It's not only Philips that has bitten the dust, there's been a succession of other large Western electronic companies that have either gone out of business or that are now only a shadow of their former selves. Here's a partial list:
Pye Industries, UK
EMI (Electric & Musical Industries), UK
Marconi, UK
AWA (Amalgamated Wireless Australiasia), Australia
Telefunken, Germany
Thompson CSF, France
HP Hewlett Packard, USA
Kodak, USA
Polaroid, USA
Varian Associates, USA
Ampex, USA
General Radio, USA
Philco, USA
Admiral, USA
RCA (Radio Corporation of America), USA
Philips, NL - as mentioned
I used to work for RCA and back then it was the largest electronics company in the world and Philips was second. When RCA failed, Philips became the biggest but unfortunately its time at the top was short-lived.
There's several things that seem to characterize many of these failures, the first is that when founders leave or die companies often seem to lose drive and direction, and second companies become too big and diversification seems to kill their R&D/innovation.
For example, RCA lost its direction and fell apart when its founder David Sarnoff died and his son took the helm. Similarly, another spectacular failure was Hewlett Packard when its last founder died.
That said, there are exceptions such as Apple—but then it may not have been in existence long enough to tell, it hasn't been around anywhere near as long as say, Philips has. Moreover, it's highly dependent on Asian manufacturing, in the long-term, that may be Apple's Achilles's heel.
Still, I think that's only part of the problem. Manufacturing and innovation in Western countries are now in a state of malaise and they're being quickly overtaken by Asian countries such as China. Like it or not, the West generally is in a state of decline.
Here are some others - Zenith, and Motorola too - both exist in some form, but are shadows of their former selves. Also, notably - Western Electric.
Zenith was quite successful, and was making TV sets in the US until the early 90's - but eventually the lower cost of overseas manufacturing caught up with them.
Motorola and Western are the saddest though, Motorola made everything, soup to nuts used in their products, and then bit by bit sold off the bits util they were left with two way radios (Motorola Solutions is the survivor of the original Motorola Inc). Western never really figured out divestiture, there are bits of pieces of it left, if anything Avaya is the closest to a spiritual successor to it (part numbering styles and engineering style).
Delves deeper into the "lower cost of overseas manfuacturing" as cause of death for the US TV industry, with a focus on Zenith. Zenith saw this coming and tried to avoid it by investing in technology and R&D - and unfortunately chose to invest in technically superior but unpopular or uncommoditizable technologies like Betamax, digital signal transmission standards, and early analog HDTV. Heck, they paid to develop the standard for stereo TV broadcast audio, then gave it away royalty-free.
I enjoyed that. I disagree with some of the suggestions in there, RCA went to PCB's early (so did Philco, who went even earlier), and the reliability of their products markedly suffered for it. As I mentioned in a parallel article, it's not uncommon to find older (60's era) Zenith electronics that still work as new from the box. Zenith waited until the mainstream use of transistors to move to PCB's because it solved the primary issue of PCB's - heat. There (still) is no reliable way to put tubes on a PCB and have it last, and this was particularly true for television applications one, because of the amount of heat generated by particular tubes used for certain aspects of TV design, and because of the sheer number of them. Zenith went to PCB's for the Transistorized sections and kept point to point wiring for the tube portions in hybrid sets. It's part of why they had a good reputation for quality - one that persists today.
Interestingly enough, there is still a small rump of Zenith humming along in Illinois, mostly doing R&D and Technology Licensing. LG owns them now, I've often wondered if LG ever introduced US Television production, if they'd do it under the Zenith brand name.
The article was published in 1988, before Zenith decided to sell the PC business (a very successful unit, as the article indicates), rather than exit the TV business.
Lots of wrong bets out there in time - notably, look at AT&T, they held on to Western and Long Lines, they probably should have divested those and held onto the RBOC's
I had a Zenith tv growing up. I beat the hell out of that thing. It was indestructible. I was always hooking and unhooking my game systems to it and I’m told often you would hear loud crashes as it went slamming into the ground but it never broke. Eventually we changed over to flat screens and we got rid of the tv, and I’m not sure what happens to that tv. Someone might still be using it today. I wonder if the downfall of Zenith is that they made their products too well.
I bought a Zenith System III 21 inch table top set made in 1982 in 2000 or 2001 for 5 dollars at a yard sale. It lasted another 18 years.
TV's were expected in that time period to last 20+ years, they were a major investment.
The other interesting thing about Zenith is, its not uncommon to buy an older Zenith table top radio and have it work out of the box (and by older, I mean, tubes), they use mostly Mica Capacitors, and they seem to last forever.
I had a Zenith from the 1980s that I eventually had to just throw out as I didn't really have space for it and the 20" size had been obsolete for some tie. The thing wouldn't die. It actually had a better picture than some later TVs I'd owned before I inherited it from my parents. I still have mixed feelings about letting it go.
> Zenith was quite successful, and was making TV sets in the US until the early 90's - but eventually the lower cost of overseas manufacturing caught up with them.
Zenith's TV engineering business was bought out by South Korea's LG, and Zenith's role as main guiding force behind North America's ATSC digital TV broadcast system was grandfathered to LG with many of the same people.
There have been many books written on why companies succeed/fail. The general observations that you make all concur with agreed wisdoms on this matter: small startup = mobile, creative, innovative and fast moving. Estabslhsed blue-chip company = the opposite.
So... how does a large monolith renew itself? One solution with a reasonable track record is to 'replace from within', much as a cuckoo replaces its host.
1. Set up a small unit within your (monolith) company.
2. Staff it with your best and brightest.
3. Physically separate this unit from the rest of the company, but not so much that they forget 'who they belong to'.
4. Establish a line of direct communication between this unit and a high-level manager, bypassing middle managers.
5. XXXX
6. Profit!
XXXX is the problem part. How to graft the young onto the old? Failure to capitalize = Kodak (invented the digital camera but could not make it 'happen'), Palm and its development of WebOS (could have been a contender, but let down by poor hardware and other stuff), Palo Alto and Xerox ('nuff said).
This is how Sony launched Playstation over the resistance of traditionalists in Tokyo not interested in making "toys" -- they set up an independent company in Europe.
In Boca Raton. I think they moved the whole facility to Austin by now, but it was a very interesting campus when I did an internship there in 1995. The office I had used to be occupied on Microsoft who just stopped working with IBM on OS/2. Also, it being Florida and me being only 20, no one carded us when we went out for drinks.
Like it or not, the West generally is in a state of decline.
"In 2000, Europe had 41 of the biggest 100 companies. Now it only has 15. A 63% decline in just two decades. The Economist says the "most striking" reason is the lack of successful startups.
63% declines are something you can't repeat too many times without creating the kind of situation historians give names to. Two more such periods, and Europe only has 2 of the top 100 companies."
This measurement is relative. Does it indicate decline in Europe or development in Asia?
It's unreasonable to expect a region with 1/16 of the world population to have 4/10 of the largest companies in the long term.
Also, is "company size" really that good a measure of economic success? Seems like it could have to do with the local conditions encouraging smaller economic entities.
Market cap is, IMHO, not the best measure so. Revenue or market share seems a bit better. As an example, Japanese companies used to have huge market caps in the 90s, today not so much. Those companies still exist so, and are quite large players in their fields.
And to be honest, Google is more ad-tech then anything else, Netflix is entertainment. Amazon is, depending on how you measure it, 50% retail / logistics and 50% AWS. Which leaves MS and Apple as true tech companies, while Facebook is social media.
Retail, as in eCommerce, was ground breaking tech when Amazon started. Today, comparable tech is available from vendors like Shopify (web shops) and WiseTech (logistics and fulfillment). Social media was ground breaking when Facebook and MySpace came along, now it is more about selling ads then anything else. Streaming was ground breaking when YouTube and Netflix came around, now there are countless streaming services. And some of the older ones, looking at you Amazon, resembles traditional TV a lot. After all they sell ads now between streaming (FreeVee or what's it called) and broadcast new episodes on specific days, looking at you Amazon and Disney.
The problem is not that big corporations fail - they inevitably will and they arguably should. The problem is that there are no new ones, or at least not enough to make up for the losses.
Let me try: once you've reached a certain level of development, your priorities change. You don't care anymore about making more money than everyone else, you care about living a life you enjoy, even if that means you're no longer number 1 on something.
Other countries that are still on the first phase and do prioritize beating everyone else, to the detriment of their health and personal life, will start overtaking you... with time, they too will start giving some importance to a healthy life and will start falling behind (China may already have reached that point, as we now see some other Asian countries taking some pieces of the cake - helped no doubt by the West's antagony to China and its authoritarian government)... and so the cycle continues...
