This is a classic example of "if only more people would be like us, the world would be better!". Sure enough, the experts are all entrepreneurs and investors.
Well, in this particular case, they may very well be right. But things like this really bother me: "traditional engineering-driven approach to business, with its emphasis on perfection, longevity, pride in ingenuity and culture of deep-thinking put the country at a competitive disadvantage in the fast-moving new economy". Really ? That's all he had to say about what made Germany an economic powerhouse on par only with Japan ? Oh, what we need then are more social media experts, I'm sure, to drive value creation through synergistic customer discovery. I'm pretty sure he's beating on a strawman here.
Also, the last piece of candy: 'The so called “poor countries,” such as Brazil, have this hunger. They are going to catch up on us.'
> Also, the last piece of candy: 'The so called “poor countries,” such as Brazil, have this hunger. They are going to catch up on us.'
Disclosure: I am Brazilian.
They might, but it will take much longer than anyone expects. The truth is that Europe has a lot of advantages when compared to countries like Brazil, India, etc.
1) Working institutions, including the rule of the law. Don't get me started about the ineptitude and incompetence of Brazilian police and courts.
2) A notion of what good governance means, at least outside of Italy and the PIGS. Patronage is so widespread and accepted here that this word doesn't even have a direct translation.
3) Culture and I don't mean classical erudition, but basic literacy.
4) A working credit industry. Only farmers and people with connections in the government can get easy credit in here. For all others the interest rates are a rip-off.
Also, few people realize that some of the problems Europe has (decreasing population) are already arriving here; so it is possible that we get old before we get rich.
Americans don't like to talk about it, but they should better learn how emulate Europe rather than the opposite. The USA is nowadays more similar to Europe than to new developing economies. While Europe hasn't the high growth it once had, they know how to maintain an economy that retains prosperity for most of its people.
When I visit family and friends in the old country, I always find people's attitude depressing. There is a universal sense of dependence on the state, stemming largely from the fact that over 20% of the population is employed directly by the government, but also from a widespread sense of entitlement to welfare and other support.
The state is the source of and solution to all of their problems, and this interferes with their willingness to depend on each-other for support. People will much more readily look to the state for the answers to their problems than to themselves or their peers.
I can only take such an attitude in small doses before I have to leave and breathe some fresh air of freedom and self-determination back stateside. I appreciate the sense of community and interdependence that comes from the state taking a back seat in people's lives. If we have a problem, then the answer is often to address it ourselves rather than petition the state for a solution. Chances are we're not the only ones to feel that way, and help from our peers will materialize from the bottom up.
I don't have numbers on full/part-time work of government employees so I'm using the basis that $53K average salary[1] implies that nearly most are full-time, given that the average income overall is about that amount (edit: wow, it's totally not[4]).
Some more information. The average hourly wage for full-time employees is $24.72 across the entire population [2]. The same data shows that the average hourly wage for both part-time (25 and older) and full time is $24.89. This is not apples to apples, just giving you some expectation on what you can expect for a professional workforce that works both part-time and full-time.
Assuming, then, that full time is 2000 hours (40hrs/week*50weeks), the average hourly wage for part-time and full-time government employees works out to $26.55 [3].
So based on that information, I am comfortable saying that an insignificant number of government employees are part-time or they are excessively overpaid.
Further, I am then comfortable saying that 27% of the Canadian full-time workforce works directly for the government.
I'm not anti/pro america/europe. I'm also not very good at geography, but are you talking about the same Europe as I think you are? Are you suggesting that Europe, as a whole, is an economic model to follow right now? Or when you say Europe do you really just mean Germany ?
In the global race to have the worst economy, Europe (as a whole) currently has a significant edge over the US, although the US is certainly running the race with gusto. There's serious talk of having to break the EU up over the economic crisis it is having. The traditional "US should be more like Europe" rhetoric should be packed away in storage for a while, conditions are not ripe for it.
Most of the European problems right now are problems that the US just plain cannot have -- Greece, Spain and Italy running up huge debts because they have the credibility of the eurozone without any of the responsibility.
