months or years down the road the business won’t go well?
      - piva00 1y ago
        Isn't that part of the job of being in top management? Being paid millions of bucks for your skills that should tell what your business need? If the signs are showing that you might need to fire people, you need to think and work for that: set enough money aside to pay for severance and/or buy-outs, not just decide "oh shit, I can't pay them, and I can't pay what is needed for me to fire them", that's just incompetence. The way you present this is like business leaders are victims that were helpless on forecasting what their businesses need, which is exactly their fucking job to do.

latexr 1y ago

The article is really making the point that shitting on workers is OK—desirable even!—so that individual companies can make trillions of dollars. “Innovation” to the author equals making money, and being unable to sack hundreds of people at once with complete disregard for them or the social impact it causes is seen as a negative.

Akranazon 1y ago
It objectively is a negative. The American worker is much better off than the European worker. It doesn't matter if it makes you feel sad.
- latexr 1y ago
  > The American worker is much better off than the European worker. In what ways, specifically? And which types of workers? Remember that labor laws aren’t exclusive to developers. > It doesn't matter if it makes you feel sad. Can we skip the transparent rage bait and personal jabs, though? There are other forums if you want to engage in that, I’m personally not interested.
  - Akranazon 1y ago
    > In what ways, specifically? Median wages https://en.wikipedia.org/wiki/Median_income?useskin=vector https://en.wikipedia.org/wiki/Median_income?useskin=vector Average work hours Purchasing power parity https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_per_capita?useskin=vector https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)... Despite average work hours https://en.wikipedia.org/wiki/List_of_countries_by_average_annual_labor_hours?useskin=vector https://en.wikipedia.org/wiki/List_of_countries_by_average_a... Better youth unemployment than Europe https://en.wikipedia.org/wiki/List_of_countries_by_unemployment_rate?useskin=vector https://en.wikipedia.org/wiki/List_of_countries_by_unemploym... > And which types of workers? High-skill professionals, entrepreneurs, specialized trades, creative workers, young people, immigrants... and most other professions. > Can we skip the transparent rage bait and personal jabs, though? If you make nebulous complaints about "shitting on workers" without considering tradeoffs, you've made a feelings-based argument, so expect that kind of rebuttal.

analog31 1y ago

I remember for the past 50 years, that Americans have been warned that looking across the oceans (or even the Great Lakes) for policy ideas would lead to "stagnation." The latest propaganda point is that Europe is even poorer than Mississippi. That sounds horrifying, if you've never been to either place. Meanwhile it seems that Europe has been pulling ahead of us in measures that affect the quality of life for common people, including the working class. While the fear of "stagnation" was remotely believable during the 1970s, it's clear today that we're the ones who've been hornswoggled. The US is still better for making software, as China is better for making printed circuit boards, but I'm not sure either of those things are all that bad for the common people.

cc81 1y ago

Sweden is relatively good at creating innovative companies but is pretty friendly towards small companies especially. Europe does lag behind though for many different reasons. One big is that the single market of EU is on paper large but in practice it is a lot of different countries with very different cultures and languages.

bojan 1y ago
> Europe does lag behind though for many different reasons. One big is that the single market of EU is on paper large but in practice it is a lot of different countries with very different cultures and languages. This is the biggest one. The single market is not really "done", and all attempts to deepen it face enormous resistance by national electorates that is now at the point to vote against anything that comes out of the EU. For example, in order to sell a product in the Netherlands you have to have a sticker in Dutch, even though >90% of population understands English. That's a tiny thing, but makes a supply chain that much more complex. For digital services it's even worse, the laws still differ significantly per country. Where I work we want to expand, but we still have to do it per country...

diego_moita 1y ago

Did anyone got the funny part? Here is it: they assume the "innovative" one to be the U.S., not China.

