Why doesn’t Europe create any Google or Apple?

This is my latest contribution to Entreprise Romande. In the middle of my accounts of In the Plex, I think it is an interesting coincidence. React if you wish…

ER-Aout2015-EuropeanGoogle

Why did not Europe create Apple, Google or Tesla? Or should we say, why don’t we have Steve Jobs, Larry Page and Elon Musk on the old continent? Innovation is complex and success comes only as an unlikely alignment of planets that are a product, a market, founders and a team they have managed to assemble, capital, and even a favorable macroeconomic situation. Also we cannot ignore in the success of a start-up, the luck factor involved in this unlikely combination.

The recent and great biography of Elon Musk [1], the founder of PayPal, Tesla Motors and SpaceX describes in an exemplary manner how a migrant from South African origin, who could have been a very brilliant student, took risky decisions with a nearly inhuman focus to build businesses that might change the world. We must of course be wary of the myth of the superman that Silicon Valley tends to highlight. All the success of the new Steve Jobs will depend upon a favorable and highly efficient environment. But why Europe and Switzerland create so rarely similar “role models”? We have of course Richard Branson or the Hayek dynasty and recent analyzes show that Europe has its “unicorns” [2] but the comparison shows a “shy” Europe. So why?

The serious and competent analyst will explain the multiple benefits of the United States: a discreet but substantial public R&D, particularly in the military field, a highly efficient capital market, a homogeneous and sometimes protectionist market, and a devilishly aggressive policy and economy at the limit of imperialism. But the pessimist pamphleteer may also see an aging (precisely) old continent where migrants are seen as a threat – whereas they are the lifeblood of Silicon Valley – and more seriously a lack of ambition of youth, encouraged by a society with dreams dying off.

The roots of our weakness are deep. We say to a young graduate still full of dreams to go and learn from the private sector to acquire skills and experience. But is there any European company with dreams of electric vehicles and interplanetary travel? Worse, we say to the children first and foremost to integrate well and we forget to let them dream further. The school does not encourage the crazy adventures and in this environment dreamers quickly fall from the stars on dry land.

Five EPFL start-ups have recently been sold (Sensima, Jilion, Lemoptix, Composyt and Aïmago) to the satisfaction of their founders and many others will be delighted to build strong SMEs with fifty employees or so. But when I tell them that in the United States their counterparts dream of changing the world, they look at me with a funny look. They tell me as their investors that we are not on the same planet and that the German and Swiss model of SMEs is a beautiful alternative. The ambition is seen as arrogance and an engineer does not like uncertainty or risk of failure.

So much unnecessary suffering for the rare exceptions. Some of them face advisors or investors, sometimes incompetent, mostly benign but having references only to our modest success. “Prove that your first model can work here.” “Do not go looking for too much money.” “You’ll lose control and you’ll be replaced.” Not to mention the finicky reading of business plan. Everyone should know that they are only the expression of a vision. To the point that I sometimes advise them to leave if they are ready to do so …

I will remain optimistic because Skype and Spotify are recent encouraging counter-examples and Europe took the measure of the threat, I think. I will mostly remain optimistic because entrepreneurship is a matter of exceptions and I meet young people who still have some dreams. But please, do not turn them off!

[1] Elon Musk: Tesla, SpaceX, and the Quest for a Future Fantastic Ashley Vance; Ecco – May 2015.
[2] http://www.bloombergview.com/articles/2015-06-16/europe-s-tech-unicorns-are-so-tame

6 thoughts on “Why doesn’t Europe create any Google or Apple?

  1. Yannik

    Elon Musk himself explains it in his book “Zero to One” in terms of aspirational states. He says that Europe is *indefinite pessimist* – Europe has a bearish view on the future but no idea what to do about it. Because europeans think the future isn’t bright, they have no incentive to take risk in big bets and dreams.

    Reply
  2. Seb

    Cultural ? Is this the answer to the question ?
    It’s clearly not. I am afraid I don’t have time just now to pick the best publications but Strategy research in this domain is very rich and it really shows that this has nothing to do with availability of funds or culture.
    It’s an actual strategy of innovation.
    The US have chosen on purpose the frog-breeding strategy : huge number of tadpole with equal chance and we only need a very small proportion to make it to maturity for the whole system to be beneficial. As a result: thousands of start ups are founded, 99% of them die before maturity, but it’s ok because it’s cheap. And a rare gem pops out every now and then, by chance like Tesla or Google and the system gets rich !
    Europe’s chosen the mammalian breeding strategy : very few offspring, but they are groomed for years and many of them make it to maturity.
    The mammals strategy was good in the past, when the frogs were not so big and they remained on the other side of the ocean. But suddenly, the frogs have grown wings and they came across the ocean to feed on the mammalian’s green grass, with not much left for them to feed on.

    It’s not culture. It’s a better governmental strategy enforced by the right legislation (positive incentives).

    Reply
    1. Hervé Lebret Post author

      I respectfully but strongly disagree… as I said there are many reasons, but claiming it has nothing to do with culture would be a big mistake. I still very much like your frog vs. mammal explanation. If it was governmental only, it would be so simple to copy… (unless you agree it took 50 years to achieve)

      Reply
  3. Jose

    There is a profound difference in terms of attitude between the US and Europe. In the West Coast, especially San Francisco region they truly believe they will change the world. No matter if you are a post grad student at Standford or a CEO. In Europe, people’s ambition remains more personal and locally centered. It is probably a matter of ambition.

    Reply
  4. Oceane

    Very interesting reading!
    Could I suggest adding social share buttons in your blog articles? This is also somehow what we can learn from SV – young talented people with dreams & ambitions and their work & start ups need to be well recognized and encouraged by the society.

    Reply

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