The countries that reach the top level in qualify of life, like USA, Australia and most of Europe, tend to still stay quite wealthy, it seems... as they still have a highly educated population capable of creating value for the country and their fellow citizens... so this story seems to be going well so far.
The lack of any major threat since 1991 has allowed them the political luxury of being able to make policy decisions based on ideology rather than objective reality. The Russian invasion of Ukraine and resulting energy crisis has demonstrated the failure of that approach so now they have to pivot. Expect a new wave of innovation led by the energy and defense sectors.
I've talked to people involved in energy/climate/ESG policy decision making. I wouldn't get my hopes up. Their religion (some might call it ideology) overshadows everything.
The west, particularly the USA, sacrificed so many industries on the alter of globalization. We gutted our workforce and told ourselves we were keeping the best jobs for ourselves. The loss of all those jobs and economic activity has contributed significantly to the wealth gap IMO. I don’t think that having lots of cheap trinkets available on Amazon has been worth it, to be honest.
> Still, I think that's only part of the problem. Manufacturing and innovation in Western countries are now in a state of malaise and they're being quickly overtaken by Asian countries such as China. Like it or not, the West generally is in a state of decline.
It’s also worth connecting this to the economic stagnation in Western Europe since 2008. GDP per capita has not budged in the UK, France, and Italy in more than a decade.
I think you mean Real GPD per capita, not GDP per capita alone as the former is also adjusted for inflation.
GDP per capita definitely grew, but once you subtract inflation, it's close to zero for some countries or even negative for countries like Greece, Italy compared to their pre-2008 numbers. Ouch!
Most of the growth has been in Eastern Europe and the very wealthy ones like Netherlands, Luxembourg, etc.
How does the GDP per capita been rising, especially considering young generation has been leaving in mass right since the EU association signing and borders open?
"seem to lose drive and direction", thats what happen to the company I work (until they close our factory by the end of 2023). For several years, there had been many ideas what to do and to change. But really just ideas, nobody did really decide and said "ok, let's do it". For years I used to say we have no idea where we like to go with our company. Now I know, our factory get closed be the end of 2023.
> For example, RCA lost its direction and fell apart when its founder David Sarnoff died and his son took the helm. Similarly, another spectacular failure was Hewlett Packard when its last founder died.
> That said, there are exceptions such as Apple—but then it may not have been in existence long enough to tell
Apple would be about the same story: it hasn't created anything really meaningful since Jobs, it mostly lives on the legacy that has been set. Luckily for Cook the company has a good storytelling and aura, but major innovation hasn't been there for a long time, and when the wave slows down it may well end up like the others you listed.
That is just not true. Apple is the most valuable company in the world, with the largest market cap. Steve Jobs died twelve years ago. The Apple Watch and Air Pods have been huge successes, so has their push into services. They also have the largest profit margins of any manufacturer. They are incredibly well run and have not lost their way. They also didn’t have to have massive layoffs as they didn’t over hire in the pandemic.
Apple became the company with the highest market cap in the year Steve Jobs died. They haven't screwed it up yet, but they haven't really been tested yet. GE was the darling in the 90s and their fall (excluding market-wide events) didn't really come until two decades later in ~2017. The question for Apple is what happens when they're on the back foot.
Suppose Intel regains a process advantage over TSMC, so PCs have a major performance advantage over Apple Silicon.
Suppose TSMC remains dominant, so AMD stays ahead of Intel, and releases something successful in the phone market. Something open, unlike Qualcomm. Now you can get a high end phone that runs the latest stock Android for unlimited years. Qualcomm gets pushed down market so their current high end becomes available at lower prices. Each of these hack away at Apple's market share.
Microsoft has a competent hardware division. Suppose they get over themselves and release an Android handset. Quality hardware and no OEM crapware other than Microsoft services integration. A Windows tablet that can directly run Android apps. Apple then has another major competitor in their biggest markets and it's the company that nearly put them out of business the first time around.
The test is what happens when they face competent competition. Qualcomm sucks and Google only cares to the extent that they want to control the device to keep people on their services. That's been true since the end of the Jobs era but it isn't necessarily permanent.
> Suppose Intel regains a process advantage over TSMC, so PCs have a major performance advantage over Apple Silicon.
That would be great to see, but doesn't seem to be happening.
Apple's big competitive advantages are here: 1) they control the OS and the app tools, so they can make switching more seamless and painless and 2) where it is painful, people are for some reason willing to take the pain from Apple where they wouldn't from others.
> That would be great to see, but doesn't seem to be happening.
Intel is making bold claims, but they always do that. We don't find out until we find out.
> Apple's big competitive advantages are here: 1) they control the OS and the app tools, so they can make switching more seamless and painless
Everybody controls the OS and the app tools. Microsoft released ARM devices and nobody wanted them because the vast majority of new Window devices were still amd64 and developers had no reason to target the six people who had Windows RT.
Apple typically succeeds with hardware architecture changes because they only do it when the new architecture has a big advantage, at which point everybody buys it and understands it to be the future and developers port their apps.
They could switch back to Intel pretty easily, because people are still releasing Intel apps and Apple still sells Intel Macs, but then they've stranded everyone who bought Apple Silicon or spent effort to support it and harmed their reputation. They might not want to do that just because Intel is 10% faster. But then Intel is 10% faster and the highest margin customers who just want The Best are going to the other team.
It's choices like that which can break companies because neither option is good but it's not obvious at the outset which bad option is worse.
> and 2) where it is painful, people are for some reason willing to take the pain from Apple where they wouldn't from others.
This is the thing where their competitors are jackasses. When Apple does something customer-hostile like making batteries or memory non-removable or not publishing driver documentation, their competitors copy it immediately, because hey, Apple is making so much money, shouldn't we do what they do? When they support their devices for a long time or don't put ads in their OS, their competitors take the "screw the customer" option again.
So Apple has a strong reputation because the likes of Qualcomm and Microsoft are awful. But what happens if anyone ever shows up who offers the market the things people like about Apple and not the things people don't?
Apple has managed to position itself as a lifestyle product as well. It's not just the functionality, it's a brand in the way that Microsoft tried (and failed) to be with Surface. Samsung positions itself in a similar way in the cellphone world, but for Apple it's everything they make.
People will put up with more bullshit because it's also a fashion statement.
And on top of that they have very good interop between the different parts of their ecosystem, and make going outside of that ecosystem painful, so you need a very good reason to jump ship once you've gotten into it.
They have a pretty good moat, and that buys time for any missteps to be corrected.
In the post Jony Ive era the Mac hardware division has pretty much addressed every hardware complaint that people had about the Ive-era hardware and reversed the trend away from delivering what people wanted.
My MBP 14" is (a lot) thicker than the old models, has an SD Card, MagSafe charger, HDMI and headphone ports, a great (great) keyboard with no touchbar (although I liked the touchbar), and plenty of USB ports.
This isn't relevant to what I'm commenting on, which is that Intel might leapfrog Apple with a big new change. Intel do not control the OS and the app tools.
> AMD stays ahead of Intel, and releases something successful in the phone market. Something open, unlike Qualcomm. Now you can get a high end phone that runs the latest stock Android for unlimited years.
This seems unlikely because of the very strong IP position Qualcomm has.
Apple and Intel combined couldn't break that position just on the modem front so good luck to AMD if they tried to build a competitive SoC without licensing Qualcomm IP and with no substantial ARM experience.
Most of the companies in the list above where the number 1, major leader, unbreakable, ... until some inflexion point, and then vanished.
Apple is not decreasing today at all, but it has not made any vision-revolution recently either. The most innovative things they launched are not visionary, the are mostly logical technological upgrades (M1, cameras, ...), or are being reverted/scrapped/fixed (the touch bar, the notch, ...). It also has a huge pressure to not be monopolistic anymore with the App Store.
The MacBook Pros really haven't changed since moving to Intel in 2006/2007. The most important change lately was the touch bar, which has been scrapped.
Moving to ARM is a nice upgrade but it is not a revolution: Apple has been using iOS on ARM for about 15 years, and iOS is mostly macOS, and the Rosetta/transition has already been experienced when going from PPC to Intel.
The new macs are great, but just logical/technological upgrades, not innovation.
Apple Watch is an entirely Tim Cook creation. Apple Silicon, too.
Apple TV is the only non-scummy streaming box. It doesn't sell your viewing data to advertisers (though individual apps may).
Apple TV+ has the highest signal-to-noise ratio of any non-niche streaming service. I don't think there's a close second.
The latest HomePods and software iteration has made an appreciable positive difference in the quality of my life -- the intercom feature in particular is huge. This may not be unique to Apple, but it's well implemented.