America's different, we're one country.
Those problems aside, we could do a lot worse than modeling europe, way less gas usage, higher health insurance coverage, 2 months of vacation a year. Sounds a lot more stable to me.
> Those problems aside, we could do a lot worse than modeling europe, way less gas usage, higher health insurance coverage, 2 months of vacation a year. Sounds a lot more stable to me.
And roughly half the gdp/person of the US.
The US govt already collects about as much (per person) in taxes as European govts. (It collects significantly more than Canada and, iirc, slightly less than France.) Yet, no one would seriously argue that we get anywhere near the same level of benefit for that spending.
As long as the US govt is that inefficient, it's absurd to suggest giving it more money.
We should copy some stuff from their tax code, too. As you said, they're not collecting significantly more than us, they just have a way simpler rate. Netherlands was explained to me as "25% up to 100k, 50% on income over that". That's fair, simple and actually a lower rate for the vast majority of people. Our system is a bloated mess in comparison.
Not saying that automatically everything done by Europe is better than everything done in the US.. but mindless rah rah just leads to myopia. Let's steal good ideas where we can.
> We should copy some stuff from their tax code, too. As you said, they're not collecting significantly more than us, they just have a way simpler rate.
Actually, I didn't say anything about how taxes are collected.
However, I will point out that even when the US had significantly higher rates, the feds never managed to collect more than 22% of GDP in taxes and even those two years were "unstable", in that folks adjusted their behavior.
The sustainable maximum appears to be around 21%, and even that isn't possible during a recession.
> Netherlands was explained to me as "25% up to 100k, 50% on income over that". That's fair, simple and actually a lower rate for the vast majority of people.
No, it's not a lower rate for "the vast majority". It's actually a significantly higher rate for the vast majority.
Most employed folks in the US don't pay income taxes. They pay SS, which has very progressive payback, so it's actually a good "investment" for folks who don't pay income taxes. They also pay medicare, but again, their benefits outweigh their costs.
So, 25% (up to 100k) would be a huge increase for most Americans. 50% is higher than the current highest marginal rate, so anyone paying it would also see an increase.
I don't remember where the 30% bracket kicks in, but if it's less than 100k, maybe there are some folks who'd pay less under your scheme, but they're not anywhere near a majority.
> Let's steal good ideas where we can.
I agree, but until we "steal" the good ideas related to efficient govt spending, better taxation is a disaster.
Yeah, you played the old familiar canard of "I'm going to advocate for the government to do things less efficiently and then bitch about how inefficient they are". Par for the course for republicans.
Personally, I'd be in favor of a simplified tax rate with a flat/progressive system that doesn't have an encyclopedia built into it. You might be in favor of a slightly different version of that non-encyclopedia but we're basically on the same side. Rush Limbaugh is trying to divide us -- who's side is he on?
EDIT: btw, most people with under 100k of income in the US pay significantly more than 25%, closer to 40%. Do you think they should pay more? Or less?
> Yeah, you played the old familiar canard of "I'm going to advocate for the government to do things less efficiently and then bitch about how inefficient they are".
No, I didn't. I wrote that the US govt should be more efficient.
> btw, most people with under 100k of income in the US pay significantly more than 25%, closer to 40%.
That's not true. See http://www.taxbrackets2011.com/ . Singles with AGIs between $83-173k pay 28% marginal. The 25% bracket (for singles) starts at $34k.
No, you don't get to count SS. As I explained, SS is a forced savings plan with a rather good return for folks who don't max out, which happens over $100k. (They're subsidized by folks who do max out.) You can argue medicare, but it's <4%.
What? Of course SS and Medicare count. They're taxes. Europeans get pension plans too, and they have universal healthcare, and those services are included in the taxes that europeans pay.
You just argued "If I take the tax rate, and subtract 15%, I get 28%". That's ridiculous.
And, nobody in SS is subsidized by anyone -- those who max out don't pay any more beyond the max.
