European entrepreneurs: Les misérables

http://www.economist.com/node/21559618

by keiferski • 14 years ago

123 91 14 years ago

tluyben29• 14 years ago

The Economist is overly gloomy about the EU I feel; every week you get pounded by more and more 'this will end badly' stories about the EU.

That said, I do really feel the 'good enough' vibe here in the EU; most people I talk to who have companies (just started or older) have the 'it's good enough this way' attitude. 'We' generally don't want to be billionaires or even have billion Euro companies. Once you are making insane profit margins and have a fat company bank account, all employees are happy, growth is stopped and the goal becomes to sustain that situation. I know great entrepreneurs here who started out with crazy plans; once hitting that point (and that can be any revenue mind you; for some companies it's E10 million/year, for others it's E100 million/year, but rarely more than that) they find it good enough. I think a lot stems from that feeling of not actually wanting to be 'the biggest', just wanting a stable, sustainable company producing profit margins year after year to lick your fingers by.

Edit: read the comments; 500 biggest companies in the world, 132 US, 166 EU and France has more than the UK. Didn't check those things, just copying here for completeness.

octagonal• 14 years ago

It always bothers me when I see listings where Eurozone countries are seen as separate entities. We're not. Our economies and social structures are heavily interdependent on each other and that's only ever going to increase. Regarding Eurozone countries as completely separate states would be akin to thinking of California as a different country.

pdelgallego2• 14 years ago

Unfortunately we are not quite there yet. If we were a more cohesive union, there wouldn't be such a thing as a European debt crisis. We will have Eurobonds, automatic states bailouts, a fiscal union, etc.

It might take another 50 years, but we, eventually, will become a single union. This are interesting times

adunk• 14 years ago

I think the author makes the argument that while Europe once was able to produce huge companies, it produces significantly fewer after WWI. Many of the European companies on the Global Fortune 500 list were founded in late 19th century to early 20th century. Shell (#1) and BP (#4), for example, were founded in 1900 and 1909, respectively.

That said, I agree with the comment about many in Europe generally favoring the "good enough" way over the "home run" way of thinking.

hdivider• 14 years ago

Interesting article, especially the part about the maximum time it takes for bankruptees to be freed from debt (makes you feel sorry for entrepreneurs in France who have to go into debt to start their business).

I think a lot of this stuff is due to the attitude of the general population towards entrepreneurs. If the only question that matters to people is "Have you made any revenue yet?" there's probably not much hope for Europe ever catching up with the US in terms of new fast-growing tech businesses.

(I'm hoping the UK is something of an exception, but I'm not really sure. Lots of people here are still very sceptical or pessimistic about new tech companies, especially very small, innovative ones.)

tluyben29• 14 years ago

I'm not sure that bankruptcy is not an exception rather than rule. The cases I have seen in the EU where 'done' after the court case. Which didn't take long at all. But it is true that it is a stigma; to US entrepreneurs if you tell you have a bankruptcy it means you tried, in the EU it means you failed.

mddw• 14 years ago

I don't know about the UK or the US, but in France, Bankruptcy don't always mean paying your company's debts. Small business often start as "limited responsability companies", where you can only loss your capital.

qwertzlcoatl• 14 years ago

2011 growth rates for the US: 1.5% UK: 1.1% EU: 1.6%.[1] Now the EU is more than the eurozone, but with the UK dragging down the non eurozone component, I can only imagine that euro-nations averaged above the 1.6% EU wide average and so outperformed the UK and US by a large margin (more than the 0.2%ppt margin of error anyway).

[1] http://en.wikipedia.org/wiki/List_of_countries_by_real_GDP_g...

Retric• 14 years ago

Subtract the population growth rate and EU looks even better. Population growth rate EU 0.212% vs. US 0.97%.

Economic growth per person US = .5%, EU 1.4%.

gaius3• 14 years ago

The averages can hide all sorts of things. Without the mighty German industrial powerhouse, how do things stand?

jd• 14 years ago

In the Eurozone real GDP has contracted since the crisis according to this graph:

http://krugman.blogs.nytimes.com/2012/09/25/more-coulda-been...

