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Utopia Talk / Politics / Why the lack od Euro innovation?
habebe
Member
Sun Nov 13 05:02:37
Why does Europe have almost no major innovative companies?

They have world class engineers and scientists, no one denies that. They have a comparable market to the US/China they probably have a much larger middle class than either.

So what is the secret sauce they are lacking? Entrprenurial spirit? Venture Capitalism? Mexicans?
Daemon
Member
Sun Nov 13 05:13:59
http://i0....EPO-graphic-2.png?w=1000&ssl=1
habebe
Member
Sun Nov 13 05:50:15
So where are your Teslas, Apple's, IBMs, Microsoft's, Google etc.?
habebe
Member
Sun Nov 13 05:53:36
Your patent list is great, and again, no one denies that Europe is world renowned for engineers/Scientists and even craftsmanship.

But do they sell them?
Daemon
Member
Sun Nov 13 06:01:18
Germany is not so good in the consumer business, that's why you don't see many German products in consumer stores. But:

http://www...ment-industry-in-germany-64586


The Machinery and Equipment Industry in Germany
Issue 2022/2023

With global machinery trade share of almost 16 percent, Germany’s M&E industry sector remains the world’s leading supplier of machinery – consolidating its position ahead of both China and the USA.

Apr 20, 2022

The Machinery & Equipment Industry in Germany

Machinery & Equipment (M&E) is the second largest and the most innovative industry sector in Germany. It is one of the technological motors that drive the country as a high-tech nation. In 2021, mechanical and plant engineering was once again the most important driver of growth in German industry. Turnover increased to EUR 260 billion – a new record that contributed considerably to the upturn in the German economy. Read more about this thriving industry in our brand new industry overview.

----------------

You mentioned Tesla. A story from 2016 as an example:

https://www.theverge.com/2016/11/8/13561146/tesla-acquisition-grohmann-automation-production

Tesla has agreed to acquire Grohmann Engineering, a German firm that specializes in automated manufacturing. Founder Klaus Grohmann will also be joining Tesla and will head a new division within the automaker called Tesla Advanced Automation Germany.
(...)
This is the first “significant” acquisition in Tesla’s history, said Tesla CEO Elon Musk.
(...)
habebe
Member
Sun Nov 13 06:08:50
But why aren't European companies buying US start ups and such?


Again, to clarify Im not meaning this as a dig at Europe.More of an I don't get it.

It used to be argued that is was too fractured of a domestic market, but the Euro has been around a while now.

Now I dont know the numbers on start up companies, but I know the US/Israel tend to have alot and India/china are rising quickly.

Maybe they have them in Europe and I just don't hear about it, but I don't hear about them.
Daemon
Member
Sun Nov 13 06:39:51
I think I have answered your initial posting and shown you that you are simply wrong.
I don't like these endless threads where the topic is moved with every new posting.
habebe
Member
Sun Nov 13 07:05:07
There are no very large European innovative companies. This is a fact.

I think you took it as an offense and sought to find things like patent numbers to say that Europe really does have large innovative companies like Google, Tesla, Alibaba, Apple etc.
Paramount
Member
Sun Nov 13 07:42:03
It’s hard to compete with Google and Microsoft.

Start ups also tend to be bought up once they have Google’s and Microsoft’s attention.
Seb
Member
Sun Nov 13 07:57:56
Three things:

1. Stronger anti-competition law - the changes under Reagan made it much easier for US based firms to acquire the competition.

2. Smaller markets - the EU is poly lingual so there are higher costs to scale

3. When European companies produce good products, they tend to get acquired by us companies before they can establish themselves as rivals. Cf. Deep Mind.
habebe
Member
Sun Nov 13 08:00:39
Sebs explanation makes the most sense actually.
habebe
Member
Sun Nov 13 08:03:02
That said, I think Id rather support stronger antitrust regulations.
Seb
Member
Sun Nov 13 17:29:01
The protectionists in the EU want to make it much harder for us and Chinese companies to buy it European ones before they can scale.