You can kvetch about bugs, declining software quality, etc (we certainly did when Jobs was running the place) -- but "meaningful"? Apple is more meaningful to more people than ever before.
Apple silicon is biggest innovation in mainstream personal computing in at least a decade. Their upcoming move into AR/VR indicates that they're at least maintaining a presence at the frontier.
> There's several things that seem to characterize many of these failures, the first is that when founders leave or die companies often seem to lose drive and direction, and second companies become too big and diversification seems to kill their R&D/innovation.
The latter is the downfall of most conglomerates. Kodak invented the digital camera and then failed to capitalize because they were afraid it would cannibalize their film division. Which was true -- it did -- but then the digital camera business went to someone else. Leadership needs to be able to make hard calls like that before it's too late.
> Like it or not, the West generally is in a state of decline.
I don't like it! I think the first indicator of the west's downfall was our declining production of bricks. My parents warned me of how poor I would one day be because our steel production was in decline. Now I prepare my children to live in the poverty of the United States where they have no hope of ever working in a radio factory.
While others have tackled the thesis as whole here, and I generally agree with the overall sentiment that the value chain just moved and manufacturing electronics is a really global and competitive business that makes it hard to differentiate, I want to poke specifically at Kodak.
Kodak patented and had provable manufacturing runs of fiber optic, flexible printed motherboards for computers
This, as I understand it, is (was?) the "next moment" for computing because fiber optics can dramatically increase the bandwidth of hardware components.
Yet, it went nowhere, and to this day, I don't understand why. Never was able to find follow up about it other than the original demos in a news broadcast
The research that went into things like this was so intense and demanded very rare individuals to become deeply engaged in the applicable aspects of natural science, that key progress was made in scattered areas after leaving the rest of the world's equally-qualified technologists in the dust.
The companies were built as manufacturers of consumables, based on cheap materials, labor, and mass production.
All this had occurred with wartime stakes and urgency.
With the arrival of transistors, a new generation of researchers was deployed and the vacuum tube people continued their momentum not that much longer.
Different kinds of fabrication facilities were needed for transistors, and mainly for supplying OEMs, these were also not consumable like bulbs in sockets.
The strong urgency could not be re-established and I think a lot of the manufacturers had difficulty navigating technology migrations like this. A number of pivots did not include continued component manufacturing.
Interestingly, a big vacuum chamber is where they make the semiconductors, carefully vaporizing solid-state materials in the process. And when the silicon comes out, you can make a radio without needing the little bulbs containing your own personal vacuums.
Take a look at the comments here for some 21st century readings of an EF50:
> Still, I think that's only part of the problem. Manufacturing and innovation in Western countries are now in a state of malaise and they're being quickly overtaken by Asian countries such as China. Like it or not, the West generally is in a state of decline.
Not really. China is low end manufacture and has not moved meaningfully out of that niche at all. In fact they are losing their advantage with no alternative to fall back on. Chinese assembly is not nearly as cheap as it was and their playbook is being copied by other countries (India, Vietnam).
Look on the back of your iPhone or MacBook. Where does it say it's manufactured?
Apple and others don't build their stuff in China anymore because it's the cheapest option. Far from it. The electronics supplier I used to have as a customer would assemble stuff in Ukraine(pre-war) because the worker wages there were lower than in China. But they didn't assemble iPhones there or anything close to that quality, complexity or volume. If you just need a country to assemble pre-made components as if it were LEGOs, that's not dealing with super high volumes and high complexity, like white goods for example, then even Eastern Europe is cheaper than China.
They build stuff in China because of the entire supply chain supporting the manufacture and assembly of such cutting edge devices in high volume. Stuff like machining millions of small aluminium/steel frames, batteries, tiny screws, custom flex cables or connectors. It's much easier to ramp up production of iPhones when a lot of these parts (outside the semiconductor chips which need to be imported) are developed and manufactured right next door to the final assembly and testing plant, instead of another country. Also, it makes your prototyping much faster since you can have the next iteration of a part on your doorstep in less than 24 hours.
Now China is already gaining significant market share in cutting edge OLED display market to muscle out Samsung and LG. Look up BOE. Apple used their displays in the iPhone 14 series and will use even more in the iPhone 15. China was also pushing strong in cutting edge chip manufacturing but US & allies made sure to knee-cap them in time to slow them down.
Scuffing off China as just a country for cheap manufacturing is a gross underestimation that hasn't been true in over 10 years.
"under a weighty combination of commercial and political pressure, foreign companies are beginning to pluck up the courage if not to leave China entirely, then at least to look beyond it for growth. Chinese labour is no longer that cheap: between 2013 and 2022 manufacturing wages doubled, to an average of $8.27 per hour (see chart). More important, the deepening Sino-American techno-decoupling is forcing manufacturers of high-tech products, especially those involving advanced semiconductors, to rethink their reliance on China."
"This alternative Asian supply chain—call it Altasia—looks evenly matched with China in heft, or better (see map). Its collective working-age population of 1.4bn dwarfs even China’s 950m. Altasia is home to 155m people aged between 25 and 54 with a tertiary education, compared with 145m in China—and, in contrast to ageing China, their ranks look poised to expand. In many parts of Altasia wages are considerably lower than in China: hourly manufacturing wages in India, Malaysia, the Philippines, Thailand and Vietnam are below $3, around one-third of what Chinese workers now demand. And the region is already an exporting power: its members sold $634bn-worth of merchandise to America in the 12 months to September 2022, edging out China’s $614bn."
"Altasia will certainly not replace China soon, let alone overnight. In January, for example, Panasonic announced a big expansion of its Chinese operations. But in time China is likely to become less attractive to foreign manufacturers. Chinese labour is not getting any cheaper and its graduates are not getting much more numerous. America may yet realise that reducing its reliance on China in practice requires closer ties with friendly countries, including membership of the cptpp, the precursor of which collapsed after America pulled out in 2017. And as a budding alternative to China, Altasia has no equal."
> China is low end manufacture and has not moved meaningfully out of that niche at all.
Eh, just about everything is manufactured in China. It's hard to find anything that cannot be manufactured there. It's however easy to find things that cannot be manufactured in Europe or America anymore (at least at scales above lab volumes).
Just in the tech world Xiaomi and Huawei invalidate your position. I have personally own several Xiaomi products from smartphones, smartwatch, robot vacuum, electric scooter, etc, and they are both better and cheaper than their western competitors. Not copies either, they come with their own designs and features. The most surprising for me where the vacuum robot who navigates better at 200$ with only a front facing infrared sensor that 1000$ western products with 360 degree laser.
why is HP on the list? its revenues are on par or slightly below competitors in the sector and if you add the enterprise revenues its more of a 1 to 1. Hp consumer revenue 60 billion, HP enterprise revenue 30 billion in comparison to dell 100 billion and lenovo 70 billion in annual revenue the two include enterprise revenues which isn't spun off like with HP. All three are at peak revenues. Aside from that cisco, ubiquiti, nvdia, amd, intel(ish),LAM, AMAT, micron are the best in their fields honestly its seems like EU companies are in shambles not US take a look at ericsson vs huawei idk if the US has any real competitors in telecommunication hardware cisco is more of a networking company nowadays.
Hows so? aside from not having FAANG clout Its literally the only company on that list that still grows yoy and its revenue has all but recovered since the down trend after the 2008 crash if you include the enterprise. Even the number of patents given has been growing
"Manufacturing and innovation in Western countries are now in a state of malaise and they're being quickly overtaken by Asian countries such as China. Like it or not, the West generally is in a state of decline."
I think this has a lot to do with ever stricter environmental regulations; construction is hitting the same roadblock, environmental assessments are onerous in many places of the West. As a result, manufacturing moves to Asia and housing doesn't get built at all.
Software, which doesn't face the same hurdles, flourishes in the West. A typical consumer combo is Asian hardware with European/American software. I don't think we are out of innovative spirit just yet, we rather have to prune the regulations a bit, because well-intentioned or no, one can regulate himself to complete stagnation.
I think you are on to something, but I would phrase it a little differently. Trade policy has clearly been designed to allow large multi-nationals to take advantage of lack of regulation in developing countries - little to no labor, environmental or other restrictions. (You know, the things that generally make western life bearable.) It was clear what the result of this would be: A lot of money being made off the decline of the West. I view it similarly to the way a C-Suite can bleed all the investment out of a successful company, making money hand over fist while they drive it into the ground. (G.E. & Sears come to mind.) Turns out you can do the same things with a country, or even a group of countries. A huge amount of wealth has been transferred to powerful individuals by extracting the decades of investment that built the world-leading economies of the West.
