Why European Businesses Kinda Suck. 

To pre-empt upset Europeans. I'm a proud advocate of European businesses. I regularly bore my friends by telling them about the issues with the European economy, and how we ought to support European businesses when possible. When making purchasing products, the nationality of the company is almost always a factor in my decision making. That being said, just compared to the powerhouses of America... European business do kinda suck - Jack

One important aspect missing from this, is that unlike the EU, the USA does not use a value-added-tax (VAT). This means that if one buisness sells a product to another buissness, and then that buissness sells to another buisness and then finally to the consumer, then sales tax is paid at every step of that chain in the USA. This creates a strong incentive for vertical integration, because if you own all those intermediate companies, then you bypass the intermediate sales taxes and have a competitive advantage. In the EU with the VAT, if your business buys something and then re-sell it or integrate it into a component that you sell, you can reclaim the VAT you originally paid on that product as a tax credit or payout. This makes it actually very practical to have many small, independent businesses to create value chains where each buisness specializes on a very specific product, rather than vertically integrating into a mega-corp that owns its whole supply chain. So only comparing the large businesses between the EU and the USA can give a very skewed picture. ____________________ Also, I think the point about the unity of the US market is sometimes oversold. Every US state, and sometimes even every county or municipality in that state can have different tax regulations, reporting requirements, consumer rights, environmental regulations, etc for companies doing business there. Very similar to the EU but a bit less extreme

Those pesky worker's rights, data protection laws and anti-monopoly rules really take the fun out of business, am I right?

You work for 40yrs to have $1m in your retirement, Meanwhile some people are putting just $10k in a meme coin for just few months and now they are multi millionaires. I pray that anyone who reads this will be successful in life

I’m surprised Airbus , BP Petroleum, VW and ALDI didn’t make the European Lists

EU: - give us a finished product that's already selling - a 5 year financial plan - a 30% stake in your company - pass all regulations before you come to us = and we give you ~€1 million US: - write a good plan - find people - build a prototype - give us 5-10% stake = and we give you ~$10 million Why would anyone choose option 1?

I'm favoured, $27K every week! I can now give back to the locals in my community and also support God works and the church. God bless American .

@3:59, Using Europe interchangeably with the EU is very misleading. Europe has 50 countries, and the EU has 27. Also, Japan has around 125 million in population, but it does not stop many manuals and products coming with Japanese instruction on them.

Bruh I’m Dutch and I didn’t know that Marktplaats was owned by eBay…

Also businesses in Europe have to pay taxes at a higher rate than US companies, and in the US we are a consumer nation....

The landscape of big tech is dominated by American companies, and there are a few key reasons why. Firstly, the US fosters a culture that thrives on risk-taking and innovation. This is fueled by a constant flow of venture capital, which is essentially investment money specifically for startups. This allows even small, ambitious tech companies to get the funding they need to grow quickly. In Europe, the culture tends to be more cautious, and the investment landscape is more fragmented, making it harder for young companies to secure the resources they need to compete on a global scale. Secondly, the US boasts a massive, unified domestic market. This allows tech companies to develop their product or service for a large audience right off the bat. Imagine a playground - a big tech company can refine its concept on a vast American "playground" before taking it international. In Europe, things are more like a collection of smaller playgrounds, each with its own language, regulations, and consumer preferences. This makes it more challenging for European tech companies to scale up to the level of their American counterparts. Finally, the regulatory environment in the US is generally more favorable to tech companies. While Europe enforces stricter regulations on data privacy and competition, which are important for consumers, they can also stifle innovation and growth for young startups. Think of it like training wheels on a bike. While they help you learn, they can also hold you back from reaching your full speed. The looser regulations in the US allow American tech companies to experiment and grow rapidly, although this advantage can come with downsides that require ongoing scrutiny.

Are mega corps a good thing for society?

In fairness, the Silicon Valley mentality also tends to cause quite a lot of economic chaos. For example by _"Blitz-Scaling"_ new business models like Uber and AirBnB, bankrupting all the traditional competition, and then jacking up the prices again. So maybe Europe is better off without that.