slaw 1y ago
There could be multiple innovation areas. Financial innovations, technical innovations or social innovations. For example S&P 500, electric cars or import Africa to Europe.
s0sa 1y ago
Well yeah, copying is not real innovation.
- toomuchtodo 1y ago
  https://www.aspi.org.au/report/aspis-two-decade-critical-technology-tracker/ https://www.aspi.org.au/report/aspis-two-decade-critical-tec... (August 2024) > Now covering 64 critical technologies and crucial fields spanning defence, space, energy, the environment, artificial intelligence (AI), biotechnology, robotics, cyber, computing, advanced materials and key quantum technology areas, the Tech Tracker’s dataset has been expanded and updated from five years of data (previously, 2018–2022) to 21 years of data (2003–2023). > These new results reveal the stunning shift in research leadership over the past two decades towards large economies in the Indo-Pacific, led by China’s exceptional gains. The US led in 60 of 64 technologies in the five years from 2003 to 2007, but in the most recent five years (2019–2023) is leading in seven. China led in just three of 64 technologies in 2003–2007 but is now the lead country in 57 of 64 technologies in 2019–2023, increasing its lead from our rankings last year (2018–2022), where it was leading in 52 technologies. https://www.aspi.org.au/report/critical-technology-tracker https://www.aspi.org.au/report/critical-technology-tracker (March 2023) > Our research reveals that China has built the foundations to position itself as the world’s leading science and technology superpower, by establishing a sometimes stunning lead in high-impact research across the majority of critical and emerging technology domains. > China’s global lead extends to 37 out of 44 technologies that ASPI is now tracking, covering a range of crucial technology fields spanning defence, space, robotics, energy, the environment, biotechnology, artificial intelligence (AI), advanced materials and key quantum technology areas. The Critical Technology Tracker shows that, for some technologies, all of the world’s top 10 leading research institutions are based in China and are collectively generating nine times more high-impact research papers than the second-ranked country (most often the US). Notably, the Chinese Academy of Sciences ranks highly (and often first or second) across many of the 44 technologies included in the Critical Technology Tracker. We also see China’s efforts being bolstered through talent and knowledge import: one-fifth of its high-impact papers are being authored by researchers with postgraduate training in a Five-Eyes country. China’s lead is the product of deliberate design and long-term policy planning, as repeatedly outlined by Xi Jinping and his predecessors.

brendoelfrendo 1y ago

This article is so facile as to be meaningless. All it says is "making it easy to fire people is better for innovation," and then barely backs that up, as if it should be taken as writ that the author has found the one simple thing that Europe needs to fix. It talks about the "European model," but only really specifically mentions Germany (with a brief shout out to France in perhaps the only worthwhile section of the article, where it focuses on actual numbers) and doesn't really discuss anywhere else. It's certainly an opinion piece in that it showcases the author's opinion, but it doesn't do anything vis-a-vis persuasion.

flipgimble 1y ago

The “American boss” can also over-staff and then fire as they see fit and call it innovation. They hire way more people than they can employ long term, especially during another hype-driven tech bubble. They can get a few billion extra when they sell a company with 1000s of employees instead of 100s. Right after acquisition it’s time for mass layoffs because of “market conditions”. So employees work lives become another asset in speculator’s spreadsheets. When hackers hear “innovation” they probably think of solving an existing valuable problem better. It seems economists and CEOs think of innovation as finding a better way to extract maximum mental labor for the cheapest price. Then use that to maximize the value of their own equity, at the expense of society if necessary. If you’re building a heavily isolated bunker in Hawaii or New Zealand, you’re not exactly signaling you care about the rest of humanity’s well being.