So a lot of the "growth" is just the economy recovering from the austerity/crisis-related policies. The Eurozone's real GDP contracted 5%, so even if we then outgrow the US by 0.5% every year it will still take us ages to catch up.

raverbashing2• 14 years ago

Well, it's a lot of factors (I am currently in an European country, YMMV between them)

- Lack of "drive". Young people mostly want to find a nice job and that's it. In my perception this is less in France, where people may want to "kick ass" more (historical pride maybe) and maybe in the UK or Germany

- People are 'naive', and by that I mean the sentiment "this is the way it is, don't bother changing". Since everything pretty much works, it's difficult to see faults (or maybe faults enough to motivate a change)

- People in Europe need more hand-holding. They are usually more theoretical as well instead of "go there and do it", something is much stronger in the American continent (which goes from Canada all the way to Uruguai/Argentina/Chile in the south)

- Labor laws, difficulty in getting talent outside of the EU (depends on the country really - still, usually easier than getting an H1B)

Also, every country has its quirks: French cannot speak english to save their lives (usually)

In the end, Europe has a lot of opportunities, they have only to think outside of the box. But don't be so quick to count them out, they have literally thousands of years of experience.

brador• 14 years ago

> Since everything pretty much works, it's difficult to see faults (or maybe faults enough to motivate a change)

This is an interesting angle.

Are less well developed countries better for entrepreneurs? More holes to fill? Anyone have anecdotal evidence either way?

herval• 14 years ago

European countries are as full of things that don't work as third world ones. I lived in switzerland, for instance, and found it astonishing how things that "simply worked" back home (a developing country) were still badly implemented there. Paying rent and tracking mail packages are two examples I still remember didn't work well/could be heavily improved...

There are holes to fill everywhere.

bergie• 14 years ago

Lack of "drive". Young people mostly want to find a nice job and that's it.

what most people don't realize is that the time of uninterrupted careers and job security is over, and so even if you want to be just an employee, you're still essentially an entrepreneur. You'll still have to do constant R&D to keep your products (job skills) current, and do sales to get the next job.

This way you may not have to invest into things and get into debts beyond typical mortgages or car loans, but you'll also lack the potential upside of being in business for yourself.

tluyben29• 14 years ago

Yes, that's very true. For most people at least. The previous generation here in the EU, had this notion of a 'permanent job', which was an iron-clad, for life, contract. State guaranteed. You could be folding paper planes all day and sit counting your pencils. Again. And still nothing happened. This was quite common. I know a lot of people, especially in PT/ES who are in trouble with their parents; they want to take risks while their parents tell them to get this cushy job for life (which doesn't exist anymore). It's a real pain to convince people that this was a crazy notion (and poisonous!) in the first place.

raverbashing2• 14 years ago

I agree, there are no more cushy jobs, or at least, not in the amount it existed once.

But the constant renewing of abilities is more a characteristic of IT. In the majority of professions this is much less pronounced

pmjordan4• 14 years ago

I think part of the problem is that job security is still drilled into everyone's heads: older, educated European parents are quasi-unfireable at this point (having been hired on old-style contracts with ridiculously favourable terms), and even young teachers are typically state employees with exceptionally high job security and exceptionally low competition - my sister is studying to be a teacher in Austria, and she already knows what her salary will be when she starts work in 3 years' time. And these are the only adults with whom young people spend any significant amount of time.

Meanwhile, in industry, there are jobs available, but often not as actual employees. Companies will bend over backwards to hire young people on a "permanently temporary" basis, i.e. perpetual, full-time, single-client freelancers. Legally, this tends to be a very grey area, but if you complain they'll obviously just not renew your contract. So nobody does.

The decrease in job security is probably also contributing to the "brain drain": if salaries are higher elsewhere, and there's no longer a security advantage to staying at home, then why not move?

lifeisstillgood4• 14 years ago

On a slight tangent, but the Economist ought to know better than to lump spotify, Skype and wonga.com together. Wonga lends short-term cash to desperate families at an APR of 4,500 % (yes, four thousand).