If you do a sector wise comparison, European companies are competitive. Pharma, aircraft, fab equipment and so on. The difference is in the software sector, which is also the most profitable sector by far today.

Facebook is a really bad example. They swept through Europe like it's nothing. So, you can build a product that is markable in all countries. That's not really the issue. For the language barrier: Go for English first. You still also have access to the US market from the EU.

Europe and the EU generally are pretty bad to get a business started in. Even if you have an amazing idea you have to start small, and being small is just un-affordable given the tax systems in the EU/UK etc.

This video was about 20 seconds of actual content plus 8 minutes of padding

Two observations, as an American who has spent many years in Europe: 1) Europeans commonly hold the idea that America is one big homogenous culture/market. This is not true. At. All. While it is true that the U.S. market is more integrated than the European market, it still possess and must cater to wildly different cultures. This is particularly notable between large cities (NYC, Washington, Atlanta, Chicago, Dallas, Austin, etc.) and rural areas; indeed, that's probably the single largest driver of our current political polarization. Even beyond that division, however, different regions are very distinct. As someone who has moved from Washington, D.C. to Chicago to, most recently, Atlanta, I assure you that those three cities are very different. The market reflect that. As a concrete example, I'd never even heard of a Publix or Krogers before moving to Atlanta. Here, they are _the_ dominant supermarkets. 2) In my opinion, the European market remains far more fragmented than it needs to be. The fact that companies need to set up a separate headquarters in each individual European state, with different logistics, different management, and different inventories, boggles my mind. That creates an entirely unnecessary layer of management, with all the inefficiencies which it implies. As a concrete example, there were many times when, while living in Barcelona, I couldn't find what I wanted on amazon.es, but lo and behold, amazon.fr or amazon.de had the item in stock. Could I order from them? Sure, but delivery cost three times as much and it would take four times as long to arrive. For a smaller European competitor, that's a huge barrier to overcome. European policy, it seems to me, remains focused on protecting the domestic industries of each individual state at the expense of encouraging a genuinely European market. Changing policy to encourage a continent-spanning market, with companies identifying as European rather than German or Spanish or Hungarian, might do a great deal to improve European productivity and boost European companies. I _want_ European companies to compete on an even footing with American, Chinese, and (eventually) Indian ones. I _want_ the E.U. to form a third pole of geopolitics. The first step in that process will be to stop thinking of business and politics as German or French or Polish, and start thinking of it as European.

The US has the most and most liquid capital market in the world. Basically, not only does the US have the most capital for startups and expansion, but the capital can be mobilized and utilized much, much more easily and quickly. That is significant.

Europe does a better job of preventing monopolies?

Ah, another thing to consider in your argument: a big chunk of the US might in tech comes from the US military & intelligence massive investment in the sector. Europe’s mini national militaries have absolutely no chance to compete. Europe is basically held back by its own internal division, because every freakin’ village on the continent thinks they are the best and they should be their own country. 😂

I don't think you need to translate your software into all of the European languages. I live in Finland and I see people use their devices in English all the time and that's what I do too. Maybe you do in France or Spain for instance where less people can speak English. But I've seen enough people use tech in English here that it might not be necessary and to me Finnish translations feel more annoying and frustrating than useful anyway.

It's completely false that American companies don't have to worry about local regulations. The fifty states in the USA have a lot of autonomy and each have different regulations on companies. You might see things like different warranty or privacy policies based on the state you live in (for example in California you might see something in your contract saying you have the right to see exactly what info is being collected about you, as well as your right to have them delete it).

I don't think that large companies are good for the economy. They mostly concentrate wealth and power in fewer hands. I think that most of those large tech companies need to be broken up. In general I think that almost all large companies should be broken up. They make the GDP number go up, it may look cool to some people to see a single company worth so much but it is bad for all of us. Europe seems to have a lot more smaller and mid size companies.

I'd like to see the total years in business of the "Magnificent 7" compared to the youngest "granola" company.

This misses a huge factor and that is how entrepreneurs are taxed. In the UK, someone who creates a new product that changes the market and creates thousands of jobs has to give almost half their income in tax for the privilege. Relocate overseas and they keep most of what they earn. And Europe is not trying to reverse this trend, so we are seeing 1% to 2% GDP growth, which is mostly supported by immigration and not increases per capita where the USA and developing world are seeing double digits.

