Comment by hshdhdhj4444
7 months ago
Yeah, because EU software companies were totally destroying the American software industry before the last decade…
The EU’s relatively shrinking GDP has much more to do with their populations growing older and their population size stabilizing, and the relatively tiny amount of migration, than EU digital laws, most of which have been replicated throughout the world.
Additionally, the EU has always had weak financial markets, and the only strong financial center, the city of London, quit the EU and both the EU and the city of London have suffered because of that, with a whole bunch of LSE listed companies moving to New York (including possibly Shell, which would be devastating for London as a financial center).
>The EU’s relatively shrinking GDP has much more to do with their populations growing older
I'm not buying this argument. Same how the US's economy isn't stronger because Americans have more kids because we're not talking about agrarian civilizations here where every pair of hands on the farm ads proportional labor output. In service based economies, a smart person with a wealthy VC behind him can generate the GDP growth of tens of thousands of traditional labor jobs so population growth isn't the bottleneck.
EU economy is weak not because of lack of more kids, but because they have not captured any high growth industries (specifically tech) to generate better jobs and new wealth for future generations of youth. Europe is all old wealth and in the hands of old people. Once the economy becomes a fixed pie with no growth, population growth follows suit. EU economy is weak because after 2008 they went the route of austerity while the US printed it's way out dumping cheap money on fueling economic growth.
If Europeans would hypothetically start having way more kids tomorrow, those kids would end up being even poorer having to share the same fixed pie of limited economic resources. Another argument why more kids != wealthier for Europeans, is a news I read today of another local university graduate who moved his start-up to the US, so what's the point in making more kids if they have no funds to increase the GPD here and they leave? More kids with no comparable growth in money = those kids competing with India or Bangladesh.
Labor is absolutely the bottleneck. You can come up with as many billion dollar ideas as you like, but without people to pay for them, where does the income come from? Economies grown because money flows, it gets invested, and that investment creates income, which goes to the workers and owners, and gets spent again. With fewer people, it doesn't matter how rich some of them get, the entire economy will slow down, because there is nowhere to productively spend that money in that economy -- it flows out.
>Labor is absolutely the bottleneck.
Question: Europe has had an open door migration policy since at least 2015 and taken millions of migrants, especially Italy and Greece. Why haven't all those migrants turned EU's or Italy or Greece's economies into a powerhouse and built US big-tech competitors here? Same question for Canada. When is that magic economic growth from population growth coming?
Answer: Because US invests more money in high growth sectors than EU and Canada combined, and because people aren't fungible cogs in a machine, that you can swap in and out and get the same economic output it's agrarian labor. Attracting the handful of the smartest people in the world with money and resources like the US did, is more important and ads more value to their economy than attracting millions of desperate unskilled laborers like EU and Canada did.
>but without people to pay for them
Yes, people to pay for them, as in billionaire VCs pay for them, not millions of poor uneducated people, those can't even pay their rent without government support let alone boost economy. They aren't gonna boost anything except Amazon fulfillment center and Door dash delivery rates.
So NO, I don't agree with you at all. EU has enough local skilled college educated people since university is free here, but it has no VC money to amplify their labor into economic output as proven how many EU's top minds choose to work for US companies. Adding even more random people to a stagnating economy just means lower wages and bargaining power with higher rents, not more wealth growth per capita. Your comment does not disprove any of this.
3 replies →
> Yeah, because EU software companies were totally destroying the American software industry before the last decade…
In https://news.ycombinator.com/item?id=44553811 I pointed out that in the past a lot (former) successful German software were simply bought out by US-American software companies.
And that will continue, since it’s a reinforcing effect: Just like successful American startups tend to be bought by the big corps, the same happens here. There’s just no behemoth regionally to swallow them.
That's not necessarily true; as the EU had many major players, especially historically: SUSE, Ericsson, Nokia, SAP; all were or are being shredded by US competition despite a domestically entrenched position. Even in 2008, when both economies did badly, the EU and the US had nearly identical GDP figures.
The EU might point to ASML as a point of pride; but that assumes an ASML competitor wouldn't get tens of billions to compete the moment ASML is inconvenient.
ASML (plus Airbus, SAP and Spotify) can't feed 300 million EU workers. Europe needs more than just a point of pride on the entire continent to be an economic powerhouse. Like we say in my country: "a single bloomed flower does not make spring".
2008 was a point where euro was overvalued compared to dollar at 1.60$ after the subprime crises. It's not a significant number.
If my coworkers are anything to judge by, the smart ambitious Europeans are coming to work in tech in the US to seek their fortune.