My previous comment is obviously unpopular. Somehow, many people in the software industry, which is one of the least regulated activites on the planet, theoretically love regulatory burden placed on other people, as if "more is better". No, more isn't always better.
But yes, I might have phrased my point obscurely.
As an example of what I mean. I moved into a new building here, in Czechia, twice in my life. For the first time in 2008, for the second time in 2022. On both occassions, I received the full documentation stack (in paper) for the building.
The 2022 stack is almost three times as thick as the 2008 stack. Endless reams upon reams of certificates, medaillons, permissions, test results etc. Is the 2022 building three times as ecological as the 2008 one? Not even remotely, the 2008 building was just fine in all parameters I could judge, a nice middle-class home with low energy footprint.
Somehow, the bureaucratic documentation requirements tripled in 14 years, surely not overnight; more likely, a new regulation came into force every fortnight or so, adding a page or two to the total stack. Each of those steps was probably seen as insignificant by the authorities, but their aggregate effect must be significant. People spent time and resources achieving all those certifications; at the end of the day, it was me who paid for all that work.
And for what gain precisely? The law of diminishing returns is strong in this regard. Most of the really important regulatory stuff was probably already in place by 2008. We didn't live in mud huts with outhouses and didn't burn dirty oil for heat in that building.
This is the kind of red tape running amok that leads to stagnation and high living costs in the West.
That just sounds like arbitrage, and absent laws preventing trade, if business A does not take advantage, then business B would.
And if country A prevented trade, then country B would take advantage and reap the benefits (at least short term, although the short term can be decades long).
Siemens is still huge in all sorts of markets not readily visible to the general public: electricity generation and transmission, industrial automation, medical equipment, rolling stock (trains etc), and much more.
The whole home appliance business is now owned by Bosch (it used to be a joint-venture between those two companies previously).
Consumer electronics so, everything from cameras to radios and TVs, was eaten in the 80s by Japanese companies. Then Korean companies stepped in, with actual manufacturing being outsourced across East Asia, from China and Taiwan to Vietnam and Thailand, and everyone between, left and right. Now Chinese companies entered the market not just as suppliers, but as actual brands, e.g. Huawei.
Few digital camera manufacturers? Besides Nikon, Canon, Fujifilm, Sony, Panasonic and virtually every smartphone manufacturer in the world?
Leica glass is top notch, the real Leica glass, not the branded smartphone crap lenses. And Leicas are, and always have been, incredibly over priced for what they are, a little bit like Apple and Tesla. They are great cameras to use so, I had one for a project 20 years (too scared to actually count) ago. Great camera, even greater lenses. But now way near as much better as Canon or Nikon as the price would suggest.
It's strange you didn't mention Konica, Pentax, Minolta, Olympus, Hasselblad oh right that's because they are dead or a virtual brand only. And the rest are pale shadows of themselves 10 years ago. The market is dead, dedicated digital cameras are at these point feel more obsolete than film.
Come again? Hasselblad still is, and always has been, a photographers dream. A niche product, desired and out of reach for most. That didn't change. Olympus is one of the current mirrorless brands, an isn't doing to bad, at least their cameras seem to be good from what I hear.
The entry level and point-and-shoot camera market is more or less dead so. That segment was completely taken over by smartphones, for valid reasons.
Olympus sold off their digital camera business to a private equity firm. It's now a shadow of it's former self with no expectation of growth.
Sony makes the sensors for Hasselblad. The sensor is the heart of modern digital cameras so Hasselblad isn't adding much beyond a brand name. Eventually Sony will probably eat their lunch.
Late day SLR makers, full-frame that is, was basically a duopoly between Nikon and Canon. As was early DSLRs, so you had some more brands then. If anything with mirrorless there seem to be more camera makers around than before, and being on par with each other. As opposed to SLRs or the early DSLR market were it was basically just Canon and Nikon.
Sony had a pretty solid hold on a chunk of that DSLR prosumer/enthusiast market as well. Fuji and some others started making headway right before mirrorless started taking off.
Hasselblad’s current digital offering is only really interesting in the commercial space where you only really need one if you’re getting paid enough to rent one on the first place. Plenty of alternatives exist as well when it comes to digital backs. The old film cameras are of niche interest, but Hassleblad isn’t making money off that.
With medium format like Hasselblad, the back are anyway seperate from the body. Hasselblads are great cameras, Leicas as well. Objects of desire both.
I did some middleformat work as a teenager, not with Hasselblad so. But this whole looking down into the view finder to see a mirrored picture makes you think a lot more about composition and so on. I liked it, but film is just to much work for me at the moment. And digital backs for medium format way too expensive. I loved medium format in black and white so. Damn, now I have to find time to go through my dad's archive with him!
Leica is doing interesting things with prosumer digital too, though. The rangefinder ergonomics of the Leica Q allow for completely different use cases and feel even though it is hilariously overpriced compared to a competing Sony fixed-lens (RX1R or something like that.) Last I looked, it was at least a $1000 differential and the Sony beat the Leica handily on features and potential quality. I’d still never trade my Q for one.
Leica makes great cameras, unfortunately as you said over priced... I never touched one of their digital ones, but I was furtunate enough to have a film one for a school project before going to university. The camera was loaned to my dad, who was generous enough to allow me to use it. It was great, really was. It kind of felt better than the Nikon F4 I usually got, but not that much better to justify the price.
One thing I kind of dream about so is some Zeiss glass. Not that I'll ever be able to justify it so! Besides, I have developed a weakness for old Nikkor manual focus lenses.
If I had a Leica so, I'd never trade it in for something else neither! Some things you just don't do!
Siemens is an enormous high-tech conglomerate and their most visible consumer arm is quite irrelevant next to they production of precision manufacturing tools, nuclear reactors, etc
There are very small companies building PCs nowadays, see Framework, Pine, Purism, etc. So a much larger company can do it too without even thinking if they should. Also they are more B2B oriented, and the consumer part was probably a side effect. Further they were probably using headless PCs in their industrial systems too. It's not at all strange.
We had Fujitsu-Siemens PC's at a previous job. I think at some point they dropped the "-Siemens" part of the name so I guess Fujitsu bought out the shares and went all alone.
Australia is politically aligned with the "western" world (USA's sphere of influence) rather than with russia's ("Eastern bloc" at least until it fell apart) and it's quite typical to see it listed as such, despite its location on the planet.
As we're discussing manufacturing, the opposite of the western world nowadays would be China (and India, Vietnam, etc)
I include Japan and South Korea in "the west", they share political and economical ideologies and military alliances with the USA.
The term itself is an artifact of geographical considerations from the Cold War era, with Europe and Russia being west and east of the other respectively.
Nowadays with Russia increasingly demonstrating their ineptitude, China is starting to fill "the east" shoes.
> The term itself is an artifact of geographical considerations from the Cold War era, with Europe and Russia being west and east of the other respectively.
Not so much, no. The concept of the "Western World" originated in the actions of the Roman emperor Diocletian who divided the Roman Empire in 286 into two halves, each with its own separate capital, government, and church.
Vietnam and the US are weirdly close considering what the US did to them. In 20 years, I expect relations with VN to look like our relationship with SK.
Australia has always been part of the west. It feels culturally like a mix of US and UK. "The west" has never been geographical. It is named like that because the center of gravity has is western Europe and the US and perhaps more importantly in was named in opposition to the Soviet union and so looking from Europe is looks like "the west".
Poland very much is part of the West, and is actually on course to become one of the richest countries in Europe over the next twenty years as measured by GDP per capita.
Over that same period Europe is projected to become poorer than Asia in gdp ppp for the first time in 500 years. I'm sure I won't be hearing Poles making the case they are actually part of Asia within those 20 years.
The whole west/east dichotomy is an artifact of the Cold War. Countries aligned with the US and Europe are "west", countries aligned with the Soviets (now Russia) are "east".
Nowadays China is taking the helm of "east" from Russia, but either way it's a geopolitical concept and remnant.
At the UN, “the West” officially means the “Western European and Others Group” (WEOG). Poland is not a member, it is a member of the Eastern European Group instead. Of course, many consider the UN Regional Groups to be a bit of a Cold War relic. But still, it goes to show that whether or not Poland is part of “the West” all depends on how you choose to define “the West”
"the West" does not officially mean anything, other than vaguely refer to Cold war sides. This is why it is not a very useful model (like left and right in politics).
Poland is definitely Western aligned, as Japan or Australia, which shows the absurdity of this model.
I think your assumption that “normal people” all use the term “the west” in the same way is highly questionable. Many “normal people” don’t really think about what the boundaries of “the west” are and either don’t have an opinion on whether or not Poland belongs in it, or else have a different opinion from yours.
