EU competitiveness: Looking ahead [pdf](commission.europa.eu) |
EU competitiveness: Looking ahead [pdf](commission.europa.eu) |
It's a shame, then, that they are unable to make attractive economic rules, and organize in a way that can sustain them.
Specifically as it pertains to EU economic planning, they have a fundamentally bad philosophy for encouraging business.
In most EU countries, they try to encourage innovation largely through grants and subsidies. In other words, they try to pick winners.
Instead, they should do what works: cut bureaucracy and tax breaks. No one wants the headache of starting a business here. And the few that do, against all odds, get something off the ground, quickly move their corporate headquarters to more tax friendly nations.
Denmark, Switzerland, Estonia, and Ireland have all been more successful in encouraging new innovation and also happen to have the most attractive tax breaks for innovative businesses and some of the easiest business rules. They, too could do more here. But it is obvious what works and what doesn't.
Grants and subsidies cannot make innovation. Picking winners never does that.
I am not an insider who has any special knowledge of the motivations of companies exiting Europe, but I suspect that those companies are at least as worried about regulatory uncertainty as they are about tax rates. The EU has a history of suddenly killing 'undesirable' business models and products through regulation. The EU also seems to make it generally difficult to scale up and scale down businesses, due to labor market regulations; if you're having a rough spell, you basically can't lay off your least productive workers and try to 'regroup', you might as well just sell off the productive business units, and shut down.
I think you're trying to refer to the Digital Markets Act indirectly at least with part of your comment.
Actually, I mostly believe in this regulation. Gatekeepers are a new kind of monopoly/government. This, too, discourages innovation. The US should have a spine against these companies. I'm glad the EU is, at least, trying to.
It also doesn't really affect small business. Or, indeed, helps them. I hope they can, in the end, force Apple to allow more than safari browser on iphones so PWAs can be a real thing.
GDPR, on the other hand, is hell for small businesses. It's complicated and scary. Understanding and implementing the rules is expensive. It's broader than you think - restaurants, for example, are often technically breaking the rules. Most businesses are breaking the rules somehow without knowing it. This is the sign of bad law.
From a consumer perspective, the cookie thing was just not thought out and extremely negative. Bad rules written by unthoughtful legislators. If they wanted to ban third party tracking, they should have just done that.
With respect to labor rules, I generally agree.
> If there was one group to look to for the future of human development, it would western Europe. These countries mostly have a terrific quality of life, the highest trust societies in the world, and, until recently, the moral high ground generally.
At least the German society is fragmented into lots of milieus that rather distrust each other; see for example the following German article:
> Jahrhundertaufgabe Migration: „Es gibt gar keine deutsche Gesellschaft mehr“
> https://www.focus.de/experts/sozialforscher-jahrhundertaufga...
Important excerpt:
"Ziel bleibt die deutsche Gesellschaft, aber diese deutsche Gesellschaft, wie sie lange Zeit existierte – zwar nicht homogen, aber durch gemeinsame Werte und Normen zusammengehalten – hat sich grundlegend verändert. Der technologische Fortschritt, die Globalisierung und die zunehmende Individualisierung haben diesen Rahmen, der durchaus Integrationserfolge vorweisen konnte, aufgelöst und das Große und Ganze in viele Gesellschaften zersplittern lassen.
Heute existiert keine Gesellschaft mehr, sondern zahlreiche Lebenswirklichkeiten, in der Regel Milieu genannt, nebeneinander, und jedes hat seine ureigenen Vorstellungen von einem richtigen und guten Leben. Eigene Normen, individuelle Verhaltensmuster sowie abweichende Wertevorstellungen. Das gab es vielleicht in größeren Blöcken schon immer, niemals jedoch in einer solchen Vielfalt der Unterschiedlichkeit und des Individualismus.
Bleiben wir bei den klassischen Milieus, die sich gesichert nachweisen lassen. Hedonisten, die primär Spaß und Genuss suchen, haben andere Ziele als Prekäre, bei denen es teilweise um die nächste Mahlzeit geht. Traditionelle oder Post-Materielle präferieren völlig unterschiedliche Lösungen für Probleme. Man nehme hier die Energiewende, die genannten Abschiebungen oder die Gendersprache als Stichworte. Die adaptiv-pragmatische Mitte ist viel flexibler als die alte bürgerliche Welt oder das etablierte Establishment. So setzt sich das dann fort. Ja, es gibt Schnittmengen, aber manche Milieus sind so weit voneinander entfernt, dass der Konsens immer schwieriger zu finden ist. Das ist natürlich euphemistisch. In Wahrheit steht man sich heute erbittert, fast verfeindet gegenüber, besteht auf seine Meinung und zeigt häufig nur noch wenig Kompromissbereitschaft. Ein Blick in die Wirklichkeit sollte hier genügen.
[...]