> What? Of course SS and Medicare count. They're taxes.
I pay the City of San Jose for garbage services - is that a tax? Of course not.
SS isn't a tax because the benefits are (roughly) in proportion to what you pay?
> And, nobody in SS is subsidized by anyone -- those who max out don't pay any more beyond the max.
Do you really misunderstand this or are you just being annoying?
For low-income/low-contribution folks, the ROI for their SS "contributions" is positive. The ROI for high-income/high-contribution folks is negative. The positive return for the low-income folks is the money that the high-income folks lose.
On the off-chance that you think that SS problems can be solved by removing the cap, I'll explain why SS advocates introduced it. They wanted a system that had popular support and didn't encourage organized opposition. For popular support, they wanted to cap payouts. To avoid organized opposition, they wanted roughly proportional payouts.
If you want uncapped contributions, do you want uncapped payouts? If so, you get to explain why Ross Perot gets $300k/year. If not, you get to defend a program that is a significant tax on folks who are very good at fighting taxes.
Ok, well go do some accounting on the dutch government, figure what % of their tax take goes to pensions and medical stuff, deduct that from their tax take and you can get back to me with an apples-to-apples comparison. Since those aren't really taxes.
I didn't say anything about uncapping SS. And I know my history, thanks.
You should be comparing government revenue as percentage of GDP. The US collects 30% less than Canada using this measure (about 24% of GDP vs 31% of GDP for Canada). European nations come in at even higher.
Most of the European problems right now are problems that the US just plain cannot have -- Greece, Spain and Italy running up huge debts because they have the credibility of the eurozone without any of the responsibility.
Right, and America hasn't been running up huge debts with the credibility of being the US and having the world's reserve currency?
I don't understand how higher health insurance coverage, 2 months of vacation, and less gas usage equates to a healthy economy, or maybe I'm missing something?
Higher/cheaper/universal healthcare and less gas usage definitely lead to a healthier economy.
Ever seen the numbers on how much of your car's sticker price paid for health insurance? If we spent less on the health insurance, we'd be more efficient, right?
How much money we shipping straight to Saudi Arabia in gas usage? If we could get the same stuff done on less gas, that'd be more efficient, right?
There is talk of breaking up the EU because the bad countries are bankrupting the ones that are doing really well. When everyone notices that the producers and the problem countries are the usual suspects, of course the conclusion is that maybe this agreement wasn't such a good idea after all.
When I was growing up in Germany I remember hearing this exact same complaint about lack of entrepreneurship a good 30 years ago. My dad, who is a solid state physicist, was a kind of cheerleader for modern technology and was exasperated how companies were not adopting and adapting more quickly. His predictions that the economy was going to go down the tubes while the rest of the world pulled away still ring in my ears.
Yet here we are and looking around my neighborhood in Oregon I see VWs, Audi's, Mercedes and Porsches, our dishwasher is a Bosch and any serious Oregonian owns a Stihl chainsaw.
While I agree that a shocking number of young Germans (and likely other Europeans) are looking for the security of a "Beamter" (civil servant) job, there are definite pros to the German system and I think to keep the balance maybe it's not so bad we have countries with different systems.
Here in the USA almost everyone is an amateur at almost everything we do and that breeds excellence from a few but also a lot of shoddy work. In Germany it's the opposite, the general skill level in industry, science and even culture is relatively high but there are few international standouts.
I think software and software entrepreneurship is particularly well suited to the American system.
Interestingly, in my work as an embedded systems engineer there are a lot of German companies offering development tools (Keil and Hitex come to mind) and other specialty hardware. Not everyone has to develop the next Groupon or Facebook, there are a lot of other possibilities.
I am reminded of the concept of differential advantage. It's OK for the US to be entrepreneurial and for Germany to have a lot of craft-focused artisans who can take technology and refine it unto the nth degree. The world is richer for having the both.