Yes, both Bulgaria and Cyprus are without any doubt part of the west. Both are even part of the European Union. Claiming that they are not part of the west is laughable. Bulgaria is adjacent to Greece which is also part of the west. Culturally large parts of the Balkans are also part of the west.
You're confusing cause and effect. The West is defined by embracing enlightenment values, democracy, and capitalism. The "East" is defined as those powers that embraced authoritarian rule and communism.
For a while there was legit economic competition, Soviet GDP outpaced the US for a time in the 50s, but eventually the economies of scale and efficiency produced by the capitalist West out-competed the Soviets and won the Cold War.
> Like it or not, the West generally is in a state of decline.
Europe is in a state of decline. The US is doing fine. The difference between the US and Europe is that we went up the value chain ( Microsoft, Apple, Google, Facebook, Netflix, Nvidia, etc ). Europe did not.
Consumer electronics is relatively low level tech. It was "gifted" to the japanese and then the koreans and eventually the chinese while we moved up the chain to the more valuable internet, social media and software development.
Where is europe's microsoft? Their apple? Their facebook? Their google? There is no "the West". No more than there is "the East".
Edit: Also, it isn't consumer electronics that's the issue. It's the future ( the next rung up the value chain ) - AI, big data, quantum computing, bio-tech, green energy tech, etc. Will europe even participate because currently it looks like it will be only the US and China competing.
This is just strange thinking to equate decline with some sort of technological leadership.
Counterpoints:
- The US is still at a trade deficit with Europe despite the strength in dominating Internet technologies.
- US society is much more polarized than Europe both in economic equality and political affiliation.
- Europe has some tech unicorns. Some like Spotify or Arm might ring a bell. But then again does it really matter where something is incorporated? Financial markets are very globalized anyway. So a European citizen can buy Apple stock and profit in the same way as an American one. Some holds the other way. The German car makers raking in billions each year are owned by international investors all over.
Last on Greentech: there are players such as Vestas and Siemens very much involved in renewables.
I look at a lot of articles from The Guardian and I'd say the UK seems to be in full on disaster mode, whether it is the government trying to criminalize dissent because everyone from labor unions to schoolchildren to right wing anti-immigrant folks are protesting. Inflation is really out of control, fresh veggies are missing from the supermarket, the "small boats" situation makes any concern people have about the border in the US seem like nothing.
Added to that, the country is literally shitting[1] itself. Its really weird living here at the moment, its like some kinda of cautionary fable about the monster that made everyone impose trade-sanctions on themselves, but none of the towns-people are allowed to to talk about it or discuss it.
The Guardian comes with a certain bias for disaster-mongering, especially (but not exclusively) at the expense of Tories; all of those things are real problems, but take it with a grain or two of salt.
Source: I live in the UK and still eat fresh veggies.
"The Guardian comes with a certain bias for disaster-mongering"
Perhaps so. But from my perspective of Australia the UK looks as if it's on the slide (I'm not smug when saying that as I reckon things here aren't much better, we've always been a mob of ostriches).
My family/cultural heritage is mostly UK so I have no pleasure in watching the decline. I've also relatives in the US and France and I've lived and worked in both Europe including the UK and the US so I view what's happening from a broad Western perspective and I'm very gloomy about what I see.
It's too complicated to give a quick summary of the problems but if forced to do so in a sentence then I'd say it's cultural. The West is being driven apart by widening ideological views, there's less cohesion, fewer common values and aspirations now than there once was.
On the other hand, the exact opposite is happening in Asia, people there know their time has come and that confidence and optimism drives cohesion and common values.
BTW, I've also worked in Asia for a short while so I've some feeling for what's happening there.
I read The Economist too which would like to like the Tories (say if they were still run by Thatcher) but they've got as little love for May, Johnson, or Liz Truss as they had for Disraeli back in the day.
The Economist avoids "shit news" as well as news about sports (What Six Nations?) and is not so negative as The Guardian but doesn't paint a picture too different about the general disorder or Brexit being a disaster.
> This is just strange thinking to equate decline with some sort of technological leadership.
Technology is one of the best indicators of power, progress, societal dynamism and hope for the future.
> - The US is still at a trade deficit with Europe despite the strength in dominating Internet technologies.
Who cares? The US has trade deficits with mexico too.
> - US society is much more polarized than Europe both in economic equality and political affiliation.
Last I checked, there isn't a war in the US and the US didn't lose a member like europe did with brexit.
> Some like Spotify or Arm might ring a bell.
Arm is owned by nvidia. Spotify?
> So a European citizen can buy Apple stock and profit in the same way as an American one.
Is that what we are talking about? Trading stocks internationally?
Man, there are quite a few people here really hoping europe stays weak and stagnant - especially technology-wise. Wonder why. I guess trading apple stock is the same thing as being able to create apple.
>Technology is one of the best indicators of power, progress, societal dynamism and hope for the future.
Do you think people in Europe don't get to use American technology, and vice versa? In a globalized world, it doesn't matter much where something is invented. Very few things are banned for export (mainly weapons and other military things).
>there isn't a war in the US and the US didn't lose a member like europe did with brexit.
Way to contradict yourself. First you imply that a country is in Europe if it's there geographically speaking, but the very next moment you imply that a country isn't part of Europe if it leaves the EU. Which one is it? Ukraine and Russia have never been in the EU, and the UK is still in Europe geographically.
>Is that what we are talking about? Trading stocks internationally?
What are you exactly talking about then? You seem to imply that American tech companies are only serving the interest of the US.
>Man, there are quite a few people here really hoping europe stays weak and stagnant - especially technology-wise. Wonder why.
Let me tell you why you might think that: Europe and the US are very different in many aspects. Sure, the collective wealth and might the US have is more than that of Europe, but the quality of life on average is arguably better in Europe. While nobody in Europe hopes that Europe "stays weak and stagnant", it is true that not many in Europe want to live in a country like the US, where legislation is pro-corporation at the expense of the people; the national budget is spent on military to protect the country's super power status while people don't have access to universal health care nor high quality public education; and where the government is in a constant grid lock due to radical polarization. It's a trade off most people are happy to make.
> Technology is one of the best indicators of power, progress, societal dynamism and hope for the future.
I for one am happy to be in Europe, where there is still at least some consideration going on about certain kinds of technology usage. We do not yet have a social credit system, at least that I know of, and some of us are trying to stay off the highway to dystopia surveillance state.
What exactly do you mean by the phrase I quoted? What usage of technology? Or the invention of it? The regulations about it? Just saying "technology" is quite vague.
It’s interesting how you added Ukraine and Russia to the conversation by mentioning the war. Indeed, they both are part of Europe. Did you really mean that?
>> This is just strange thinking to equate decline with some sort of technological leadership.
> Technology is one of the best indicators of power, progress, societal dynamism and hope for the future.
It certainly is, but there are many other variables to consider. European want at least some balance with other values which we consider important. Equality, privacy, healthcare. Just to name a few.
You mention the UK leaving the EU. They left because they felt restricted by the rules of the single market and wanted to unleash their capitalism more akin to the US. Look where it led them. To utter chaos and lack of tomatoes. European countries are too small to give birth to super tech champions at the same rate as the US and Europe historically has not enough VC capital, but we do have a strong SME segment. Companies which are world leaders in their segment.
Europe isn't in decline in the sense that it isn't a great place to life.
> Where is europe's microsoft? Their apple? Their facebook? Their google? There is no "the West". No more than there is "the East".
One place to start looking would be their local Apple, Meta and Google offices.
This is true, in a sense. Big tech giants are headquartered in the USA because the USA made a bunch of choices that make it easy to start a tech company there. But as they grow, they become multinational giants. There is a *ton* of FAANG revenue moving into and through Europe in all directions. Europe is just fine.
I mean, this is like asking why California fell so far behind Delaware in startup valuation. It's true, but not meaningful.
They have offices in Sillicon Valley to tap into the desire of the locals to work themselves to death by the age of 35, so that they can hopefully retire before they die in order to reclaim back the health they lost while trying to "make it." Nothing more.
And why are their headquarters in silicon valley except to exploit the local talent pool? With the exception of actual manufacturing, every site decision in a tech company is about labor availability.
So Europe gets value from tech in proportion to its concentration of talent, same as everyone else. Is Europe falling behind on tech talent? Clearly not. So it'll do just fine (where conversely the bay area is largely tapped out at this point, there's no place to put more talent even if it could find it).