Deutschland fehlt ein einheitlicher gesellschaftlicher Rahmen, der Normen und Werte vorgibt, auf die sich alle einigen können. Historische Narrative wie das Versprechen des sozialen Aufstiegs oder das Vertrauen in staatliche Institutionen verlieren an Strahlkraft, was die gesellschaftliche Kohäsion weiter schwächt.
[...]
Das Ergebnis muss dann eine Zunahme sozialer Spannungen sein, da noch mehr Gruppen mit unterschiedlichen Werten und Normen in einer Gesellschaft koexistieren, ohne sich gegenseitig zu verstehen oder zu akzeptieren. Schon bei der deutschen Gesellschaft führt dies zu heftigen Milieukämpfen, die kaum mehr kontrollierbar sind. Man betrachte nur die aktuelle Stimmung im Lande. Wollen wir noch zahlreiche weitere abgekapselte Lebenswirklichkeiten durch Untätigkeit schaffen?"
Draghi's 'whatever it takes' turned europe to a heaven for bankers, and everyone else has since left. It's increasingly turning to a tourist destination, and that's not something to celebrate [evidenced by the high demand for tourist workers , the highest of all]
Just as an example, Uber does not operate in Italy as it does in many other countries, including in Europe, because taxi drivers are historically a highly organized group/mafia that can move substantial numbers of votes. Allowing Uber to operate would, perhaps, cost votes in the short term, but it could happen without monetary cost. Instead, taking a cab in Rome is a nightmare because the taxi mafia has no interest in increasing the number of cabs on the road or opening up to competition.
There is not a single citizen who does not benefit in some way from the artificial limitation of supply (i.e., taxi drivers and their families) who agrees with the current regulations/restrictions, but for some reason (money or votes) no politician is willing to crack down hard on them.
Since it is not and will not be one of the voters' priorities, it is an issue that is talked about for a few days after a journalist has to wait 3 hours to get a cab and disappears for months until another journalist can't find a cab. A clear symptom of a political class that is corrupt, immature, or both. Incompetent, I would add to the list.
Still in Italy, reforming the cost of the Italian university could be done at a reasonable cost. However, the deep and historical connection between the university and the bureaucratic and political system makes it preferable for decision-makers to maintain a heavily nepotistic status quo that everyone says will change sooner or later, but has not changed and I don't think will change in the next 10-20 years.
Countries that bet on tourism are failing states that are busy trying to get what they can instead of creating what they might.
> In fact, there is no EU company with a market capitalisation over EUR 100 billion that has been set up from scratch in the last fifty years
The simple truth is Europe cannot afford such programs.
Well, half joking here.. there probably will be a new green initiative to decarbonise IT. New tax money will pay for a new IT hub in Germany or France, where companies will stay for as long as EU pays their rent and gives tax incentives. After that, they will move out.
So a lot, but far from insane.
Ahuh.. so they are going to force "investment" from european households.. Read into that what you will..
Also talking about decarbonisation and militarization in the same breath.. just utter opposite ends of the spectrum.
The EU is schizophrenic at the best of times.. but this is absurdum ad nauseum
> Quantum computing is poised to be the next major innovation, but five of the top ten tech companies globally in terms of quantum investment are based in the US and four in China. None are based in the EU.
sounds a lot like what went wrong in 2008 with credit default swaps but hey, the devil would be in the details.
For hacker news most relevant would be the part at the end: "The EU should also enable the use of AI-powered software and machine-processed data to lower compliance and administrative costs for SMEs. Measures should include requiring harmonised reporting templates, de minimis reporting thresholds, and centralised reporting requirements using one multilingual interface."
Yes, lets be honest here: bureaucracy and bad IT systems are responsible for a lot of bullshit jobs. Improving this would be nice.
What I also found interesting was the part that said that because in Europe pensions are not invested [a lot] in the stock market, this means that European companies have less money to put into Research and Development compared to US and UK. And that's one of the reasons why the report says the EU needs 800 billion per year to stay competetive (4,7% of GDP! Marshall plan was 2%! Not my numbers, those are also in the report).
As bad as Google and Facebook may be, they are publicly traded, transparent, their existence gives the US a very good geopolitical asset, their creation lifted a lot of people into out of the middle class into the upper class.
We really cannot say the same about any EU corporation.
By contrast, the lack of competition in Europe holds down any newcomer. The only big companies today are those that have already be big companies for many years. That is not a natural state in a competitive market… normally new companies thrive and take market share while others decline and whither away.
The fact that Europe has no new big companies just proves that old big companies are monopolizing the market and using anti-competitive tactics to keep out any newcomer. That’s bad for Europe’s consumers.
You really have to respect Apple though: Despite the fact that they have approximately 30% market share in smart phones globally, and even smaller fraction of the overall browser market, they have single-handedly prevented PWAs from becoming a thing.
It’s even more amazing when you consider how Apple was not able to prevent Android-native and Windows-native apps (which have a smaller addressable market than PWAs)! Apple must have projected all their magic juju at the PWA market and forgotten to save any for native Android apps.
