[eekfuh]

I don't want to sound like "that guy", but isn't this why there really aren't very many startups/innovations coming out of EU?

That sense of entitlement and cushy job seems to prevent people from taking risks. They'd rather just coast.

[angersock]

As far as startups go, I'd imagine that it's more a function of available capital--and even then I've heard good things about startups out of places like Berlin or London.

As far as innovations go, you should go look at the demoscene and a lot of the goofy but useful JS libraries to come out (say, three.js which I believe is Spanish in origin). So, again, I'm not sure where you get that from.

  That sense of entitlement and cushy job seems to prevent 
  people from taking risks. They'd rather just coast.

As opposed to all the hardworking American office drones that only take ~2 weeks a year? Also, what's this business about a "cushy job"? Wouldn't you want workers to be happier and thus more productive?

Why do you seem to be implying that there is a moral highground to more strenuous and miserable work?

[OstiaAntica]

High marginal tax rates in Europe take away the incentive to create a startup, and the governments there confiscate much more of the winnings from successful companies. That, in turn, ensures that there is little venture capital to invest in the next generation of startups.

[VBprogrammer]

I strongly disagree. I suspect you are looking at this from the 'American Dream' capitalist point of view. Our tax rates might be higher, but this is more than balanced out by our strong social security and healthcare systems which allow us to take risks a silicon valley startup couldn't dream of.

I can only speak for the UK (and lumping all of Europe together is pretty foolish given that it has a range of countries from borderline 3rd world to international superpowers) but in London the tech scene is very much alive and well. I myself work for a middle aged startup (going through some horrible growing pains just now), I love to get involved in the London tech scene and I've talked with plenty of people doing well from startups.

[davidandgoliath]

Strong social security like in Greece? At some point the system isn't going to assist you much when it doesn't exist. Nor will capitalism either, as we'll all be flying kites made of dollar bills inevitably :)

[cluda01]

Well Greece's case is a strong social safety net coupled with rampant tax evasion. A better and to pick in my opinion would be Germany. They have a high tax rate and are an export machine as I understand.

[Retric]

Much of Europe has similar effective tax rates as the US. The difference is the US tax rate is taken out in a lot of separate taxes at the SS, Medicare, Income tax (federal) + State income tax, sales tax, property taxes + local sales taxes, property taxes. Plus Debt and a wide range of fines and fees. Where Europe has no EU wide taxes and it's all taken out at the 'state' and local level.

PS: Per person the US government spends as much on healthcare as many countries with 'national' healthcare so we are paying for it even if we don't have universal healthcare.

[zeroonetwothree]

I don't know what you consider "similar", but the US does have significantly lower effective tax rates (by 10-15%) than most of Europe: http://www.economist.com/blogs/dailychart/2011/09/effective-...

[Retric]

That's simply ignoring state and local government spending. Ed: And possibly Medicare. It's also ignoring the 50% of company matching medicare which is paid by the self employed.

http://www.usgovernmentspending.com/numbers?units=p

PS: As a sanity check. Federal (24.33 GDP -3.72%GDP given to the sates) State spending is 8.97% of GDP, local 10.69%, which adds up to 40.27% GDP. Note: Actual revenue is only 32.61% GDP because we are just borrowing that much money but debt does get paid back one way or another. http://www.usgovernmentrevenue.com/year_revenue_2012USpn_13p...

[rmc]

the governments there confiscate much more of the winnings from successful companies

What? Citation needed? In some countries they give money to startups, not the other way around.

And how you you explain "high tax rates" when Barack Obama refers to some countries in the EU as a tax haven?

[amit_m]

You cannot base a good argument on two data points. I suggest a 3rd point which I believe is a counterexample to your hypothesis:

Israel has more startups per capita than any country in the world, but has socialized working laws. The legal minimum is 10 (I think), the exact amount for engineers varies from company to company, but it's usually at least 15-18 days of paid vacation per year with some of the bigger employers offering 20-30. We also get 3 months maternity leave, several months of unemployment, etc. Not as good as France or Holland, but much better than the US.

I'd say the approach of the US with regards to anything social can work against risk taking. e.g. Healthcare.

It's much easier to take risks when you have a social safety net.

[davidandgoliath]

But as a nation you also receive massive amounts of foreign aid, thus have an even larger safety net: someone else is funding a good % of your bills.

At some point that also has to be accounted for when taking into account a country's economic conditions.

[amit_m]

So you think only highly prosperous countries can afford vacation days? I believe that among western countries it's more about priorities and who is pulling the strings - if it's the regular folks who have power through their vote or the company owners, who use lobbying firms, campaign donations and control of the media to abort any legislation mandating vacation days, etc.

Western europe has used its economic prosperity to get more vacation days over the years, maternity leave, free education and other social goods. While in the US it seems to work in the exact opposite direction.

The extreme case is France, where they seem to be on constant vacation (>60 days!), get free university education, excellent free healthcare and all the good wine to the great dismay of the Chicago school economists that keep predicting its imminent collapse year after year.

Israel's history is also a counterexample, as it was very poor in its early years (1948 - 1980s) and much more socialistic than it is today. Surely Israel can afford MORE vacation days and other social benefits today than it could 40 years ago. But the trend is exactly the opposite. Unfortunately we have a US educated prime minister.