robtherobber 1y ago

Unfortunately it is yet another piece from the Economist defending neoliberalism, as it has done from the beginning. Europe is not short on issues, one would have to agree, but the (hidden) author basically frames labour protections as inefficiencies rather than social achievements or desirables, and assumes investor imperatives are the only measure of success. What fairness? And what is this nonsense with people needing shelter, food, and healthcare? The business enterprise, in this hit piece, should not be simply another tool for improving the quality of life and helping create a society that's worth living in, but the sole purpose of the society itself. The "cumbersome process for letting go workers comes with hidden costs" aren't really hidden, unlike the author, but transparent social protections ensuring fair treatment, preventing arbitrary dismissal, and stabilising demand. Something a decent society should fully embrace. > the sheer difficulty of shedding staff en masse—a reality of corporate life—steers Europe’s biggest companies away from making risky bets in innovative fields No, thank you. Europe's lag in high-tech sectors stems mainly from underinvestment, fragmented capital markets, and US monopoly power, not employment law. Labour rigidity has no strict correlation with innovation deficits (Germany, Scandinavia, France, Japan, and South Korea all had stronger labour protections than the US and managed to become rather innovative), but why bother with data when the point was simply to bash Europe for protecting its workers from predatory businesses? At best, the evidence is mixed and context-dependent (focusing on patents, for example, instead of genuine innovation)[0], and OECD and Eurostat long-term data show that some high-innovation countries have some of the strongest worker protections and unions. > investments in disruptive breakthroughs [...] require the ability for big companies to hire lots of staff, then later fire most of them if the projects don’t pan out Likewise, nonsensical economic justification for precarious work. For the most part, innovation depends on R&D funding, talent, and public infrastructure, not firing freedom (which businesses are guaranteed to abuse). Rather than treating humans as disposable risk capital, the author should take a look at US's own history and they will undoubtedly notice that a significant part of the innovation that it benefits from today was developed when the US had huge taxes, immense investments in R&D and public infrastructure. [1] Strong social and environmental protections should be the bare minimum for any democratic society. Remove that, and no economic system, whether capitalist or not, is worth having. [0] https://www.oecd.org/content/dam/oecd/en/publications/reports/2002/01/labour-market-institutions-product-market-regulation-and-innovation_g17a1470/002243151077.pdf https://www.oecd.org/content/dam/oecd/en/publications/report... [1] https://www.sciencedirect.com/science/article/pii/S2590145120300025 https://www.sciencedirect.com/science/article/pii/S259014512...

MattPalmer1086 1y ago

I think most in Europe prefer the better living standards and higher life expectancy for most of the population. The american style lack of employment protection may play a part in fostering innovative companies, although I suspect being the primary superpower with the world's reserve currency may also play a part too. How is being incredibly innovative making everyone in the US happy? I just see a lot of division and unhappiness right now. And some very rich people.

gwbas1c 1y ago

> An American firm shedding workers will incur costs equivalent to paying those sacked for seven months and be done with it. Seems like the solution (in both the US and EU) is to have some kind of mandatory severance, probably something like continuation of salary for 1/12th of time employed, up to 12 or 18 months. Edit: This might impact negotiations with mid-career workers, as it'll make it harder to attract someone with a long tenure at an existing job without some kind of guaranteed severance.

kkfx 1y ago

As an European, I don't agree with the analysis: it's not labour law that has stifled innovation, but the post-WWII generation that chose to try stopping the train of history. Those born between the late 40s and 60s want NOTHING to do with innovation, people, from every social background and culture; the development model imposed after the war has killed Western Europe. From being the former greatest secular innovators, we've become the last wheels on the cart, still with some pockets of excellence, but not for long, and most don't want to capitalise on them. This is without even considering the high-treasonous nazi governments in almost all EU countries that pursue foreign interests against our own. Because this has been happening for decades, to put it plainly. The populations who, when young, sang "we are always twenty years old" today reject all innovation, and the cure is simply the social fracture that will lead them to marginalisation compared to their current dominance, unfortunately dragging everyone down with them.

seec 1y ago
Yes they are responsible for all the bullshit, and they keep voting for the same shit. It's maddening really, but how can it be different when they stand to gain so much via retirement benefits and other ways? It's really the failure mode of a socialized system; you end up pegging generations against each other and the older participant have a lot of power to starve off the young, especially when their cohort is so numerically dominant. Democracy is broken because everyone has the same right to vote, so an 80 years old bastard will be able to weigh in on the trajectory for the next 10-20 years in the same way as a young 20-30 something without ever having to suffer the consequences. It's just beyond stupid...