Come on Economist, money lending at rates the Kray twins used to do is not an indicator of a functioning entrepreneurial society

Other than that usual Economist quality

gaius3• 14 years ago

Not that I am defending predatory practices, but you have to put things in perspective. Firstly check out Wonga's advertising - they're an iPhone app. People who can afford luxury smartphones are not "desperate families". That is why it makes sense to lump them in with other dotcommy companies.

Secondly, if a week before payday I lend you fifty quid, and you pay me back and buy me a pint to say thanks when you get paid, that's a higher "APR" than Wonga charges, because APR is meaningless for any loan of less than a year.

lifeisstillgood4• 14 years ago

Website, iPhone app does not matter - desperate does not mean low income, desperate means insufficient income.

A quick look at their site - if I borrow 400 quid today and pay it back in one month (seems short term to me) I pay back 159 quid extra ontop of 400!!

And with all due respect I borrow 50 and pay it back a week later costs 9.50, so if you don't mind I am not going drinking at your pub. :-)

_delirium5• 14 years ago

Isn't talking about "European" entrepreneurs a bit generalizing? There are some similarities, but many more differences. The article itself even seems to hint at it, but not note it explicitly: in a graph labeled "life sentences", purporting to show how long it takes for "European" entrepreneurs to be free of debt, the bar for Denmark is so small that you can barely see it. Maybe they mean primarily French & German entrepreneurs?

As an American living in Denmark, I would personally prefer to bootstrap a business here rather than in the U.S., though it does depend on what kind of business. The main advantage to doing it here, imo, is that the healthcare story is solved, though maybe that'll be better in the U.S. after PPACA comes into effect in 2014. Another plus is better government support for small businesses: grants are available, and you can get some cheap early part-time employees by participating in subsidized internship programs intended to "upskill" people on unemployment. The main downside is high wages (though that matters less in tech, where wages are very high in the US, too), less access to venture capital if you're going the non-bootstrapping route, and some general problems from not being in the U.S. (less media visibility, problems with payment gateways, etc.).

jessriedel2• 14 years ago

> The article itself even seems to hint at it, but not note it explicitly: in a graph labeled "life sentences", purporting to show how long it takes for "European" entrepreneurs to be free of debt, the bar for Denmark is so small that you can barely see it. Maybe they mean primarily French & German entrepreneurs?

It says the average time to discharge debt in the US is less than a year, so that the vast majority of Europe (by number of countries and by population) takes much longer. The existence of a pocket of 5 million people in Denmark (basically a large city) where it is less hardly diminishes the generalization.

> The main advantage to doing it here, imo, is that the healthcare story is solved, though maybe that'll be better in the U.S. after PPACA comes into effect in 2014.

This comment sounds more motivated by politics than the actual business of start-ups. Healthcare is a significant cost for businesses in the US, but the difficulty of providing insurance for employees is hardly even discussed here around HN as an important consideration for start-ups, compared to, say, finding capital, good managers, compensation schemes, entrepreneurial spirit, government regulation, and so on.

_delirium5• 14 years ago

> the difficulty of providing insurance for employees is hardly even discussed here around HN

That's not my impression of HN! It comes up fairly regularly, and is cited as a problem by a number of startup founders. Among others, tptacek has mentioned in a few threads that providing founders/employees with healthcare is a significant problem for early-stage, small companies, especially for bootstrappers, and for people trying to freelance (it becomes easier if you're large-ish, where you can negotiate a group plan).

I suppose it's a political comment in the sense that anything in this space is political, but my personal interest is just in somehow being able to work for myself while also having health coverage. I'd like to move back to the US at some point for cultural/family reasons, and the problems with the individual-insurance market are one of the things holding me back at the moment. I hardly care which kinds of politics fix that problem, as long as a fix of some kind appears...

itmag• 14 years ago

As an American living in Denmark

How did that happen?