---

About the magnitude of US foreign aid to Israel and its role in the economy, here are some numbers:

Total US foreign aid to Israel: about 3$ billion / year. [1] Total israeli budget: about 100$ billion / year. [2]

Even though this is serious money, canceling the US foreign aid would not make a huge dent in Israel's budget. e.g. 3$ billion can be taxed by increasing the VAT from 16% to 18.8%. [3]

In addition to that, as someone who watched how this foreign aid budget is spent in the military, one dollar of foreign aid is worth MUCH LESS than one real dollar. Since goods must be bought from a specific purchasing catalogue, and this catalogue is both limited and has highly inflated prices. e.g. more than 2500$ for a standard IBM desktop PC.

I think this follows partly from the requirement that at least 50% of the manufactured goods must be made in the US. So many products are made in China, then shipped to the US for repackaging (where their price is doubled) and then shipped back to Israel.

Note also that a large part of US foreign aid goes to purchasing very expensive fighter jets (F-15, F-16) and spare parts. A hugely important goal of the Israeli air force is to have more F-16 planes than the egyptians have. But the Egyptians also get their aircraft from US foreign aid. My interpretation of this state of affairs is that main reason congress is backing both sides of this arms race is in order to take taxpayer money and give it to the military-industrial complex.

Sources: [1] http://en.wikipedia.org/wiki/Israel%E2%80%93United_States_re... [2] (sorry, hebrew only) http://budget.msh.gov.il/#00,2012,0,1,1,1,0,0,0,0,0,0 [3] http://www.ynet.co.il/articles/0,7340,L-4234752,00.html

[dennisgorelik]

3% GDP economy boost is a lot.

Update: Sorry, 3% of budget. It's less than 3% of GDP, but still a lot.

[amit_m]

3% of the budget, not the GDP! I am not sure it makes too much sense to divide it by the GDP.

Israel's GDP is around 250$ billion. So US foreign aid is around 1.2% of GDP.

However, as I mentioned in the previous post, this aid does not come in the form of actual dollars but in the ability to purchase goods with highly inflated prices and some strings attached. I'm pretty sure Israel would happily trade 3$ billion of US foreign aid with 1$ billion of actual money.

[davidandgoliath]

All valid points. Israel is definitely becoming a force of it's own in the tech. sector, and I'm extremely glad to hear of it's flourishing VC ecosystem as well.

re: vacation days & prosperous countries -- no, I don't believe the two go hand in hand (poor folk get all kinds of vacation days in the form of funemployment), nor would I consider the U.S. on average a 'prosperous' nation, I'm merely stating that had the U.S. suddenly had outside funding for it's military for the past ~$x years there'd be far more liquidity to spend on other things like one month vacations for everyone.

[rmc]

0.5% of the US federal budget goes to Israel as aid money. That might skew the figures a bit.

[skurry]

I found that number hard to believe, so I looked it up. In 2007 (the most recent figure I could find) the US sent $2.5 billion to Israel. The total budget was $2800 billion. So it was more like 0.09%.

[rmc]

Huh. My source was the New York Times ( http://www.nytimes.com/2012/07/08/opinion/sunday/the-coffin-... ) who stated " all foreign aid accounts for about 1 percent of federal spending — and that includes military assistance and a huge, politically driven check made out to Israel, a wealthy country that is the largest recipient of American aid. True humanitarian aid constitutes roughly half of 1 percent of the federal budget" so I thought it was ½% of US budget went to Israel.

[bgilroy26]

"Federal budget" is a multivalent term. It's more likely that 2.5 billion was .5% of discretionary spending for that year.

When you take the prior obligations of Social Security, etc. the budget gets much smaller.

[cbr]

I think you're misreading the quote. It says foreign aid is 1% of federal spending, only half of that is true humanitarian aid, and the country that receives the most aid, humanitarian and not combined, is Israel.

[rmc]

I'm an EU citizen and have worked (and am working) in several EU based startups. I know I can take a job in one or any of them and not lose my holidays and health care. Big companies don't really offer perks like this here (lots of holidays or health care), so why would I want to work in a cubicle? There's an employee shortage, and mandatory holidays means that a start up is as hard work as a megacorp.

[beedogs]

I am so sick of hearing Americans tell the rest of the planet that "not wanting to work yourself to death" equals a "sense of entitlement".

Can we please take this tired, idiotic old meme out back and put a few rounds in it?

[abalashov]

I'll get the silencer, lest Middle America hear. :-)

[nl]

Well there is Spotify. And MySQL. Skype. One can keep going...

The difference between the US & Europe appears to be Silicon Valley, not a sense of entitlement and cushy job.

[kalleboo]

On the other hand if you join a startup in the EU vs. the US, you're nor forfeiting a health plan, and even if the startup goes bust you have the social welfare system to ensure it doesn't put you on the streets.

So I imagine it hinders people from creating startups, but at the same time it helps hire people into them.

[ckrailo]

Perhaps. Tell me what you think of this article: http://www.inc.com/magazine/20110201/in-norway-start-ups-say...

[pimeys]

I prefer good life over innovations. But that's just me...

[derleth]

It would be great if you could defend your position without using the logical fallacy of the false dilemma.

[teamonkey]

I think his comment has more insight than you give him credit for. I would say that culturally, Europeans just care a lot less about startups (and business and money making) than Americans. I think that's the biggest reason why they're less common in Europe.

[Qualifier: I am a European now living in North America]

[cjy]

Also, it might explain why youth unemployment is so high in Europe.

[kahawe]

Hello from Europe! I think you are vastly under-estimating the startup scene over here... but granted, being quite far from the Valley surely doesn't benefit them; the whole Internet and IT are very much focused on the Valley and NewYork due to historic reasons, if you ask me.