It is also worth noting that investing is different in the US and EU. In the US there is a lot of speculative investing and a big expectation of share price growth. American companies will even forgo dividend payments entirely in service of this share price growth by reinvesting profits. This leads to the massive market capitalisations. European investors, on the other hand, often prefer to receive steady income through dividends, and this is what European businesses target. European stocks therefore often have greater yields than US counterparts.

5:10 - Ebay lost to a local Allegro in Poland, because Allegro is so much better, even Amazon doesn't do as well as Allegro. Not even close. Why didn't they buy Allegro?

Is not diversity is suppose to be a strength?

In addition, Europeans and politicians really have look with disdain to people trying to earn a lot of money on their own efforts and risks. It is almost a crime and and most countries are stuck in collectives and income equality. This means you get manhandled from every angle especially taxes (you are not a large multinational yet so you wont reap those tax benefit's) you get discouraged at every corner when you even try so it is better to start in the USA and go to Europe. In addition you also need to arrange stuff before you do it where as in the USA there are a lot less rules and you can do everything and fix stuff later and as a bonus the consumer laws are very good in Europe e.g. 2 years guarantee, right of recalling etc which makes stuff expensive. Labor laws, again expensive if you hire the wrong people you will have to pay a lot! and to finish it off 1001 Carbon emission laws which makes everything expensive and 10% EU tax on stuff outside the EU (e.g. almost everything since there are little to no factories here anymore). I did not include high real estate prices those also count for the USA.

I don't think the market barrier argument is a good reason European companies can't scale. All of these companies are global players. They all have to localize their products for 180 countries. It might give American, Japanese, and Chinese companies an edge in growing from small to large. But once large, it doesn't do much to help with growing to behemoth. I think it's 3 things: Compounding first mover advantages, worker compensation methods, and the more of a startup culture. America was the first country with a massive financial market. Britain, Germany, and Italy have older markets, but they operated on smaller scales. This means American companies have access to more financial capital to grow quickly. Foreign companies have incentives to work with the American market to access some of that capital, but American companies don't have nearly as much of an incentive to work in other countries until they've saturated the American market. This cements the American financial system as the most powerful in the world giving American business a huge boost. America started the computer tech revolution (with a lot of help from Britain). All of our largest companies today are in computer tech or financial services. For a long time, the best talent in computer tech from all over the world was drawn to Texas, NY, and California growing American business rather than their home country.

Ah of course, ASML would sell their $100m photolithography steppers to more ordinary people if only there weren't the language barrier...

This video mentioned only minor factors. If you want to understand the actual reason why these American companies dominate, it’s innovation. They are creating the technologies that are driving the global economy forward. Look at Europe’s largest company? This same factor holds true. Tremendous innovation. If a company innovates and solves a problem or improves quality of life, money will flow their way. There’s a culture that focuses on researching and inventing in the USA and the people with the money to fund it are right beside it. The smartest people flock to this area to make their ideas come to life. I saw a documentary recently where Germany is trying to cultivate something similar to Silicon Valley. It’s good they are doing that. A strong Europe is good for the world.

The US maximises growth at any possible extent. One example is immigration. The US has good future prospects which is why people invest, europe is full of declining population former communist nations that don’t speak the same language and don’t want to hurt their culture. Not a good place for growth. Investors don’t care about culture or the crime rate. They only care about if a number increases. The US doesn’t care about national identity, culture changing, demographic shift, etc. meaning that the US will grow. The more globalist you are the better.

Don't forget that with top stocks the stock price isn't well connected with actual value created

This is just economies of scale. In many sectors, a bigger company means a more efficient company. This is especially true in high tech. E.g. you spend the same R&D money to develop your electric car, whether you sell it to 1 million or 1 billion people. In a globalized world, the bigger players, i.e. China and the U.S., dominate the high tech sector. The other countries provide cheap labor, natural resources, and luxury goods (e.g. french LVMH, german cars). Because their smaller economies cannot compete with huge economies on R&D. No wonder the U.S. have promoted free trade for decades. Like a fat kid challenging skinny kids to find out who is the heaviest. Now that China is becoming heavier than the U.S., the U.S. no longer want to play.