They might have a point here.

Sam Adams
Member
Mon Nov 14 09:36:26
Dont forget a higher tax burden and more regulation. Its easier to do business in the US.
Seb
Member
Mon Nov 14 09:52:53
Not true - there are several countries that regularly beat US on the ease of doing business index.

It's actually the cumbersomeness of US tax laws and protectionist measures that mean companies end up keeping their headquarters in the US.


Sam Adams
Member
Mon Nov 14 10:42:44
"there are several countries that regularly beat US on the ease of doing business index."

Ya, countries that are the size of small towns usually.
patom
Member
Mon Nov 14 11:09:20
There are several Euro manufacturers that have set up plants in the US. Bosch, Volkswagen, Mercedes, to name a few. Probably to save on transporting finished products to the largest market.

Norwegian fish growers are trying to set up in Maine in several locations. Innovating in that they are land based operations. As soon as they can get past the NIMBY's.
Habebe
Member
Mon Nov 14 12:02:28
Patom, Tesla is worth more than all of them. Not even just on a one on one basis, Tesla is worth more than every major European car company combined.

Now again, its because they actually went backwards in style to where they make everything in house. Plus they also have no 3rd party dealerships, write their own code and are probably 10 years ahead of everyone on battery tech.

Im really talking about major high tech businesses. China has made huge strides.

Even Japan and SK have good footholds that I just don't see from europe anymore.
murder
Member
Mon Nov 14 12:31:36

"Tesla is worth more than all of them."

Does Tesla make more money?

Hint: They don't. VW's revenue dwarfs Tesla's.

murder
Member
Mon Nov 14 12:33:55
http://for...Motor%20Vehicles%20%26%20Parts
Habebe
Member
Mon Nov 14 12:52:08
Blah blah blah.

That's like arguing 20 years ago that blockbuster made more money than Netflix.

Tesla has a market cap literally like 10x VW.
Seb
Member
Mon Nov 14 14:08:53
Sam:

UK regularly beat the US (at least before brexit, less so now as brexit is actually a bunch of barriers to ease of doing business).

Patom:

To get around US regulatory barriers.

Habebe:

Depends on how you value it. It almost certainly isn't worth more than them - the shares just trade at a higher price.

There's no real substance to that at all.

It's not like Netflix where you can look at the business model and see strong reasons for valuing Netflix higher than blockbuster.
murder
Member
Mon Nov 14 14:24:08

"Tesla has a market cap literally like 10x VW."

That's right ... because they sell hype.
Habebe
Member
Mon Nov 14 15:09:09
"It's not like Netflix where you can look at the business model and see strong reasons for valuing Netflix higher than blockbuster."

Tesla does have a very distinct business model which has led to it outperforming the Toyota model which most companies follow.

Now it can still be over valued, thats debatable. But it clearly is worth more than any other EV manufacturer and EV's are the future.

Tesla routinely has larger profit margins and dominates the EV space.
Habebe
Member
Mon Nov 14 15:13:12
Speaking of Toyota...lol.

Tesla earned eight times as much profit per vehicle as Toyota Motor in the July-September quarter despite being outsold more than 7 to 1, a Nikkei analysis shows, putting the American electric-vehicle maker ahead in quarterly net profit for the first time since going public in 2010.

Tesla reported a $3.29 billion net profit in that quarter. Toyota earned 434.2 billion yen -- the equivalent of $3.15 billion based on the average exchange rate for the period of 138 yen to the dollar.

http://asi...yers%20like%20Mercedes%2DBenz.


Making more money and making fewer cars for that more money sounds good for business.
murder
Member
Mon Nov 14 15:30:25

If Tesla keeps growing someday they will be BMW.

Sam Adams
Member
Mon Nov 14 16:38:19
"UK regularly beat the US"

Lol.
Seb
Member
Mon Nov 14 18:05:17
Habebe:

Outperformed on what metric?

Do they make more cars than Toyota?
Do their cars sell for more than Toyota?
Are their cars substantially cheaper to make than toyotas?