It's part of the reason I think a lot of people over the decades(/centuries) who call for the US to be more a clone of Europe are calling for a really bad idea; it's more than just OK for there to actually be different types of countries, but they actually support each other and make each side wealthier. Diversity, real diversity involving significant differences, is good.
This American mentality of "the big entrepreneurial idea" that produces some millionaires is why we have such a lousy unemployment rate and low skill workforce compared to Japan and Germany, not to mention huge trade deficits. The problem is that the first generation idea stuff isn't where the jobs and long term money are. The long term social benefits and sustainable jobs are in perfecting and iterating products and production methods.
Not only do we buy Stihl chainsaws, etc, but Germans have excellent social services, (I think) the basic level of human capital (education, politeness, etc) is much higher, and it is really safe. And it isn't like lots of Americans aren't looking for safe/ boring/ long term/ moderate payoff jobs either.
To talk briefly about one item here, embedded systems dev kits;
They strike me as a ludicrous 'pay to play' scheme. The old standard is that you have to buy a $2500 dev kit for every developers, and that standard has kept the individuals and enthusiasts out. OEM's ought have full design files for multiple reference board available, and sell implementations for something like cost.
Much of this trenchant multi-level commercialism (developer kit company, silicon company) was natural for the way the software tooling used to work; one off debugging interfaces (also frequently $1000+) talking to each vendor's proprietary compilation/debugging toolchain, booting each vendor's own bootcode and running drivers developed by the vendor.
Thankfully the open source stack is getting better. Another commenter discussed a sustainable bicycle part company ( http://news.ycombinator.com/item?id=2629346 ), and I see a similar parallel in that chip companies ought be investing in sustainable openly accessible tooling. SoC and high speed serial radically simplify many aspects of board design, chip companies ought be actively promoting the other side of easy accessibility & be working to produce open source drivers, facilitate tool support from the likes of OpenOCD, uBoot, &c, and doing every thing they can to reduce barriers to entry.
True but the situation is improving. A lot of the latest crop of ARM-based dev kits are around $100-$300 and come with complete schematics. Full-featured, size limited toolchains tend to be available for free so it's pretty easy to assess what you would get for your $1000-$1500 investment.
Eclipse-GCC-GDB with open-source JTAG dongles is a great way to get started for very little investment. So is Arduino for the lower end.
The big investement tends to be around high-end debug tools like trace probes and debuggers. It would be great to have an open-source trace probe for Cortex.
Well, depending on which bit of Oregon they're from, they might abhor the idea of a device to "denude mother gaia's old growth forests" or something to that effect...
I think about 53% of OR wants to dance naked in the old growth forests, and about 47% wants to cut it all down and go to church 3 times a week. Said as someone who has lived in Oregon and absolutely LOVES both its hippies and its hicks.
Why does everything need to be just like Silicon Valley? Everything being like Wall Street certainly didn't help either.
I especially laughed at the line that perfectionism and proper engineering are bad for startups. This explains a lot. (Yes, when it comes to selling stuff that doesn't work and you don't need in the first place, Europe has a lot to learn. Every service-based industry does better in the US.)
Meanwhile, the amount of companies founded per year is on a steady rise, so there is a entrepreneurial movement, it's just different. Not saying that either approach is perfect, don't get me wrong. It's just that I don't get those "Europe is worse because it doesn't have companies like Facebook" articles.
Neither Europe nor the US has lots sweat shops with Asian conditions, are we both now hopelessly behind this and should mend our ways?
Just like the presence of perfectionism and engineering doesn't mean that people are sitting on "unfinished" products for decades. Never mind that the US has some pretty awesome engineering itself and that the average quality of German startup software isn't any better.
Basically, the speaker was just throwing some cliches into the room, whether they fit or not. He might as well have said that Germans don't get anything done because they spend so much time to listen to the Hoff.
My favourite company in the world is a German engineering firm called Rohloff. Their motto is "No slogans, just facts" and their business is really just a single product - a beautifully engineered internal gearbox for bicycles called the Speedhub, that costs €1000 and lasts 100,000km.