Companies expand from where they are founded to reach new labor markets, but that's not the only consideration for where they begin. Startups are founded in SV (and other tech hubs both in and out of the US) because it's an intersection of high quality talent, permissive laws that make it easy to do business (although that doesn't appear to be the case in SV anymore), capital that's willing and able to fund startups, and network effects of being next to loads of other tech companies. Europe is missing pretty much all of that outside talent, and many would argue that even that is questionable because of the typical European work ethic.
"Founding" and "located in" are rather different though. I take this discussion to be about "Does Europe get a reasonable share of world tech revenue and activity?". And, duh, yes it does. It just doesn't have the Googleplex or Apple's weird circle thing.
An additional reason for the location could be that vcs/founders are located there.
I have seen a similar pattern, where a company has an office in an unusual place because one of the founders lives there, and does not want to relocate.
By the time you include corporation and employment taxes, I'd be surprised if the "total cost of employment" per employee was much different in Europe.
The FAANG companies are 25 years old at this point, they aren't that relevant to today's situation. Europe has had many large companies going, but most got acquired by their US competitors. In part because they could use offshore assets and also avoid taxes once acquired.
But that is also only partly relevant, because the same is true of the US. If the US is doing so well by that metric where are the next US FAANG companies? The reality is that neither Europe nor the US moved up the value chain but sideways to primarily offer services.
That isn't because of manufacturing. Many think so because they don't know much about manufacturing. It is because of the cost of living. Western economies can't support a knowledge based ecosystem. I can have things made in Europe, or China. It doesn't matter. Where can I go and develop a product for years, or work my way up in a product company, or eventually hire a hundred people to do it, all without suffering? The answer is nowhere because the market is dominated by service focused companies that require less start time and have a less variable success rate. In China, its almost in every decent city.
They're definitely relevant in that they (plus a few others such as Red Hat, Salesforce, LinkedIn, etc etc etc) are the highest canopies in the US tech forest, meaning it's harder to grow as tall as them without being acquired by one of them. Possibly OpenAI could be one if it keeps doing well, and isn't swallowed by Microsoft.
I would probably peg Japan as most likely to be left behind by EV, to the point where Toyota is spreading FUD in Japan about EVs being a dead-end in favor of hydrogen fuel cell cars.
"Left behind" is somewhat subjective; [0] discusses the reasons for Japan's national strategy being big on hydrogen.
And if Toyota manages to FUD(/evangelize) consumers to buy hydrogen fuel cell cars, then they lock in customers and infrastructure towards hydrogen and away from EV. In part energy climate strategy, in part protectionism? Certainly it makes Japan less dependent on energy imports.
> Resource-poor, Japan began research on hydrogen after the 1970s energy crunch. The 2011 Fukushima nuclear plant accident and public anti-nuclear sentiment accelerated interest in hydrogen and other clean energies.
> [In 2021], the government issued its carbon neutrality road map, doubling the share of renewables providing electricity, to as much as 38% by 2030, with nuclear supplying about a fifth; its hydrogen-ammonia fuel target was set at 1%.
> Japan's placing multiple bets on hydrogen. With great fanfare, last year Japan opened one of the world's biggest "green hydrogen" plants, near the site of the Fukushima nuclear accident.
> Japan's hydrogen dreams aren't driven just by resource scarcity and meeting climate goals, [climate lobbyist InfluenceMap's] Nagashima said.
> "Japan has lost its competitiveness to other countries in terms of production of solar panels or wind turbines, and hydrogen is seen as a sector where it could lead in the world," Nagashima said.
>[US expert Wipke] said hydrogen is better suited to sectors like heavy industry and trucks, for long duration energy storage.
Given that you need electricity to produce hydrogen, EVs vs hydrogen for energy imports is a bit of a wash.
The results of this industrial strategy speak for themselves:
> Most are there to protectively top off their tanks, another employee tells me. Japan has only about 160 hydrogen refueling stations, concentrated in the country's three major cities. By comparison, there are about 30,000 gas stations across the country. Once every three months or so, a motorist ends up stranded, their tank empty, and they have to get towed. In addition to there being only a few vehicle models to choose from, which all have high sticker prices, the paucity of refueling infrastructure has turned consumers off.
And this all after Toyota has had 30 years to make the technology pan out.
(Obviously both BEV and FCEV need electricity, but that can equally come from renewable. FC has lower wire-to-wire efficiency than Battery, so clearly optimal energy efficiency is not Japan's motivation. Hydrogen refuels faster and a full tank gets you much further, but the tank is very bulky.)
Wondering given it's Japan and they keep stressing "resource-poor", is hydrogen FCEV less susceptible to embargoing on metals by China than BEV?
I worry about ASML. It's interesting that ASML is mentioned here when talking about an ailing Philips as it's a spinoff of the latter.
My concern is that in the European environment it stands alone—it stands out amongst European manufacturers like a pimple. It's IP is already under attack from China and the chances of it hanging out indefinately over the long-term I reckon are pretty slim (but I truly hope I'm wrong).
The trouble is that being the only standout in its environment (Europe) it becomes fair game, especially so when the cultural ethos isn't strong or is missing (NL and other European governments/EU should be doing more to protect it).
Also, ASML isn't helping itself by objecting about being blocked from selling to China, short-term gain will likely be its long-term loss.
To survive long-term, ASML needs to be amongst other like firms in a culturally similar environment and that's not the current situation.
Electronics (consumer or otherwise) isn't "low level tech." This isn't a game where there's a definitive tech tree. Electronics design and manufacturing is not a solved problem and innovation is getting wild these days (esp in consumer devices, like wearables, XR, IOT, etc).
Something to keep in mind is that consumer electronics are at the leaves of the industrial tree - AI, big data, energy, quantum computing, etc - those are branches.
It's not the whole story but it isn't nonsense. You literally can't restructure a company in Germany without doing a year long song and dance with the worker's council. This is not agile enough for a startup.
You don't have that problem in Canada, and you have many of the same advantages but you don't have nearly the amount of startups and definitely almost no big ones.
The problem (and opportunity for US investors) is Canada has almost no VC, and the few they have are extremely risk averse.
One one side they held back economic and social growth of ~1/3rd of the population for more than a century through systemic racism and discrimination. On the other side, the government has created little incentives for capital owners to take more risks thanks to policies that artificially propped up real estate (enormous immigration quotas, lax laws on foreign money entering the country, no market correction post 2007 crash).
Why invest in hard to understand and uncertain tech when you can simply build luxury houses and sell them to wealthy foreigners?
> The problem (and opportunity for US investors) is Canada has almost no VC, and the few they have are extremely risk averse.
Based on all the stories we've heard over the past week from VCs and entrepreneurs about how SVB was the only bank willing to open accounts and extend credit to startups, I think many people underestimated that bank's importance in the Bay area economy. (I've also been startled by just how important SVB's UK, Canada, and even China branches seem to have been for their startups.)
While SVB wasn't present in most other areas of the US, there is an extensive network of regional banks (of which SVB was one), so the odds that one is going to offer a no-revenue tech startup in Nashville or Phoenix or Worcester the financial help it needs to get started aren't bad. Now compare that to Canada, which has the Big Five national banks, tiny credit unions, and almost nothing else; apparently this makes borrowing money much, much more expensive than in the US. I hear that Australia is the same way.
As of 2018, only 5% of German companies of 5 to 50 employees had a worker's council.[1] And even if a council exists it is just max. 3 members at this size.
I can imagine that in some cases the council makes necessary restructuring more difficult, but in the crises of the last decades, works councils and trade unions in Germany were much more willing to compromise than in many other European economies where this so-called "social partnership" is not so pronounced, for example in France. All in all, it seems that worker's councils in Germany are a quite successful institution to mitigate conflict between employees and management.
"...without doing a year long song and dance with the worker's council."
Germany is no exception, much of Europe and the UK are the same. One can argue over which European country is worst or best but it's small crumbs. Look at France and the current arguments over retirement age, it's all part of the same cultural problem I mentioned elsewhere.
Europe is an old society with old traditions, the US less so and its west coast even less so, so it's not an unexpected problem for Europe. The West's real problem is how to deal with it.
Asia, on the other hand, has even older cultures but having largely missed the old Industrial Revolution they've also missed the cultural baggage and artifacts it imposed on the West. This has allowed Asian countries to jump over these hurdles, that's why they are doing so well now.
I feel far from optimistic that the West can overcome this cultural baggage easy. But I hope I'm wrong.
The industry is a lot "closer" than people expect; it runs a lot more on handshakes and people going to the same parties than on cold numbers, so not only do startups have to be in the US they have to be specifically in SV.
Two decades ago at a UK chip design software startup, the founders started a US branch and migrated there for just this reason.