Also, would love to meet up.

pliny• 14 years ago

He probably didn't swim there.

mixmax• 14 years ago

same here. since I'm from Copenhagen.

May e-mail is in my profile in case you, or anyone else from the Copenhagen area, wants to have coffee.

draggnar• 14 years ago

i just moved to cph; i'm always up for grabbing coffee

tluyben29• 14 years ago

"grants are available, and you can get some cheap early part-time employees by participating in subsidized internship programs intended to "upskill" people on unemployment" => but be careful there; most government money is not handed as money but as less/no (income) taxes. For instance I can get E40k money from the government if I start up a company, but that E40k is money I don't have to pay as income tax. That's great, except if you don't have the money to pay income in the first place. There are money grants but, in my experience, most connected with tax which are worthless if you cannot or do not pay the money over which that tax has to be paid in the first place...

_delirium5• 14 years ago

There are some cash grants available, though perhaps more in some areas than others. I'm thinking of smallish grants targeting bootstrapping companies, stuff in the €25,000-€100,000 range. A friend starting a videogame-development company has gotten grants from both the Danish Film Institute, and the Nordic Game Program, for example, just paid out in cash.

digitalWestie3• 14 years ago

What a breath of fresh air after reading the same old simplistic crap: "Europe is too socialist".

ramblerman• 14 years ago

Combined with lax immigration, it certainly is. I'm from Belgium, and I would never give up healthcare, education or basic benefits. But The pendulum has swung too far.

In the US, Denmark is often taken as the perfect example of socialism done right. But people leave out 2 very important factors:

- Denmark has an abundance of national oil reserves, and exploited them very cleverly. (This is a big advantage to less fortunate nations)

- Denmark is much stricter (smarter) when it comes to taking in immigrants than France/Benelux

mikkom• 14 years ago

> As an American living in Denmark, I would personally prefer to bootstrap a business here rather than in the U.S., though it does depend on what kind of business. The main advantage to doing it here, imo, is that the healthcare story is solved

I'm finn and I would definitely want to start a business in US rather than in europe (or in finland), the advantages are enormous - much better access to funding and very large homogenous potential customer pool being the 2 most important issues.

lifeisstillgood4• 14 years ago

Ok, this is my favourite rant subject (pace wonga.com).

It's the welfare state and related systems. But not a Ron Paul style get rid of the lot, we should recognise that unemployment and welfare payments make a huge amount of short term sense. We do not want a skilled worker made redundant to lose house and family becaause it takes three months to find a job.

But we should look carefully at long term welfare payments (long term unemployment, chronic disability and especially retirement). Just when we should change the expectation from how many jobs did you apply for, to how many customers did you advertise to is important not only for an entrepreneurial society, but a sane and fair one.

Look for work for three months, then look to create a company, and welfare will support you.

Most importantly I would change the focus for those under 24, whose first encounter with welfare (pretty much all school leavers and graduates in this climate it seems) should be a positive creative experience, not a dismal on the scrap heap one

_delirium5• 14 years ago

There are some aspects of Denmark's system re: your last point that I think other European countries could benefit from. However, it's still quite poor when it comes to providing a way for starting a business to be recognized as an alternative exit from unemployment.

The good parts are a general vibe that the unemployment system is less about welfare, and more about matchmaking. One structural help is that it's run quasi-independently by several non-governmental (though state-subsidized) organizations. Each of these organizations, an "a-kasse", focuses on different areas. For example, I'm a member of one that focuses on researchers. This means they can provide more specific advice to my situation, and also means they develop relationships with both sides of the unemployment puzzle: companies in relevant areas will come to them looking for talent, and the a-kasse will try to connect unemployed people with seeking companies. So they see themselves not only as an unemployment agency, but also as a recruiter to some extent. If you can't find a researcher specializing in data mining, for example, you might go to the researcher "a-kasse" and ask them if they can hook you up with one. This also makes the a-kasse much more informed about what the job market in their area looks like, which in turn guides their educational programs.