Rohloff make a product as finely engineered as any swiss watch, but in doing so create an anti-consumerist product. Their product is built to last forever and usually does. While their Japanese, American and Italian competitors battle to create ever more fragile "racing" components and strive for ever increasing levels of built-in obsolescence, Rohloff obstinately refuse to make anything the most durable and reliable product.
If we measure the wellbeing of society purely in terms of GDP, Rohloff are a disaster; But the only way for Rohloff to improve profitability would be for them to throw their customers under the bus. There is nothing left to improve in a Rohloff Speedhub - it is for all practical purposes perfect. Any possible "improvement" would benefit the marketers, not the customer.
I prefer Mercedes and BMW to Cadillac and Lincoln. I would rather see my country emulate Germany than America.
I hope Rohloff is aware of the irony that "No slogans, just facts" is a slogan.
While I admire companies who make products that last forever, most people aren't that interested in spending a ton of money on something that will last forever. If you're sure you're going to be using your bike for 70+ years, $1000 isn't a bad investment. If you're like most people, you probably bike once every few months, if that, and the cheap US/Chinese/Japanese products are probably fine.
It's not fair to compare companies that are competing on price with companies that are competing on quality. For most people, "ok" and "cheap" are good enough.
> If you're like most people, you probably bike once every few months
If you're like most Americans. In much of Europe, cycling is seen primarily as a mode of transport rather than a leisure activity. Rohloff's target customer rides several thousand kilometres a year, often because cycling is their sole mode of transport or because they live long-term as a cycle tourist.
There's a term in the bicycle trade, "Bicycle Shaped Object". It refers to bicycles built as cheaply as possible for exactly the customer you have in mind - people who ride a few times a year, usually buying a bike on impulse at a supermarket. Most BSOs are built to such a poor standard that they are unsafe to ride in traffic and will last no more than a few hundred kilometres.
To a lot of people in the bike business, the BSO represents everything they loathe in the world. The bicycle is a machine of pure liberation - a mode of transport that is practically free, that prolongs your life, that doesn't harm the environment and that helps you better engage with the world around you. The BSO crudely imitates the bicycle, selling a vision of freedom and health to people who will never experience either.
I'm not a leftist, in fact my politics border on Thatcherism, but I believe that business exists to serve humanity and not vice-versa. We get the sort of business we demand. Personally, I prefer businesses that treat their employees properly and do right by their customers, that value sustainability and longevity, that seek to serve their community. Rohloff care about cycling and see profit as something that allows them to continue doing what they love. If that isn't worthy of admiration then stop the world, I want to get off.
Let me rephrase: it doesn't make any sense to compare a company that's competing on price with a company that's competing on value. They are both filling different niches in the marketplace.
Thanks, but I think that just confuses me more. To me, value is directly related to price.
From my perspective it makes sense to compare companies in order that I understand the differences between them. I would have to try hard not to compare them.
Sorry, I'm not trying to be obtuse.
In relation to the point about Rohloff as a metaphor for the Germany vs America emulation, I think the comparison would be quite useful.
One of the neat things about where I currently work is we warrant our most of products for ten years and yes, we do have software. Doing the job right, and doing it durably, is so good. (And takes so much work).
ok, as i'm currently starting my business in austria (that's in europe) i want to add my 2c.
the biggest obstacle is that the government won't go out of your way.
1. i could start my company now
2. but it would be stupid, as i would miss out on the "unternehmensgründerförderung" (start up support)
3. for getting "unternehmensgründerförderung" you have to attend a sh#tload of courses (for about 2 months) which tell you nothing about starting a business, but a lot of "what you have to do so that you don't get into trouble with the government later"
3.1. and they tell you a sh#tload of things about things you have to do to get a 'unternehmensgründungs' grant for your business
3.2. during that period your business is forbidden to earn money
4. as soon as you start your startup you have at least half a month of work outlined on what you now have to do to please your government
5. even if your company would just exists for 1 minute, you will get herrases by the government and insurance companies for the next 3 years.
oh, and every time the government discusses that fact that there are not enough new companies, they talk about another 'development program' (a.k.a. grant) which you then get educated about, if you want to or not.
sometimes i think i'm becoming an anarchist, an entrepreneur-anarchist.