After having lived in both systems, and also in Switzerland it all really comes down to mentality. American children are taught at a young age to do/be anything they want as long as they work to achieve it whereas European society is more about making the safer option, where dreams and aspirations are limited and guided by the parents and society. It stifles the ability for people to be more entrepreneurial and risk taking with investments. The problem is cultural. To sum it in a few words "scared money don't make money".

Looking forward to Tim Apple's next AI announcements

you can sum it up in the fact that - we're all watching this on RU-vid, not Dailymotion

So basicaly american tech companies buy emerging europan companies and Europe dosent have massively overpriced mega tech corporations that destroy any competition by shady practices ( for example have you ever wondered why basicaly any computer comes with windows? ). Honestly the only critcism i have here is the not enough stomping on american companies by EU ( and they already are the only ones even trying ). What i would really be looking for i was to criticise europe buisnes would be to look at the massive state owned companies dotted throughout Europe. Those are shady AF . In Poland where i live mostly used as a retirement for politicians.

1. Access to Capital 2. Regulatory Environment 3. Labor Force Skills 4. Apprehensive nature to startups

A lot of EU (and Canadian, Australian, etc) tech companies end up doing business primarily in the US due to the larger homogenous market, higher incomes, higher levels of investment into productivity (e.g. into SAAS products), etc. I work in tech in Canada and the past 3 companies I've been at have focused almost exclusively on US customers. The bureaucracy and language barriers of the EU make it difficult to make money there while the vast distances make moving any physical goods prohibitively expensive in Canada and Australia.

Bet you didn't realize my dude is wearing two different t-shirts throughout the video 👀

I don't think it's a very honest comparison thought. Because market valuations in tech companies are often inflated. Are we really supposed to believe Facebook (Meta) is a valuable company. What value does Facebook offer in reality? While you might have have a manufacturing plant or something like ASML that actually add value to society, and they couldn't be recreated by just anyone, and yet their market cap is supposd to tell us they are comparatively worthless? Market valuations are driven by nothing but marketing, and businesses that sell to consumers tend to get more hype, while businesses that do B2b don't get any hype because the general retail investor doesn't know about them.

Well, when you start business using other country's currency. there is no way you can win unless they throw some bone your way. For US companies to explode big, their hedgefund got access to easy USD. In Europe, fund and bank has to trade for those dollars. It's not a rocket science.

I wouldn't judge a company's "success" by market capitalization.

You forgot that also Europeans companies also employs well payed European workers whyle 99%of the employers of Big American companies are Chinese or Indians who are pays 5 time lower wages then their European counterparts. What if let's say Apple would have move their factories from China to Detroit. Their profit would be smaller becouse now instead paying a salary of 30k for a Chinese worker now they would need to pay 80k for a American worker.

Market cap isn't scale. It is to some extent an ability to scale.

There's also taxes and regulatory intrusiveness. No one wants to start a company in Germany, end up paying 50% income tax and be forced share power with a union to boot.

Them damn workers rights and living wages, how dare europe do that when the €1trillion companies could be worth €3T instead 🤣🤣

If you wanna save 3 minutes, starts for here 3:11

Because 1. The US companies has a huge fund to bail them out if they suffer ( The US government) 2. The EU has a different landscape than the US. The EU does not have such a large focus on fuel and tech as the US and the middle east. 3. Some of the most successful EU businesses actually pays corporate taxes.

America focuses on more productivity per employee. Eu business wants less productive employees to increase employment

It's quite funny how in this video not once has it been mentioned that ASML is actually one of the most important companies in the world, tech and politically wise.

Another reason is ease of lobbying, easier to lobby us lawmakers than eu law makers.

Who wants to get sued and taxed to hell??