Initially it's fairly self-serve, with an assumption of good faith that you're just temporarily unemployed and doing your best to fix the problem; there are offices where you can get assistance, or you can get it online, with things like resumes or job listings. Then, if you're still unemployed after some time, it becomes more mandatory, where you have to go in regularly, so they can try to debug why you're still unemployed, and what could be done to fix the problem. That might include assistance finding/applying for jobs, taking training courses, or other things.

Past that, if the problem is lack of demonstrable skills or work experience, there's a quasi-paid internship program: a company will "hire" you for 3-6 months, but you remain on unemployment, so are almost free to the company, but they do have to pay your pension contribution (this gives the intern a modest financial benefit, but mostly serves to make sure the company takes it at least a little seriously, since the intern isn't 100% free). The hope is that that will turn into a regular job, or at least gain you enough skills/experience to get a similar job elsewhere.

If all that fails, after some years, then it becomes more like a regular welfare system, but this up-to-2-years "a-kasse" system is much more geared towards assistance/adaptation/upskilling.

pdelgallego2• 14 years ago

In DK you also have the Kontanthjælp, that used to be the last line of the welfare system.

lifeisstillgood4• 14 years ago

There are indications that is where UK system is trying to go, but there is a huge weight of baggage - everything from pointless stories about 14 children families living in million pound mansions and sponging off the state to reluctance to deal with structural geographic issues (frankly if you are under 25 move to London to get a job, there is nothing anywhere else for a certain value of nothing)

Sounds interesting approach though.

ExpiredLink2• 14 years ago

USD:EUR = 1:1,2859 (today)

I laugh at the media-fabricated 'Euro crisis' and the 'Economist'.

Ygg2• 14 years ago

Wasn't euro always higher rated than dolar? Anyway overall I don't think the crisis is over yet, some sources (can't remember which ones) indicate that there is a slight chance of the economic crisis entering a second cycle devastating US/Euro again.

kalms2• 14 years ago

Agreed. Also, look to China. I can't see how they can keep up their "economic miracle" for much longer.

You can only build so many empty cities. Or one would think.

ExpiredLink2• 14 years ago

> Wasn't euro always higher rated than dolar?

No.

BTW, sorry but "There Is No 'Euro Crisis'" http://online.wsj.com/article/SB1000087239639044446430457753...

martinced• 14 years ago

/rant on

I don't agree that the various EU governments are starting to "get it". It's the entire contrary for a lot of countries.

There are very, very few, say, EU success software stories (SAP! Yeah. German. Not french). And it's not just software and that is for a very good reason.

In some countries like France and all the other socialo-communist EU countries people are not just looking with a very bad eye entrepreneurs who failed: they're also and, most importantly, developing a hatred of people who work hard and a hatred for the fruit of hardwork (they hate both success and money, success and money being related but not identical).

So there's this entire mindset which is ruining, for example, the France economy and it's ruining it fast. Rich people are leaving the country (Belgium, Switzerland and the U.S. all being destinations now seeing more and more rich french persons coming).

The unions here are way too strong and SMEs and independents are seen as people you should milk as much as you can.

And for those who "succeed", don't you dare to buy a Porsche because you'll then be seen as an "ennemy of the (socialo-communist) state".

Honestly it is sad but France is deserving what it is getting now: recession, SMEs going bankrupt, big companies delocalizing, rich people fleeing, they're debt skyrocketing (91% of the GDP), the GDP that shall fall (0% Q2 growth and now a recession that shall start), the loss of its status as the world's fifth biggest power (should be in 6th place by the end of Hollande's mandate).

Socialo-communist countries spreading the hate of succesful people can only go one way: mediocrity.

France and it's crazy wellfare system is going the way Greece and Spain went. This is only the beginning of the eurocrisis and it shall get uglier by the day. Unemployment is going to skyrocket. In the end debt shall need to be monetized and we'll see a massive drop in the value of the euro.

Because what we're seeing now is a joke compared to what is coming: how is France going to save its sinking economy without investors, without entrepreneurs and without people willing to work?

