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Where Is Europe's Silicon Valley?
An anonymous reader writes: A New York Times story delves into the conundrum faced by Europeans: Why are there few, if any, technology companies from Europe with the size and reach of American tech giants like Google, Amazon, and Apple? The article hypothesizes that, though employment regulations and other business and legal factors play a role, it's actually deeply embedded cultural differences that are the primary cause, citing less aversion to risk-taking, less stigma from business failures such as bankruptcies, little or no stigma from leaving and rejoining a company (seen as disloyal in European cultures), more acceptance of disruptive innovation, and a less rigid educational system that allows individuals to find their own form of success.
Now not to sound like a bat crazy right winger. Europe does tend to go a bit to far in being pro-worker, and anti-corporation. To a point where there is so much stuff that running a business is harder to do in that area. When companies expend they like to try to go to Europe, however they find the rules to be prohibitive, and prevents actually getting to the goals.
Now I am not say we should let the Corporations do what they want as that will only create more business, because that is false. There is a balance that is needed, where employee are treated and compensated fairly for their work and are able to thrive in their area of living, however the company needs the freedoms to take risks and run their business and trying different ways to run it.
This is shown by the weaker EU members during the last recession, they had too much entitlements that cost more then what would cover when things are not working well. The larger EU members were big enough to handle such entitlements but the smaller members cannot. The US during the same crisis got hit but recovered faster because of a more conservative approach towards entitlements. Granted the US is the biggest economy, however if implements EU style entitlements you will find many States will have massive economic problems. Much like how the EU nations had problems. Richer states, NY, California, Texas, Illinois may be able to weather the down times, but Vermont, or Kansas?
If something is so important that you feel the need to post it on the internet... It probably isn't that important.
This is probably difficult to understand for Americans, but the key factor that makes SV so amazing is that venture capitalists over there are a century ahead in terms of taking risks than anywhere else in the world
Most of Silicon Valley isn't amazing. Most businesses supported by that venture capital culture you're talking about fail.
The peculiar thing about SV is the glorification of failure. It's rather like the traditional American Dream, where everyone is going to be rich one day so huge numbers of ordinary people irrationally support policies that actively go against their interests and probably always will. The venture capital model is based on the idea that if you support 100 businesses, it doesn't matter if 99 of them blow your whole investment and then die, as long as the last one becomes the next Facebook or Google or Amazon.
You can get away with this in the US partly because there is a seemingly endless supply of kids who are willing to basically give up any sort of work-life balance for a while in the hope that they too will be the next Larry Page or Mark Zuckerberg. In Europe, you'll be hard pressed to find even a newbie in the industry who actually thinks stock options are worth anything these days, and several popular employment practices in the tech industry are literally illegal and would be viewed as worker exploitation.
In other news, look at the electronic devices around you, and tell me who designed the processors driving the majority of them. It's probably ARM, which is based here in Cambridge, UK and has an 11-figure market cap. Also here in Cambridge we have what is now HP Autonomy, and whatever you think about Autonomy and/or the HP acquisition, it is a matter of fact that someone paid 11 figures USD for that business, too. We do grow some substantial, widely influential tech businesses in Europe, they just aren't always the very biggest or highest profile ones.
If you disagree, post your argument. (-1, Overrated) isn't your personal censorship tool for views you don't like.
1. One logical type of location would be adventurous, investor-friendly corners of Europe: Ireland, Iceland, Scotland (which is already promoting a "Silicon Glen").
2. But a better bet might be industrial rust belts like Upper Silesia in Poland, or Birmingham, which like its American namesake is redneck heaven (the term there is "chavs"). These are places which already have dense industrial infrastructure like power and rail service, but it's now underutilized as the heavy industry has moved elsewhere. Tech could be a good replacement.
3. The Paris suburbs and Hauts-du-Seine: People don't realize how tech-friendly France is. It leads the world in applied nuclear and is a close second to the US in aerospace.
4. The Swiss watch country of Jura and Geneva: long experience in precision electrical and mechanical engineering. Rural towns like Lengnau are now looking for a clean industry to succeed it.
There are many reasons but I think the best one is that there is a brain drain.
Why set up in Europe that doesn't have good laws and tax breaks for start ups anyway... when you can just move to the US and be surrounded by the best and the brightest from the whole world?
Its worse than the europeans realize because we've pretty much filled SV to capacity and now we're seeding Seattle with more of it and Austin, Dallas, a little in Los Angeles, and even something in Boston.
The US draws them in like a loadstone. The Euros are going to have to offer very attractive subsidies to keep those people in Europe. Think of the sort of pull Europe would have to have to start pulling American tech startups to Europe. That is how hard the US is pulling... If the Euros haven't noticed this then they're not paying attention. The US wants ALL your bright minds. All of them.
America is drinking your mental milkshake. *sluuuuuuuurp*
https://www.youtube.com/watch?...
I've decided to stop wasting my time responding to AC trolls/sockpuppets... so if you want a response from me... login.
Europe 110 years ago ruled the world, period. Compared to that time, our influcence in the world is nothing. Since then we had a horrible 30 year war and countless genocides. America on the other hand never had any war on its main land. After that war, europe was split in two: one russian hemisphere and one american. And both americans and russians are clinging on their part, with now most of europe being an US colony. If we can't fight the russians ourselves, but have to hide behind the american army, how can we ever claim to be sovereign, and call the US an "equal partner"?
In the IT industry, I'm against of having our own "europe data cloud", like russia and china have them. The internet is something global. Rather, we should have a globalized market with different competitors from different countries. Also, europe is very strong in the free software world. Qt was initiated from norwegians, and stayed under control of european companies for a long time, KDE comes from Germany.