I came to Europe to try and expand our business and we've only managed to make a 6% growth in 2 years while in the US we grow 25% each year. The "euro market" is a joke at best, lie at worst

Why American workers rights do kinda suck

3:20 The language barrier is BS Basically everyone working in Europe's big companies speaks English , we all learn it ... 3:40 That is a bit more valid , but the EU common market has reduced that by a lot 4:33 Again, thats BS , as all of us Europeans basically use American social media apps ... the concept of a social media app "specializing" in a specific country is ridiculous outside of China The question is , why is there no European social media app that captured the entire world , and basically all social media apps that have done so , are American ... the existence of multiple countries in Europe with different market preferences CANNOT be the answer if everyone in Europe uses basically the same American social media apps

Tesla I love your cars but your stock keeps breaking my heart.

You forgot anti-trust laws, that are way stricter here.

What's interesting is that virtually all american tech giant companies depend on ASML tech.

Because corporations do not own the government in the EU, but they do in the USA. Getting free money and regulations cartering specifically for you helps a bit.

You danced around the real issue: TAXES. Nobody wants to give up 50% of profit. Also tech professionals would rather immigrate to US to get higher salaries rather than pay 55% to the government.

Europe trying to prevent monopolies… by putting in so many regulations that make it impossible for newcomers to create companies, on top of all the other barriers EU startups already face compared to US startups? Is this an oxymoron? The problem in Europe is that it somehow managed to Out-California California… in the entire continent instead of just one state/province. The one thing California has going for it. At least it’s still got that entrepreneurial environment.

Thankfully EU is strong enough to force changes in big tech, like they did to Apple to force more customer friendly attitude

In Eu companies cannot fire workers easily like US, hence not able to adapt quickly or take risks.

It’s not surprising that the European business are not doing as well as US. European business target limit range of consumers, requiring significant strong financial ability in order to partner in together with other companies. Strong industry such as bank and finance do not get people into the door if the initial investment or deposit is not enough. European bank focus on risk management, since the gain of the company after loan is paid is literally no connection with the investor or bank. Therefore, when banking do not facilitate business investment. It’s very difficult for local business to go international. In Europe, most transactions are usually one time transaction. But Asia and North American transaction are constant and consistent

I can assure you, America culturally is not homogenous at all.

Have you tried starting a business in Europe (UK excluded), especially countries like France? It's like they are going out of their way to stomp out anyone trying to launch a startup. It's not wonder we don't see companies like Apple or Microsoft coming from Europe. The entire small business approach by European governments needs to drastically change. Big companies don't start big, they start small and if there's no environment to foster the establishment and creation of small compaies, Europe will continue to lag behind other parts of the world. I've built startups in NA and in Europe and let me tell you first hand, there's no comparison.

Also, as long as I have worked Almost every European from every other country is lazy except Brits and Germans and a few Scandanavian countries

ASML is an amazing business. Do not underestimate that company.

I like how this guy assumes people and seattle and people in abilene arent as different as dutch and germans

They are top businesses by the metrics the USA values, stock prices and nothing else.

For the sake of a healthy economy, we need both big and small businesses. The problem is - they are all suffering right now from over-regulation, sky-high energy prices (hello, Green Deal) and barriers between local EU markets (different regulations, languages, etc.). What the EU needs is a more common market with less regulation - not the other way around, which is what we're getting now. We either fix that or become irrelevant at a global stage.

He forgot to mention that Europe is running a trade surplus, while the US is running a huge trade deficit. Which I think is kinda more relevant than the size of the businesses in the country?

Language/culture barrier isn't a problem for the FAANG stocks in Europe. Europe is just not competitive and it is a 3rd rate power

Prefer less monopolistic and more worker friendly European companies

You never know though. In the 80's, Japan's market cap in the world was over 50 percent. You never know when a bubble will pop up. Invest at least a little bit into the world index.

one of the first points is not right. us-companies make tons of revenue outside the us and thats why they indeed have many different markets where they need to meet the requirements

Wait Nestle isnt american

Can TLDR Business make a video on Novo Nordisk alone?

3:45 Bogus point: None of those big American companies operates only in America. "There's also more regulation in Europe." Gee, ya think? Over regulation is the biggest problems businesses have. When you spend so much of your time trying to satisfy government regulators, you don't have enough time to mind your business.