We know this is true because only the stupidest person could believe that users don’t like PWAs, and that PWAs simply failed on their own merits.
> This is a sign of a bad law.
Or maybe it is a sign that European businesses have normalized some really bad and abusive practices, and that the EC needs to crack down harder on consumer protections until those businesses get the message. Maybe 20% of revenue for a start? What was it that everyone likes to say about Apple? “Just follow the law”
/lays down 20,999 page book
For me, it is a very common experience (both online and at work (because I have work colleagues whose native language is neither German nor English)) to see texts in languages that I barely understand. Having to use some translation service to at least get a glimpse of the meaning of such texts is just my usual daily experience.
> The goal remains German society, but this German society as it has existed for a long time - not homogeneous, but held together by common values and norms - has changed fundamentally. Technological progress, globalization and increasing individualization have dissolved this framework, which has certainly been successful in terms of integration, and have caused the big picture to fragment into many societies. Today, there is no longer a society, but rather numerous realities of life, usually called milieus, that exist side by side, and each has its own ideas of a good and proper life. Its own norms, individual behavior patterns and different values. This may have always existed in larger blocks, but never in such a variety of differences and individualism. Let's stick with the classic milieus that can be reliably proven. Hedonists, who primarily seek fun and pleasure, have different goals than precarious people, for whom the next meal is sometimes the main concern. Traditional or post-materialists prefer completely different solutions to problems. Take the energy transition, the deportations mentioned above, or gender language as keywords here. The adaptive-pragmatic middle is much more flexible than the old bourgeois world or the established establishment. And so it continues. Yes, there are overlaps, but some milieus are so far apart that consensus is becoming increasingly difficult to find. That is of course a euphemism. In reality, people today are bitter, almost hostile towards one another, insist on their opinions and often show little willingness to compromise. A look at reality should suffice here. [...] Germany lacks a uniform social framework that sets norms and values that everyone can agree on. Historical narratives such as the promise of social advancement or trust in state institutions are losing their appeal, which further weakens social cohesion. [...] The result must then be an increase in social tensions, as even more groups with different values and norms coexist in a society without understanding or accepting each other. Even in German society, this leads to fierce milieu conflicts that are hardly controllable. Just look at the current mood in the country. Do we want to create many more isolated realities of life through inaction?"
Anyhow, you are right, and that is the infamous downwards spiral and lack of sovereignty to the market.
Either we see increased protectionism, increased inequality, or we pull our selves together and make a plain global playing field (eg. Through minimum taxation schemes).
Europe has a huge technological base and has the capability to affect its own destiny.
I want a market where participants are appraised based on the value they provide to the society.
How do you measure that? And who decides?
And before you say something along the lines of: "Well, the market want McDonalds food and snort themselves to death in cocaine" - let's just stop it there and think, in silence, about what a fair market is.
As we speak, companies like Rocket Factory Augsburg are developing cheap access to orbit.
Free markets on the other hand have already devised pretty effective ways to measure value and allocate resources.
When we have a grasp of an unfair malgoverned market, then we can think about what a fair we'll governed market is.
It is probably not the same for you and I.
> market where the people with the biggest guns can coerce
That is not a free market - free markets require rule of law to function.
> governing body only allow a single person to treat ill people
That is a heavily regulated market. Indeed, the less regulation on a market, the better it works.
Not idea what all this has to do with "fair" or what "fair markets" are.
A free market has two core properties: Supply and demand decides pricing and voluntary exchanges.
Down stream effects of these two are:
1. We need competition to have choice: Only have a single search provider and a single social network does not give that. 2. We need to have fair compensation to have voluntary exchanges: People who need money might involuntarily go into a labor contract to stay alive. 3. ... I am sure you can expand on this list yourself.
> Free markets on the other hand have already devised pretty effective ways to measure value and allocate resources.
It is very well established that there exist no free market: "While no pure free market economies actually exist ..." - https://www.investopedia.com/terms/f/freemarket.asp.
What you are discussing is pure politics and has nothing to do with any discourse of "scientific" economics - which indeed is what I tried to refuse to go into by saying that we can think about these things in silence.
However, if we do talk about economic freedom, then it seems like the US is on a 25th place over taken by more than 10 EU countries - all with foundational systems that are pro regulation: https://en.wikipedia.org/wiki/Index_of_Economic_Freedom
I definitely don't, especially pertaining to the actual question I asked:
>> participants are appraised based on the value they provide to the society
>How do you measure that? And who decides?
I wasn't talking about "pure free markets", I am not interested about philosophizing and talking politics - just concrete, real, actionable points.
LE: I live in the EU and saying Western European countries offer more economic freedom than the US is joke. The actual reality proves it: European economy has fallen badly behind the US. Reasons include overregulation, anti-business and anti-corporation climate.