(The SVB bank run shows how strong the "being in the right whatsapp group message chat" is)
It's also the sheer amount of laws and regulations around opening and running a business that makes it really hard for small organizations to get started. There's a LOT of paperwork around the EU, and as soon as you want to sell to the neighboring countries it's a lot of additional paperwork, red tape and regulations (it's better than it was still).
A founder from Europe explained the 4th person to join the company as the 2nd employee (their first hire was an engineer) was a non-technical person whose job was mostly to fill out grant application forms. There are hundreds of different grants for companies with a long list of criterions. For example, they could have the countries government (so the taxpayer) foot the bill for a fraction of an employee's salary if he or she was a refugee from certain target countries. Of course, the local government had a similar scheme with a completely different application process and slightly different criterions.
None of the grants had anything to do with their tech or how viable the business was by the way.
> Manufacturing and innovation in Western countries are now in a state of malaise and they're being quickly overtaken by Asian countries such as China. Like it or not, the West generally is in a state of decline.
China is pretty good at manufacturing, and pretty terrible at everything else. Research and innovation in particular are very much China's weak point.
I grew up in Eindhoven, the birthplace of Philips. It was everywhere in the city back then. My entire family worked for Philips: dad, grandfather, uncles.
I don't really think it's a bad thing what happened to it. Many viable components have been spun off and sold in various ways; the business is essentially fine, just not under the Philips name and management. Does that really matter? I don't think it does. And giant companies are not a good thing: the bureaucracy in Philips was legendary and giant companies don't tend to be good for consumers.
It is hard to underestimate how much influence Philips has had on the history of Eindhoven; it turned a small medieval town to the city it is today (technically its had city rights since 12-something, but it was really just a small town until 1920). It's also easy to be romantic and look back with rose-tinted glasses, or to transpose activities from the past to today.
IMO where Philips went wrong is selling off their name for everything they weren't interested in to cheap brands, totally undermining their name. TVs (Philips CRT tubes) were legendary in the 80s, now they're made by a budget OEM from Hong Kong. Pretty much all home electronics in the end. Very bad strategy, with minor short-term rewards and killing the brand long-term.
The name game with Philips goes back many decades because there was once a vacuum tube manufacturer in the U.S.A. named ''Phillips'' (two ls), so they were forced to adopt new trade names for the lucrative North American market: the Norelco name for consumer appliances and the Maganavox name for consumer electronics. Their reputation for quality was excellent back then. Oddly, Canada's Bell Telephone subsidiary Northern Electric did not push Philips away from using the Norelco name. Nowadays those names have almost no connection to their original organization.
Generally the products and their packaging were simply ''badge engineered'' to swap out the Philips name for Norelco or Magnavox. North American consumers back then would likely not have recognized the Philips brand. Heck, it is doubtful most of them would have recognized the Phillips brand of vacuum tubes either, but trademark law prevailed. As for given names, there is no special exemption for them (i.e. someone named Heinz cannot use their given name to begin marketing a line of food condiments without a battery of corporate lawyers representing the giant Heinz outfit putting an end to that).
Perhaps but selling their brand to the lowest bidders was just dumb.
But I think they could have continued. They certainly had a thing with Ambilight. And whatever the Hong Kong company does now, they could have done themselves in the same place (and thus for the same wages). I think it's just a lack of strategy vision.
Yes!
I stopped buying Philips products and have actively advised people to avoid the brand after owning 2 different products with questionable quality.
At this point I wouldn't buy any of their products, so it's hard for them to convince me again, even if they improve.
Sad.
What happened to Phillips is something that proved beneficial in the long run.
Legacy of Philips is now ASML, NxP, pretty good startup scene in Eindhoven, and a few other companies.
The only victim here is the name. If Philips tried to move as one company they would have probably dragged down their chip related businesses by siphoning money into the fields they were losing.
Of course one could argue that the company under Philips name should have chose different direction and spun off consumer or medical market, but at the end of the day it's just a name.
I believe in hindsight this will be a way better outcome for everyone than the one we'll see from big tech if they're not broken up. There are already too many examples of them killing competition by leveraging their monopolies or buying it up and killing it off.
Siemens is essentially a hedge fund, they invest one place, divest another. You might not find the label on your fridge but its still a $80B revenue business.
Quite likely for them it was a mistake, letting promising companies go lest you smother them with your inertia. Like parents letting their children leave to live to their full potential. Not that businesses do or should have that as a goal per se, but it seems to have been for the greater good.
Phillips also helped spawn FEI, which was then bought by Thermo Scientific and have a near monopoly on Transmission Electron Microscopes, as well as being competitive in other EM fields. Without Phillips Electron Optics, most cutting edge structural biology couldn't be done.
Not mentioned in the video is that Philips Ventures is effectively buying up MedTech companies with proven tech, and hovering up the IP into their portfolio as an 'innovation' strategy.
Effectively it's a zero risk venture for big corp companies that depend on innovation, they don't have to sink money in research projects in their own R&D labs. Just find someone with something interesting which has already been de-risked, with proven feasibility, buy them out and develop for manufacturing.
For clarity all big MedTech companies are doing this not just Philips.
> Not mentioned in the video is that Philips Ventures is effectively buying up MedTech companies with proven tech, and hovering up the IP into their portfolio as an 'innovation' strategy.
Why is that bad? Unless there's something underhanded about the sale, it sounds like it's exactly what a lot of startup founders want: make an MVP, get noticed, get bought, take your pile of money and make another business or go sit on a beach or whatever you want to do.
I think the issue is that companies like Philips aren't just buying a rising star, they are also buying out fractions of early startups or creating 'accelerators' for early startups. They are reaching out and grabbing earlier and earlier in the pipeline.
To me this is bad from two angles. For startups, they start to get influenced and stiffled by big corp 'this is the right way' too soon, which stiffles innovation. For big companies it gives suits an easy cost down to defund internal R&D and externalize that cost, this means that all the deep pocket research you had in the golden days of Bell Labs cannot be replicated, which again stiffles innovation.
I agree all big MedTechs do this and I wonder what other (better way exist)?
Typically these giants have more cash and heavy process instead of small nimble engineers who can freely use their potential.
PS: I work directly with two ex-venture Philipps people, thats why I ask.
I mean there probably isn't much of a way out. It all comes down to funding.
It is very rare for MedTech startups to have funding to actually establish themselves in mature market, most of them will have funding to get pass regulator hurdles or just create an IP moat around the business, then the VC's expectation is that another giant will buy them out who will then have the purse to take products to market at scale.
My worry is that more and more the bigger companies are buying or owning parts of startups sooner and sooner in the technology readiness pipeline. That will probably limit how much we actually innovate, both from the startup side that now has oversight and from the internal R&D ranks at big corp, that become glorified PMs and strategists rather than researchers.
The only way forward is for VC's to stay for longer horizons, but specially in MedTech if you are selling something that involves a widget or hardware it will probably never scale in a way that would make it an interesting business for VC's. Perhaps the exception now is MedTech with SaaS type business models or cloud based services.
I have a old Philishave Philips shaver who is made in the netherlands. Replaced the old shaver with a newer Philishave shaver made in China. Turns out the old shaver is better than the new. The old shaver shaves more closely to the skin for a better result more smooth shave.
Don't we consider ASML a tech giant? A spin-out of Philips btw, as is NXP for example.
Edit: Should have watched the movie first. To answer my question: I guess we don't. And, it's electronics not tech indeed, otherwise it could have included Siemens for example.
When the Chinese will be able to duplicate what ASML is doing its share price will go back to "normal", i.e. to 8 to 10 times less what it is today (that was the level until relatively recently).
My uncle used to work for Philips in Brazil at its peak. They had just completed building a data-center (we didn't call them like that back then) in the 70's, IIRC, to host the many very large IBM mainframes they operated. It was a thing to behold - the whole company connected via 3278 terminals, running e-mail and other productivity applications on IBM PROFS (later to be called OfficeVision).
The building now hosts the biggest datacenter of one of the largest Brazilian hosting companies.
Too many companies moved from making things to licensing technology and brands, forgetting that the best way to get valuable technologies and brands is by making things.
Isn't this disingenuous? Phillips owns a 24% stake, or 99 million shares, in ASML. Philips is granting the underwriters an option for up to nine million shares. Philips also still holds about 1.3 billion TSMC shares, representing approximately 5.0 percent of TSMC’s issued stock.
ASML is a monopoly that is literally the only supplier for most cutting edge equipment used by semi-conductor fabs globally (TSML, Intel, etc). They make it all possible. In this regard, Phillips has become more of a holding company than an electronics operation itself.
They sold off the last of their stake in ASML in 2004. They also sold off the remainder of their stake in TSMC in 2007. If they had kept both stakes, they'd be worth like $140b instead of $15b.