Unlike to US, Europe has fairplay restrictions and anti-monopoly laws

We also don't have a unified postal system, so buying and selling things is more complicated ...and it takes longer for things to arrive, leading to local businesses having an edge.

I don't think the unique regulations in each European country is much of a disadvantage for European companies compared to American companies, because each US state has its own regulations just like the European countries. This even applies to a much lesser extent on smaller levels, for example a lot of counties and cities have their own environmental regulations that impact business operations. My county placed a 5 cent tax on every plastic bag, now nationwide grocery stores have to operate differently here than in other parts of the nation

Should it really be the goal of a society that a lot of its value should be stored as expected profits from private business? Is it even desirable as a means to an end?

Size of companies doesn't mean anything. Germany always had more a focus on small companies and Mittelstand. That makes companies in terms of work-conditions much better than global companies. Global companies are more and more struggling with hiring and skilled workers in germany, because MANY people are sick and tired of their unsocial expectations and high pressure and buerocracy and way too many additional management-tasks that you don't have in Mittelstand-companies. If you look at statistics on qualitative wealth statistics and soft economic factors, your ranking will look completely different.

MURICA ! FUCK YEAH! COMING AGAIN TO SAVE THE MOTHAFUCKIN DAY YEAH!

Every time you make videos like this it really shows me how ununited the European Union is

Europe needs to create better unity; to push a narrative of what it means to be European and not simply just French/German/etc… A new/ancient language should be used as an official vernacular. Latin for example.

3:59 I don't think this is actually as big of a reason. American services tend to do great in Europe, German cars are popular worldwide, ASML has a near monopoly in its field. I think Europe has basically made a tradeoff to attempt to be a bit more socialistic (not in a bad way) than the US at the cost of growth of its businesses. The US has decided that making more money makes more sense to us (cultural difference) and tries their best to support businesses more. Neither is right nor wrong, but both have significant tradeoffs

This is overstated. I personally couldn't care less about bragging rights of European businesses who are just as bad when it comes to avoiding paying their fair share of taxes as their American counterparts, but most large US companies mentioned are monopolistic, rent seeking, defacto unregulated utilities, who's business model relies on putting Main-Street out of business and arbitraging workers rights. Of all the companies mentioned it is ASML that is the best and that is European. They are the closest to the "flying cars" in "we wanted flying cars, instead we got 140 characters". Am actually useful and productive company as opposed to an endless pointless content machine that on balance probably does more harm than good (no offense to this channel or YT which I avidly consume). But granted NVIDIA is also another actually useful company. Besides judging companies based on valuation is a misnomer, most are grossly overvalued by their own admission and of course the companies listed on the exchanges with the deepest capital markets are more likely to have higher valuations. We should judge success by what they are actually positively contributing in the real world. Thanks for coming to my TedTalk

The europeans with the adventurer mindset moved to the US where this is still celebrated.

Is it really a problem, if the European companies had targeted USA customers first which are more homogenous? Only because a company is European, it doesn't mean they need to target all European countries. Especially if it's technology.

Tesla has 2x market cap of Nestle yet roughly 0.6x earnings. Us companies are in general much more richly valued compared to european ones. Us companies are trendy, propulsive while european ones are in legacy industries. Meta has 2,5x earnings of Nestle yet 5x its market cap.Even starker examples are BMW, VW and Mercedes who sell for couple of years earnings.

One take I haven't seen people talking about is the fundamental problem within the question. 'European' would entail that these companies are operated throughout the contenant which they very much aren't. These companies are French, British, German, etc. This argument I feel is backed up when looking at when a truly European company is compared to an American one. Airbus compared to Boeing is a shining example that when you have a European company they are better in every way when compared to their American competitor.

The biggest investors are US-American and they clearly also do have a home bias when it comes to looking for investment opportunities, understanding businesses, and evaluating risk

Well, is the idea to have a BIG, powerful champignons group of companies or many that are small to mid size? Because honestly, even without such big champions, Europe is doing fine.

So language and cultural barriers prevent scaling within EU, yet US companies scale globally with even more language and cultural barriers ?! I doubt this particular one plays a role in EU lagging behind.