Want an example as to how crazy the socialo-communists are in a lot of European countries? In Spain in 5 years 210 000 SMEs went bankrupt. Unemployment is sky-high and Spain is probably going to default (it's debt is "low" compared to its GDP but its GDP is falling and its debt is taking +9% per year... It's only a matter of time before Spain becomes the new Greece). So 210 000 SMEs bankrupt: can you imagine how many people previously unemployed are now without a job? And you know what the public servants do? Public servants who have a friggin' job working for the state do protest in the street because they had a 3% cut on their salary.

A 3% cut and they protest in the street. While a lot of people who previously had job working in the private sector don't even have a job anymore.

That is why all these socialo-communist state are fcked. It's over for them. The "sense of entitlement" of the people working for the state is way too important and the part of the state in the economy of these socialo-communist countries is way too important too. There is no way out.

And that is just today... What about tomorrow?

Well, entrepreneurs are way less prone to create a gig in France (or in Spain). They're moving to greener pasture. I've got friends who created companies in the U.S. (SoCal) and in Asia (Tokyo). Why would they stay here in France?

Why would I* stay? You see, now I may be pitching soon: I'm frequenting the local "startup" scene but I already have contacts outside Europe. I'm (of course) willing to move: should I succeed in France I'd be not only milked like a cow to pay for the 56% of the french economy that is directly directed by the state (that number only went up and up: France shall soon default, just like Greece, it's only a matter of time) but I'd also be regarded as a greedy rich bastard responsible for some perceived slavery (which, ironically, is of course the fault of the socialo-communist state and the way-too-greedy state system).

If you live in the U.S. I'd seriously have you consider to not vote for Obama: the public debt of your country never exploded as much than after five years of Obama. That wellfare system and the sense of entitlement it creates shall lead to a socialist country. This has always been the plan of leftists: create a gigantic number of state jobs and promise more and more wellfare, to make sure to get reelected. Once you're too entrenched into socialism the only way out is default.

And then once the nany state defaults you'll get tyranny.

Oh, sure, for a few years your shiny healthcare system shall look nice. And then the discfonctional system shall be hidden under more and more debt.

And then you'll default, just like Greece. Just like Spain is going to. Just like France is going to.

It's not that I'm not a good person. It's not that I wouldn't want everybody to get a good healthcare system. But the only thing socialism leads to is poverty for everyone, besides the leaders. Don't forget where you're coming from and what made your country so great.

F*ck socialism.

/rant off

fatbird• 14 years ago

France and all the other socialo-communist EU countries

FYI, this is where you lost me.

anonymouz2• 14 years ago

No matter how often you call western European countries "socialo-communist", they have never been anywhere close to communist, and lately have been reducing all kinds of social benefits, going more towards the "totally free market" (with questionable outcomes...).

But I'm sure you'll find a "socio-communist" reason for e.g. the Spanish real estate bubble. Silly communists and their real estate speculation!

flexie• 14 years ago

I don't know about all this Euro bashing. I believe America is dominant in entrepreneurship mainly because of the language. Other factors are the huge home market and the few public sector jobs.

I've been starting businesses in two very different European countries, and lived in a third, just like I've been living in America. And I certainly don't believe America is equipped with better laws for entrepreneurs or with a more risk encouraging mentality.

pmjordan4• 14 years ago

I get the impression that America's public sector is anything but small. Sure, the spending is distributed differently, but it's still colossal.

And I certainly don't believe America is equipped with [...] with a more risk encouraging mentality.

While this is certainly not true for all of Europe, I grew up in Austria, and when I visit, I'm struck by the total apathy towards entrepreneurialism, especially amongst the younger generation. There are of course exceptions, and they tend to congregate, so you notice them more. But the vast masses still seem to believe in the "cushy job for life", despite most of my classmates from school not having found it, 10 years after finishing high school. They find it completely unfathomable why you could possibly want to start a company.

VeejayRampay• 14 years ago

Europe provides more of a safety net for poor and lower middle-class people than more dynamic economies.