Yes you should, and it's not hard. You start by refusing to take any more government money, then proceed to the advanced stage where you also refuse to pay them any. Involves a lot of travel, but who wouldn't love that? Entrepreneur-anarchists certainly do ;)
So, Europe needs less regulation on the low-end of town (small businesses) to increase international competitiveness, and the US needs more regulation on the high-end of town (big business) to decrease corruption and prevent anti-competitive practices.
So who are your co-founders? Are there any?
To me, the problem is finding co-founders not bureaucracy. As others have pointed out, you don't need to get the "Gründerzuschuss". None of the German founders, I know, says that bureaucracy is the biggest problem. Sure they complain and they might hire more if they could fire more.
But the real problem, as the article says, is culture. Germany was once the country of the "Gründerzeit". But thats more than a century ago. Indeed, most of the big companies in Europe are way older than the republics they are based at.
I'm currently graduating from one of the top tier [1] engineering schools in Germany. None of my classmates that I'm friends with is really interested in startups. They are all going for Big Car or a Doctorate. And those guys are already more ventures than average.
[1] Not, that this says a lot. University quality is still way more equally distributed than in the US. But at least, there is some competition now. Not just over research grants but also about talented students. Ironically, my university is pushing entrepreneurship a lot. They even changed their slogan to "The Entrepreneurial University" http://portal.mytum.de/welcome/
An unrelated question. "unternehmensgründerförderung" is that a real word or you just made it up?
I would make up such words when I am mad at something and can't express my frustation in real words :)
I think once you become an independent entrepreneur, you have no choice but to at least go libertarian. By independent, I mean your income is not derived from connections to the state.
Absolutely spot on. It's not lack of funds or the absence of a proper ecosystem, it's a huge cultural gap.
The whole school system is fundamentally broken. Since elementary school to the very last stages of university education I've been told to study, work hard and eventually, with time, gain access to some big and famous corporate in a responsability position, get a lifelong contract, settle down and enjoy life. That should have been my professional life goal.
Entrpreunership isn't even remotely considered. It's like it was 'none of my business', as companies were somehow a father-son 'inheritance'.
Add to that a very entrpreunership-adverse legislation (for an LLC equivalent in Italy you need a 20K deposit upfront and you'll be paying, at the end of the day, more than 50% of your profits in taxes) and you've got a recipe for disaster.
Also, the public opinion seems to have no or little interest in the matter, and the situation looks dreadfully stagnant.
Fortunately, there are sparks of cultural changes lately, especially with the younger folks, but it's a change that won't happen overnight for sure.
Fortunately, there are sparks of cultural changes lately, especially with the younger folks, but it's a change that won't happen overnight for sure.
I would like to contribute my personal data point on this. I'm a student in a smallish Dutch town at a university that's mostly focused on economics/business and medicine.
It feels like there's a considerate entrepreneurial spirit among the students here. Many seem to wish to found a startup and there are some there doesn't seem to be the mentioned aversion against success and making it big. From what I can tell, most of this is (still) just hot air, meaning that people have big ideas but don't dare start working on them. On the other hand, this might also be due to the lack of a bigger engineering or CS department with more people that can actually build something.
Maybe this is the beginning of a change of culture. I wonder if students in bigger tech-universities have similar experiences.
My personal data point is also, that most people who are interested in startups, including those who do them, are buisnes guys.
And we do have three big tech university here in Munich.
I know plenty exceptions but overall this is what I see.
"Germany’s approach, which Mr. Davidson said typically starts with acquiring a deep understanding of the problem before making the decision to act was exactly the opposite of the culture he saw both in his home country of Israel and in America."
They should appreciate different approaches instead of calling them a "problem". It's ridiculous to tell the Germans to become more like America or Israel. The German strategy has its problems and so does America's.
