Comment by bildung
8 months ago
These just compare market cap. As the US economy is disproportionally financialized, that outcome is hardly surprising: This was just measuring market financialization by proxy. I mean two of the largest on the left, Google and Meta, are essentially just ad companies.
Now compare companies by actual revenue:
https://en.wikipedia.org/wiki/List_of_largest_companies_in_E...
https://en.wikipedia.org/wiki/List_of_largest_companies_in_t...
I omitted the 50 years distinction because, unsurprisingly, the companies in the US are younger.
None of these are actually relevant for founders, however, as even in the US you only have a couple dozen large cap companies, but millions of founders.
What is relevant is the share of employers per capita, as that shows us how many founders actually exist.
https://data.worldbank.org/indicator/SL.EMP.MPYR.ZS?most_rec...
https://data.worldbank.org/indicator/SL.EMP.MPYR.ZS?most_rec...
Yes, Europe did have great entrepreneurial culture in the past, but the point of the “founded in the last 50 years” distinction is to measure how things have been going for entrepreneurs who are still alive today.
You can’t call a region a “safe haven for entrepreneurs” if all the globally relevant entrepreneurs from that region are dead from old age.
Remember, Europe has double the population of the US. To lag behind so dramatically in the last 50 years is absolutely something to be concerned about.
Having to move the goalposts to the 1850s to make a point about relevant European businesses should be alarming to you.
Your point is well taken, but I think we need to question why Europe declined so significantly as a centre of innovation.
A big part of it is obviously the relative effects of twentieth century wars, both hot and cold. However, we also need to be aware that in recent decades, the US has just offered a better deal for entrepreneurs than Europe. By that I mean it has been a democratic, rule-of-law-based country with relatively easy access to capital and relatively low taxes.
It still has the last two things, of course. But the first two are also essential, long-term, and if they're eroded then the US might stop looking like a better deal.
I agree, but most Americans don't; I suspect we'll see in the coming decade or two, unless the US executes some kind of implausible course correction.
On the one hand, studies have suggested that nearly half of highly successful entrepreneurs/founders in the US are immigrants or children of immigrants. As the US becomes more authoritarian and more corrupt, its easy to imagine people choosing to do their new startup from, say, Berlin.
On the other hand, lots of people choose Singapore, too; rule-of-law-based country with relatively easy access to capital and relatively low taxes — but without actual democracy.
I'm aware of my own inherent bias of wanting democracy to be important to people when making this kind of calculation, but I'm not sure that we have any real evidence of that.
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Lag by what measure? Cities are just better as cities, laws are annoyingly bureaucratic but actually work, your neighbour isn't likely to shoot you dead... The US does better on abstract statistics like GDP, but... GDP is biased in favour of whoever issues the global reserve currency, so that doesn't actually mean a lot unless you are specifically trying to accumulate units of global reserve currency.
These are all logical fallacies and red herrings that have nothing to do with what we're talking about.
If we try to steer the ship back to the topic at hand...here's why we should be concerned that Europe's private sector isn't growing much or innovating much.
It turns out, Europeans entire way of life is funded by taxing the activity of the private sector and redistributing that money to things like healthcare, education, pensions, etc. Innovation (increased productivity) is the only way to reliably grow this pie, and innovation is exclusively the domain of the private sector due to the competitive pressures of markets.
If our private sector is entirely composed of aging industrial-age conglomerates waiting to be disrupted by more dynamic and innovative Chinese competitors (China is rapidly becoming better at the things European industrial companies used to dominate), our entire society is at risk. Militarily, we're sitting ducks, and economically, we are as well.
Modern Europe is economically heading the way of the Soviet Union, with an increasing share of GDP driven via centrally controlled government spending (we're now at over 50% on average in the EU, the Soviets were around 70-85% at peak).
Meanwhile, The Chinese Communist Party has ironically created one of the most dynamic, capitalist systems on the planet. The Chinese supposedly "communist" economy is in fact more market-driven than even the US economy (33% government-driven vs 36% government-driven), and you can see this in the numbers: https://www.imf.org/external/datamapper/exp@FPP/USA/FRA/JPN/...
It doesn't take a Phd to understand that a much larger and more unified population in China, with a more unleashed private sector, is going to eat the lunch of the smaller, disjointed micro-economies in Europe. And this doesn't even factor in the rise of industrial investment in the US in recent years.
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But if that is true, why does the EU actually has almost double the entrepreneurs per capita the US has, as I have linked?
> Having to move the goalposts to the 1850s to make a point about relevant European businesses should be alarming to you.
Please actually have a look at the EU list and click through to the companies. They are all directly linked in Wikipedia. The majority is from the 1980s and younger.
I wasn't convinced of this, so I asked ChatGPT to give me the founding dates of the top 10 companies from the Wikipedia page, with an instruction to track backwards through M&A. Here's the result:
* Volkswagen: Founded on May 28, 1937, as Gesellschaft zur Vorbereitung des Deutschen Volkswagens mbH, later renamed Volkswagenwerk.
* Shell: Formed in April 1907 through the merger of Royal Dutch Petroleum Company (established in 1890) and The "Shell" Transport and Trading Company (founded in 1897).
* TotalEnergies: Established in 1924 as Compagnie Française des Pétroles (CFP).
* Glencore: Originated as Marc Rich + Co AG in 1974.
* BP: Incorporated on April 14, 1909, as the Anglo-Persian Oil Company.
* Stellantis: Formed on January 17, 2021, from the merger of Fiat Chrysler Automobiles and PSA Group. Fiat Chrysler Automobiles was established through the merger of Fiat S.p.A. (founded July 11, 1899) and Chrysler Group LLC (originally Chrysler Corporation, founded June 6, 1925). PSA Group was Established as Peugeot Société Anonyme in 1966, but its roots trace back to Peugeot's original founding in 1810 as a family industrial business.
* BMW: Traces its origins to Bayerische Flugzeugwerke AG, established on March 7, 1916.
* Mercedes-Benz Group: Resulted from the merger of Benz & Cie. (founded in 1883) and Daimler-Motoren-Gesellschaft (founded in 1890) in 1926.
* Électricité de France (EDF): Established in 1946 following the nationalization of France's electricity sector.
* Banco Santander: Founded on May 15, 1857, as Banco de Santander.
We could do the full list and then weight by revenue or something but broadly, I think the point that 'pembrook is making is proven.
As an aside, one feature of LLMs that I genuinely do enjoy is the ability to ask for intern-level research like this.
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