When many people learn english in europe, they favour united states english over british english, even if GB is in europe. This is partly thanks to hollywood, partly to the strong american economy. There is no inner-european patriotism at all. People are still thinking in their "nations", and reduce the EU to their negative parts. These all problems that have to be solved together, because they are interconnected.
I think you missed my point on both counts.
ARM don't mass-produce processors, they design them. And they're so good at it that numerous other businesses do mass-produce processors based on those designs. (Also, you're being rather optimistic about Intel being able to buy them with loose change. Intel is a much bigger firm, but not that much bigger.)
And I'm not suggesting that HP are British. I'm saying that despite their size they were willing to pony up ten billion dollars for a British company rather than try to enter the space themselves.
As I said, the tech companies we produce in Europe aren't always the biggest or highest profile, but we already have our successes both technologically and commercially without the boom/bust culture of SV.
Finally, you do realise that Siemens is German, and therefore another example of a very successful European firm involved in a lot of tech industries, right?
If you disagree, post your argument. (-1, Overrated) isn't your personal censorship tool for views you don't like.
Europe does tend to go a bit to far in being pro-worker, and anti-corporation.
I do not think it is anti-business per se.
In one German book about business, in the basics, I have read that business is like a privilege bestowed for the benefit of the society. And imagine that: there were no mention of money nowhere near the definition.
In other words, it is not seen as a device for personal enrichment. And it is handled as such, at the very least, to cause no harm to people and society.
In the end, I do not see the lack of an overcrowded tech town as a shortcoming. If a packed tech community is your thing, then there are several cities with strong tech sector - Berlin, Munich, Frankfurt, Dresden, Nuremberg, etc, their satellites - which provide enough opportunities for businesses and workers.
All hope abandon ye who enter here.
look man, if parent post wasn't at least partially true, you wouldn't have things like SF residents up in arms over companies like Genentech or Google using private busing. There is a very very clear differentiation between the haves and have not's. Kind of a bad comparison *now*, but prior to becoming the 'rust belt', the northern Midwest produced 'things', as well as a huge middle class across multiple industries.
Tricking people into clicking on ads, or electronically stalking them not only fails to produce wealth outside of shareholders, but it has a negative social value as well. (though that's arguably just an opinion.)
Worker protection in the EU isn't the problem. There are all sorts of ways to go around the protections. If you had been in business here you would have noticed that. Outsourcing is one of the ways that "problem" gets worked around here. Worker protection for outsourced staff can be quite flimsy.
I would also say that bankruptcies actually happen quite a lot in the EU. What is much less common in the EU are successful restructurings or people who get back on business later and have success at it. Quite often it is legally easier to declare bankruptcy here than to restructure a company, especially if you have a large contingent of long term employees that would otherwise be hard to dismiss, while starting a new business after a failure can be quite problematic. Quite often in Europe people in the business know each other really well, it is a lot smaller, if people know you failed once they will be adverse to doing business with you again unless you provide extraordinary assurances that you probably wouldn't need in the USA. This is a cultural matter. I have noticed people in the USA usually keep to their own business and don't care much what happens around them but I can assure you the opposite is usually true in the EU. For good and bad.
The main issue in the EU is the lack of easy access to funding and the risk-adverseness of those with capital in Europe. They basically expect guaranteed returns on everything they fund. A lot of them got rich off the teat of the government or of government backed monopolies and are not interested in anything remotely competitive. So most innovation ends up happening with small enterprises people start on their own houses, much like in the USA I guess, the problem is then these small businesses cannot scale because there are no viable sources of funding to grow the business. So quite often either the business grows slowly and organically until it becomes massive (e.g. Ikea) or the founders just cash out on the business very early. But quite often the cash out isn't as gargantuan as what you see happening in the USA. It quite often ends up paying out like an order or two of magnitude less. If Facebook had been funded in the EU I bet if they did an IPO there people wouldn't have thrown them all that money just that. Then this money given to founders can be re-invested in new businesses. That's the main problem here. In Europe the founders never get quite enough to bankroll major new investments like what happens over there.
There are also infrastructure problems. The article talks about Silicon Valley. Well there aren't a lot of places where you can do silicon prototyping or manufacturing in the EU. There's Silicon Fen i.e. Cambridge the UK and Grenoble in France but little else. There are quite a lot of software hubs though. Like Silicon Glen in Scotland for games software, or Estonia (a place where Finnish investors usually go to because costs are cheaper and Internet access is fast) where Skype was located. etc.
Most of the "weaker" EU members during the last recession failed due to private banks failing and the state assuming their losses. Most of the talk about entitlements is pure bullshit.
Because we value our standard of health and living more than fat corporations.
Wish I had mod points.
I would point out though that Apple were one of the original investors in ARM. They even helped with the early (though not the initial) silicon design.
The article is also wrong on other points. I've had two companies in the UK, the first failed (and I didn't really feel any "stigma". It just didn't work out); the second (which contained mainly the same people as the first) was bought up, which is why I'm over in Sunny CA now rather than back in London...
The social net is actually a lot stronger in the UK I feel (as someone who's lived in the US for the last decade), so having a company fail on you isn't the enormous burden that it is in the USA. There's a lot of ways/government help to get back on your feet in the UK that still don't really exist in the USA; and, of course, there's things like government-sponsored healthcare so you don't *need* to be employed just to cover your arse on essential things like that.
Just my $0.02/£0.01 (rounding up)
Simon.
Physicists get Hadrons!
Like most Americans you seem to focus only on wealth as a measure of success. Having been to Europe and America (but being a resident of neither), I much prefer the European model. Sure there's less raw cash, but since when did money buy Happiness?
Whenever there's those OECD comparisons about things that I value: happiness, standard of living, access to health and education, low violent crime etc then North Western Europe along with Australia and New Zealand blitz those things every time.
So if there's one thing Europe shouldn't be doing, it's being more like America.