. Making money, he said, was not seen as a good thing to do. “The culture is changing, but it will take time.”
There's your marketing problem. If being an entrepreneur was only about making money, I wouldn't want my culture to encourage it either. They should focus less on materialism and more on making a difference and creating jobs.
"They should focus less on materialism and more on making a difference and creating jobs."
Making a difference? Creating jobs? If I was a business owner (I hope to be someday), the last thing I would be concerned with is job creation. As the old adage goes, "overhead walks on two legs" i.e. wages are a major cost for a business.
My first concern would be positive cash flow, then ramen profitability. Then perhaps getting funded, and only then, job creation.
Making money should the the sole goal of any business, then afterwards you can worry about making a difference, and employing people. Any other focus and you aren't going to make a difference or create jobs, because you will be out of business.
I am talking about the marketing (or culture) of entrepreneurship. I.E. what the article is about. Not actual business principles. Spreadsheets and bottom lines aren't going to convince anyone to make the jump.
Making money occurs when you divert resources from a lower-valued use towards a more highly-valued use. Making money is the root of all prosperity. If your culture despises the making of money, it is philosophically sick.
Guess what "venture capital" is called in Germany. "Risiko Kapital" which literally means "risk capital".
And yes, I agree, the typical picture of an entrepreneur here is that of a greedy - or dumb - person.
"...Germany’s traditional engineering-driven approach to business, with its emphasis on perfection, longevity, pride in ingenuity and culture of deep-thinking..."
I fail to see how those things are negative. As a matter of fact, I wish more entrepreneurs would adopt this kind of thinking: Being proud of your craft and your product.
Sure, you need to be able to make decisions, but there is also something to be said for making quality products instead of going for execution speed over quality.
Quality-driven thinking is part of what makes Germany one of the largest economies in the world - despite the fact that it is much less populous than other big economies like the US, Japan, and China.
I have no comment on whether Europe needs to be more like Silicon Valley, but my gut feeling is that it doesn't. That being said, Europe isn't nearly as friendly to failure as the US is. Bankruptcy laws in the EU are waaaaaay more onerous than they are in the US.
The question of whether this is a chicken and egg problem WRT European culture is up for debate.
I see a lot of "Europe is like this, Europe is like that" comments here... I wish people would realize that in terms of culture and legislation the various European countries are wildly different. The difference between Southern and Northern Europe is massive (think USA - Mexico), and even between countries that are near each other geographically there are quite big differences (think USA - Canada).
Those differences aren't a bad thing in any way and don't mean that we can't be united in some sense - but please just realize that saying that "Europe is like this and that" is like saying "North America is like this and that".
I'm an entrepreneur in E.Europe. Biggest obstacle is lack of markets, lack of capital. For most tech products like websites and software, the best (and first) market is the US. I used to think that the Internet can bridge this gap, after all, you don't need physical proximity to sell digital goods, but I was wrong. In most cases you need physical/cultural proximity to build your tech business.
One contributing factor here in the Netherlands is a huge lack of the type of investors I read about on this site. If you want to start a business here, there are two options, either go to the bank and get a personal loan with loads of interest, or depend on "triple-F-financing": friends, fools and family.
Only in internet startups that have international appeal do you find a little bit of startup funding, but these investors are hardly ever Dutch firms.
Note the rhetoric " ... seen as Europe's Biggest Obstacle": by using the passive and an authoritative tone, the WSJ tries to make it seem that there this idea comes from nowhere, and is a universal truth without being attached to real people politicking to make the world the world into what they want (umm, low taxes and regulation for us, thank you). Making seemingly universal statements is one of the best tricks to hiding partisan interests (and the left does this just as often as the right).
I would bet money that if you gave a poll, more Europeans would want to move AWAY from a "entrepeneurial culture" (whatever that means) than toward it. For the average working Fritz and Hannah it would mean giving up social services, safety, free education, and excellent vacations.