Pretty much everyone makes EVs these days.

Your article is very funny in that it does not prove your point at all. It's 1 quarter and explains precisely why this anomaly occurs:

"Toyota's decline stemmed in part from extraordinary factors. The automaker is currently shouldering increased material and electricity costs for its suppliers. Higher materials costs, including such assistance to suppliers, pushed down quarterly operating profit by 450 billion yen ($3.07 billion), which was only partially offset by a 370 billion yen boost from a weak yen."

So essentially they are providing support to their supply chain, the decline in the Yen against the dollar makes their operating profit look smaller in dollar for dollar terms.


"It also booked one-time expenses of 96.9 billion yen from shutting down production in Russia."

So they are making a huge one off write down on Russian production.


Seb
Member
Mon Nov 14 18:08:09
Sam:

You realise the US is in many ways hopelessly behind Europe on loads of bureaucratic points.

Take simple stuff like banking infrastructure. I remember Nhill going on about how crypto would allow instant (in under an hour) bank transfers.

We have instant transfers as the standard now.

Habebe
Member
Mon Nov 14 18:43:05
Seb,Even annualized, Tesla has a profit margin of about 17%, way higher than the 2-4% standard.

People WANT Tesla more than other EVs.

Again, Netflix to Blockbuster is an apt comparison. The story goes BB laughed at Netflix trying to sell out to BB who had an online presence, but it could never catch up to Netflix.
nhill
Member
Mon Nov 14 20:49:32
>Take simple stuff like banking infrastructure. I remember Nhill going on about how crypto would allow instant (in under an hour) bank transfers.

That's the case for many banks in the USA, and also all of our underlying infrastructure. There's services like Zelle now that work around it by providing temporary liquidity, but, it still takes days to settle the ACH, and they take on the counterparty risk by doing so!

USA is quite backwards in its financial infrastructure. I wrote some of it. Seeing the nitty gritty made me want to make something better, so now I write crypto software.
nhill
Member
Mon Nov 14 20:52:48
If you want to see how much the USA dominates the world economically, you can look here and marvel at the lack of EU companies:

http://companiesmarketcap.com/

Of course, as Seb indicated, market capitalization isn't always an accurate valuation, lot of speculation most times. But most of the speculators are out of the market by now, so it's more reasonably accurate today because of the bear market.
Seb
Member
Tue Nov 15 09:18:59
Nhill:

Yeah, but if you look at how US companies grow - a lot of it comes from achieving scale and then buying the competition out.

Europe needs to be more aggressive in blocking US and Chinese acquisitions as both do not pursue anti-trust and monopoly busting to the degree the EU does.

The EU is far more committed to the purest vision of competition than the US which is positively corporatist and practically Pro monopoly.

Habebe:

Yeah, Tesla has a cool brand which commands higher premium - that's worth something. But that doesn't account for the market cap.

Habebe
Member
Tue Nov 15 09:51:08
Teslas valuation may be inflated, but it's still worth far more than any other car company by a long shot.

The brand is some of it. Fan loyalty, but many car companies have that.

The structure is unique which allows for higher profit margins, amd greater control of supply chain, so when we have disruptions like now they are more resilient.

But again, this goes way deeper than Musk or his company.

TSMC and Samsung beat every European hi tech company. Nokia used to be big, not sure how big.

Without digging on Europe, this seems to be a real problem for them and to be honest, for the US as well.I think greater competition from some of our major allies would be a benefit.

http://www...-addressing-its-technology-gap

Something should probably be done about It.
murder
Member
Tue Nov 15 14:42:48

"The structure is unique which ..."

Which has nothing to do with anything. Tesla's valuation is completely divorced from it's revenue or profit. It's all driven by robo-taxis and dancing robots and whatever other bullshit Elon Musk claims is just around the corner.

It's hilarious that people buy his improbable bullshit when he's had so much trouble getting a dumb pickup truck into production.

And the semi is almost here.

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