It's all a matter of choice: do you want REALLY good conditions for the top 10% or decent conditions for everyone?

Economies like China, the USA or Canada favor the former, lots of European countries the latter.

pg• 14 years ago

This chart makes it clear how big the difference is: http://bit.ly/Qcrv3R

kmfrk• 14 years ago

As a European, that's a seriously depressing chart.

I guess I can try comforting myself by stating that it says "In Europe", not "by Europeans". :)

Ra1d3n• 14 years ago

Well maybe europeans make good midsize companies?

fforw• 14 years ago

Here in Germany that would be http://en.wikipedia.org/wiki/Mittelstand, SMEs that are the major backbone of German economy.

digitalWestie3• 14 years ago

exactly, what's wrong with midsize companies?

cperciva2• 14 years ago

That chart is dramatic, but I'm not convinced that I know what it implies. There are few large young European companies right now; but this doesn't necessarily mean that European companies are less successful, or fewer of them are founded. It just means that they grow more slowly.

I'm sure the US has more people who decide to "roll the dice" and rapildly end up either spectacularly successful or spectacularly flaming out; I've seen far less evidence that there's anything wrong with a culture where slower but more consistent growth is rewarded.

The graph we really need is not "number of big companies founded at given dates" but rather "number of companies which will ultimately become big founded at given dates".

pmjordan4• 14 years ago

One immediate issue I see with slow-growth companies is that if all companies grow slowly, that puts a cap on the maximum growth of the overall economy.

The other thing we in the software world mustn't forget is that we have marginal costs of approximately zero (or should I say picodollars?), which makes smaller companies disproportionally more competitive. The only advantage of being big in software is bigger leverage (which is usually in direct competition with agility) whereas elsewhere economies of scale are pronounced.

And regarding "number of companies which will ultimately become big founded at given dates":

I'd love to see some numbers on companies that are big but got there slowly. I suspect it doesn't happen, leaving aside artificially competition-stifled markets such as state-blessed monopolies. Given the nature of exponential growth, I'd be surprised if any of those Global Fortune 500 had no period of fast growth.

Slow growth is also likely to be correlated to inability to react to disruption. So companies in <high-growth country> would necessarily out-compete companies in <steady-growth country> in a free, globalised market economy.

confluence• 14 years ago

Looks counter cyclical - as US rises, Euro falls and vice versa. The Euro zone is in the same situation the US was during the 1900s. I wouldn't write off the europeans just yet.

davedx• 14 years ago

"For the €1.5m-4m that firms need to work an idea up into a real business model, though, money is in desperately short supply."

I stopped reading there. I must be living on another planet entirely from whoever wrote this article.

zerostar072• 14 years ago

It's not stressed enough but regulations of markets are one great, if not the major factor. Companies like Airbnb or Uber wouldn't even get a start in Europe or their owners would be arrested.

sbierwagen• 14 years ago

1.) The Economist is always going to be anti-regulation. They're a neoliberal magazine: repealing laws is the point of the paper.

2.) Even if the EU abolished their unemployment insurance programs and made labor unions illegal, you'd still see startups moving to SF, just for the network effects. The legal system isn't the only factor in producing startups. PG wrote a essay about this.

tici_88• 14 years ago

The article makes the mistake of talking about France and Germany and maybe Spain and then of generalizing it to mean "Europe". There are in fact lots of other countries in Europe, 30+ or so in the EU alone where the reality can be very different than France and Germany. Many European countries have flat taxes (Russia, Bulgaria, Romania, Macedonia, etc), hiring and firing is at will like in the US, low to no capital gains taxes, etc. Some provide lots of government incentives, loans and capital, Denmanrk and some of the other Scandinavian countries come to mind here.

Europe is a big continent and taking Germany and France and extrapolating it to the rest of Europe doesn't always work.

30092012• 14 years ago

As usual, Norway is the exception: http://www.inc.com/magazine/20110201/in-norway-start-ups-say...

European entrepreneurs: Les misérables

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