Without a healthy economy, social services, safety, free education, and excellent vacations will eventually go away. I think it's a universal truth that everyone wants a good economy, regardless of whether you're a socialist or a capitalist.
The criticism of Germany's culture of designing well made products that are an excellent value is a bit odd. Germany's economy has done much better than most others during the Great Depression II, and has avoided the problems with crime, fraud and corruption of the US.
The only reasonable explanation for the article is the author is threatened by Germany's success and hoping to confuse them by writing an article advocating they do dumb things instead.
Do you see the culture of the Welfare State as an obstacle to changing culture to accept that being successful, doing new business ventures is a good thing?
It's not the Welfare State but bureaucracy and tax greed.
Today I've read a blog post by Jesús Encinar, CEO of idealista.com, the go-to site for renting and buying real state in Spain. The article is in Spanish, short summary below):
I agree with your tax greed argument. In Poland, the state will take any and every opportunity to increase tax revenues, while doing nothing to cut expenses. I'm not sure how it works elsewhere in the EU, but here you have to pay VAT on unpaid invoices as well, effectively making you liable for your customers' inability to pay. This, coupled with the fact that courts are inefficient and generally extremely slow in rulings (in the case of delayed payments), is a sure recipe for disaster.
I don't really see the comparison here. Germany is a successful country and Germans enjoy a high standard of living. Is there a trade off between welfare and entrepreneurship? I don't know, but I don't see the issue, as Germans are doing pretty good for themselves.
I'm not sure that I see why there should be a correlation between the two ideas - it is perfectly possible to believe that you can provide decent social services (education, healthcare etc.) without discouraging private enterprise.
[NB I'm in the UK and I fully support the current governments attempts to thin down the public sector here - with up to 25% cuts in some areas (not the NHS though)].
I don't think the Welfare State is a problem at all nor do I think we have a problem in this culture with being successful. It is just that most people consider the risk associated with creating a startup and the probability of actually succeeding to low.
Being an employee is a lot simpler, quite safe and depending on your education is a lot more likely to get you a nice lifestyle.
Honest question: Is WSJ really an HN worthy source anymore?
EDIT: How far are you WSJ fanboys going to downvote me on this? The company is owned by Rupert Murdock. The same one who owns Fox news. And this article was rubbish. Am I really the only person surprised to see this here?
I think the reason for Silicon Valley being in the USA and their entrepeneurial approach is that the USA as a country of immigrants has got higher concentration of people with ADD. ADD people from Europe migrated into the USA since people with ADD are more likely to migrate.
Those people are responsible for the culture of impulsivness and creativity in the USA, kinda like role models. So migration is responsible for the lack of this kind of entrepeneurial approaches in Europe and responsible for the surplus of the same in the USA.
I think there is a large truth here, in that Americans have the entrepreneurial spirit in their blood and in their culture. Most of our ancestors were highly dissatisfied with the status quo, to the point where they were willing to travel thousands of miles to a faraway land, back when that was a much bigger deal than it is today.
Really? I think its spot on. This trend continues to today.
As PG has pointed out in his advocacy for a founder visa [1], about half of vc-backed company founders are immigrants [2].
Even the descendants of ADD immigrants are more likely to have ADD themselves. There is a 30% chance for children to get ADD when 1 parent has got it and 50% chance when both parents have it.
Therefore percentage of people having ADD should be much higher in America than anywhere else.
Well, in this particular case, they may very well be right. But things like this really bother me: "traditional engineering-driven approach to business, with its emphasis on perfection, longevity, pride in ingenuity and culture of deep-thinking put the country at a competitive disadvantage in the fast-moving new economy". Really ? That's all he had to say about what made Germany an economic powerhouse on par only with Japan ? Oh, what we need then are more social media experts, I'm sure, to drive value creation through synergistic customer discovery. I'm pretty sure he's beating on a strawman here.
Also, the last piece of candy: 'The so called “poor countries,” such as Brazil, have this hunger. They are going to catch up on us.'
And how is that a bad thing ? Good for them.