npc_anon 1y ago

All these takes on European workers being too shielded are nonsense. First of all, they're greatly exaggerated. The specific case of a large German company that is union connected doing layoffs is cherry picked. It's basically the most shielded situation possible but far from the norm in Europe as a whole. I'm from the Netherlands myself. Up until COVID we were on a path where employers were pushing everybody into flex contracts. It's a fixed length contract (1 year with a 3 month trial period) that may or may not be extended. Maximum flexibility for employers, minimum job security for employees. Did this lead to some spur in growth or innovation? No. Europe's problem isn't related to worker conditions. It's a silly thing to say considering ludicrous US tech salaries. Silicon Valley is the result of gigantic amounts of excess (Wall street?) capital creating a tech Valhalla. A black hole ecosystem swallowing money and talent domestic and abroad. Europe doesn't have this capital and the capital we do have we probably put in US tech stocks. It's a similar problem to US manufacturing vs Shenzen manufacturing. The Chinese government as well as many Western companies invested decades and hundreds of billions into making it the state-of-the-art factory of the world. Once it's in place you can't replicate it.

creer 1y ago

This has been the case for over 40 years by now. Europe has been lucky or has made the best of it, but imagine: 40 years of hobbled economy! But European firms have found some workarounds. For example, lots of engineers are owned, I mean, salaried by service companies who then contract that manpower to whoever wants some. A large company can then modulate year after year how many engineers of what kind they want to work for them. It adds a layer of intermediaries who collect a profit and shuffle paperwork - more costly - but engineers expect less salary to begin with. And this provides less control on who exactly does the work - which perhaps doesn't matter for the bulk of workers. But that's all easier than firing lots of people. It also makes it much easier to modulate between local and offshore engineering groups. Pooling engineers is big business.

grimblee 1y ago

The economist is ultra-rich propaganda, anyone agreeing with their articles without billions off-shore is just being manipulated against their best interest. What this tells me is: we want less regulation in Europe to accumulate more and more wealth, please be naive and passively agree with it.

duxup 1y ago

>“When firing is costly, as it is in most of Europe, employers are reluctant to invest in risky ventures,” Is that really the cost of innovation? People protections? I find that alone hard to believe / is the biggest issue in Europe. When I think of failed innovation I almost never. think "oh man this product would be better if we could fire people".

tsoukase 1y ago

Welfare state, social safety nets, socialism, you name it, kill innovation through a cascade of psychosocial mechanisms. This is a law that is written on the two sides of north Atlantic.

seec 1y ago

This happens because of bad incentives. Since the welfare state is on the spot to pick up the tabs via unemployment benefits they would rather have industries keep paying for as a long as possible even if it means killing the goose that laid the golden eggs in the long run. But all of this is largely amplified by globalisation. The welfare is not compatible with a world where companies can decide to set up shop somewhere else in the world to benefit from cheaper labour cost and lower regulations and still being able to sell their stuff in the market they somewhat destroyed. It ends up strengthening the state because workers defer to it and ask it to foot the bill. This all ends up being a vicious cycle where over time the state because massively obese and nothing moves because almost everything is dependent on it to some extent. Now to be fair it is absurd that companies are allowed to make so much profit and keep most of it, not redistributing to the workers who are actually contributing the most. But it all starts with bad regulations and incentives. Companies cannot be expected to compete with foreign imports that benefit from much lower costs in every dimension, that is just unfair competition. Free markets are an illusion that only benefits those at the top and this is largely where the problem lies. If imports were to be taxed appropriately, there would be less reasons to delocalize and the job market would be much more competitive for the demand side, rendering the layoff problem mostly moot. Who cares about benefits/compensation if the next job is right there?