Strange, my Dad worked for Philips for 30 years, well Mullards, which was a subsidiary. Reminded me of the newsletters, the employee discounts, the calendar type thing to celebrate 100 years.
Every time we have one of these threads, it fills to the top with denial. Maybe it would be healthier for the EU if people would accept the stats and consider how to improve the situation? It's certainly possible - consider Massachusetts turnaround after the 90s, same with Pittsburgh, Colombia etc.
Inertia kills economies, dynamism drive them. I see a lot of cultural acceptance of "the way it's always been done" here.
But it's not really Philips anymore... It's the same with some TVs with the Grundig brand, which is also very strong. It's just some Chinese factory licensing the brand name... Grundig went bankrupt a few years ago...
Still exists, well and kicking. They just don't make phones anymore themselves. And their mobile network business used to be part of a joint venture with Siemens.
State level percentage sales tax is simple enough, but the US has gone overboard with every jurisdiction implementing its own form of sales tax, and implemented using asinine calculations.
Sometimes percentage, sometimes flat, sometimes combination, sometimes based on the volume, sometimes based on the mass of an ingredient, sometimes based on time of year, and on and on it goes.
And it could be from federal, state, county, city, transit region, federal agency. I look at my mobile phone bill or hotel receipt and there are 4 to 10 (literally 10) itemized taxes, and I have no idea if I am being scammed or not.
And the items applicable to sales tax and exempt from sales tax is constantly changing. And the entities exempt from sales tax and the documentation requirements, placed on merchants, is always changing.
This is just the website for US federal diplomat sales tax exemption instructions.
This type of complexity exists for federal employees, for 50 different state employees, and on more local levels.
I can only assume there is massive amounts of under and overpaid sales tax, with all these avenues for corruption and mistakes. And how much of the country’s productivity is wasted on calculating and auditing all of this?
Edit: this turned into a long rant, but just look at what a simple merchant is expected to know or implement in its systems to sell trivial consumables:
> In addition to the specific text, each tax exemption card bears one of four animal symbols indicating the specific type of tax exemption of the cardholder:
• Owl: mission tax exemption cards with unrestricted tax exemption.
• Buffalo: mission tax exemption cards with some degree of restriction.
• Eagle: personal tax exemption cards with unrestricted tax exemption.
• Deer: personal tax exemption cards with some degree of restriction.
To start VAT reduces the margin of benefits of the maker and also damages the brand by requiring it to burn uncountable working hours to calculate taxes that could be used in a more productive way. This is bad, but their worse effect is to introduce friction in the trade, Introducing fear, angry, uncertainty and mistrust between buyer and seller.
This has the effect of reducing the market. If people needs to pay more for a product the final effect is less items sold and people delaying their purchase. If people things that has been scammed with a product with a poor ratio cost/benefit will be reluctant to keep buying accessories or other products from the same brand.
With VAT people needs to remind all of the time that the price for <stuff> that they asked for, could be with or without VAT, and that need to ask again to clear the issue and avoid surprises when paying. They will need also often to calculate the 21% more in your mind, before to decide to purchase or not, and this is a real pain in the ass.
VAT changes the behavior of the clients to be more cautious and conservative when buying things. Buyers will keep buying the old stuff that they know well and ignore entirely the new products, or will delay their purchase until spend some time looking actively for cheaper replacements. This is specially bad for innovative companies, that need to recover as soon as possible the zillions invested for years into creating new products. They will success only if they can attract enough early adopters; and a market full of cautious buyers is not a good start.
There are arguments against VAT but your argument is nonsensical. It sounds like you're thinking of how sales taxes work. The VAT rate varies throughout the EU so I'm not sure what you're basing the 21% on.
In most of the EU that I'm aware of, VAT must be included in all listed consumer prices because that's what the consumer pays. VAT is only excluded by default in B2B prices so yes, sometimes as a business you have to double-check listed prices to see what you'll actually pay. It sounds like you're arguing for consistent price labelling regulations (aka consumer protection laws), not against VAT.
VAT also doesn't really affect businesses. Businesses collect VAT from sales and pay it on purchases, then declare the difference to their tax agency and either pay any excess they collected or get refunded what they overpaid. It's literally a zero sum game and dealing with it in accounting is trivial on top of everything else you already have to keep track of.
The problem with VAT is that for consumers it is an inflexible tax that acts regressively in practice: because it's a flat tax on all goods, customers with less money spend proportionally more of their income on VAT than customers with a lot of money. It also doesn't apply to business expenses (due to the aforementioned zero sum) and people earning higher incomes are more likely to have access to "job perks" that convert regular expenses to business expenses (e.g. business lunches, company vehicles, etc).
If you wanted to reduce the burden on lower income households, you'd not just abolish the VAT but also abolish any other sales tax and instead raise income tax (especially the ceiling, which often lumps in millionaires and billionaires despite the 1000x difference in scale which often translates to an exponential difference in lifestyle) or (re)introduce a wealth tax (to discourage wealth hoarding and instead encourage reinvestment and commerce).
To put it bluntly, a 20% VAT translates into an additional implicit 20% income tax for all income used to pay expenses. Assuming two people make €1k and €5k a month (after accounting for all other taxes) and both have fixed expenses of €1k, the former pays 20% taxes on their €1k and the other pays 20% taxes on their first €1k and gets to take the remaining €4k tax free to invest in retirement savings, repay loans or what have you. This translates into an effective 4% tax for the person making €5k compared to the 20% tax for the person barely making ends meet.
This is why some people call it a regressive tax. You can literally take that €4k and put it all in a stable investment vehicle VAT-free. You only pay taxes on it if you spend it. The person making €1k a month will have the same 20% higher effective income tax but you will always pay a lower effective tax rate unless you also spend (i.e. purchase goods or services with) every single cent of your income.
Cutting VAT would leave you both with more money but while nothing much would change for you it would increase the poorer person's effective disposable income by 25% (€800->€1000). Heck, even if income tax was raised by a flat 4% across the board, you'd be no worse off but their effective disposable income would increase by 20% (€800->€960).
Agree on greed and education, disagree on everything else.
At least the US still has programmers - in Europe nobody wants to program anymore - too much work. The big car companies create software centres in Munich and hire thousands on Indians on visas there, because there are no Europeans available.
I have recently talked to many young people about ChatGPT and their conclusion is that technical skills are irrelevant and they should focus only on soft skills.
Well - soft skills are the most basic level - it's just what makes us humans. Some day the non-european people doing the work will figure out that they can do the managing and talking and buzz wording just as good - but that we can't do their work because we have given up on learning the skills.
> I have recently talked to many young people about ChatGPT and their conclusion is that technical skills are irrelevant and they should focus only on soft skills.
This is a hilarious take. I can reason with a junior programmer and walk through the steps to get a result. I can’t lead of team of ChatGPT bots. The only thing going for ChatGPT is it’s hubris.
Perhaps there are fewer Europeans available because they are doing the same thing in the US: making actual money instead of the pittance offered by employers in HCOL cities like Munich?
You can get 50-60k EUR in Eastern Europe these days if you know what you're doing. Sure, it's not a FAANG level salary, but cost of living is low here. So I would definitely not migrate to London if they offered 60k.
Pye Industries, UK
EMI (Electric & Musical Industries), UK
Marconi, UK
AWA (Amalgamated Wireless Australiasia), Australia
Telefunken, Germany
Thompson CSF, France
HP Hewlett Packard, USA
Kodak, USA
Polaroid, USA
Varian Associates, USA
Ampex, USA
General Radio, USA
Philco, USA
Admiral, USA
RCA (Radio Corporation of America), USA
Philips, NL - as mentioned
I used to work for RCA and back then it was the largest electronics company in the world and Philips was second. When RCA failed, Philips became the biggest but unfortunately its time at the top was short-lived.
There's several things that seem to characterize many of these failures, the first is that when founders leave or die companies often seem to lose drive and direction, and second companies become too big and diversification seems to kill their R&D/innovation.
For example, RCA lost its direction and fell apart when its founder David Sarnoff died and his son took the helm. Similarly, another spectacular failure was Hewlett Packard when its last founder died.
That said, there are exceptions such as Apple—but then it may not have been in existence long enough to tell, it hasn't been around anywhere near as long as say, Philips has. Moreover, it's highly dependent on Asian manufacturing, in the long-term, that may be Apple's Achilles's heel.
Still, I think that's only part of the problem. Manufacturing and innovation in Western countries are now in a state of malaise and they're being quickly overtaken by Asian countries such as China. Like it or not, the West generally is in a state of decline.