<story><title>Europe is now a corporate also-ran. Can it recover its footing?</title><url>https://www.economist.com/briefing/2021/06/05/once-a-corporate-heavyweight-europe-is-now-an-also-ran-can-it-recover-its-footing</url></story><parent_chain><item><author>thow-01187</author><text>Imho, what was happening in the Silicon Valley economy looks much more like displacement of value rather than creation of value (1).&lt;p&gt;Google&amp;#x2F;Facebook have displaced other ad formats, redirecting money to themselves. AWS have displaced IT technicians in other corporations, redirecting money to themselves. Apple is selling overpriced commodity hardware, redirecting money to themselves. Uber is displacing taxis, redirecting money to themselves.&lt;p&gt;In other words, it&amp;#x27;s barely above zero-sum game. And US productivity statistics are clear - the aforementioned corporations grew 500%-1000% in their profits and valuations since 2010. Meanwhile, the US productivity has grown by 4.7%. Had the SV tech been a clear net positive to the economy, the productivity growth would look different. When the tech&amp;#x2F;telecom was truly creating new value (1995-2005), the productivity growth was at 27% that decade.&lt;p&gt;(1) with notable exceptions: Microsoft really is creating value where one didn&amp;#x27;t exist before. So is Netflix, Amazon&amp;#x27;s venerable logistics and Tesla&amp;#x27;s drive to decrease battery costs</text></item><item><author>JumpCrisscross</author><text>&amp;gt; &lt;i&gt;the entire EU economy grew at the same speed than the US one but not its 500 bigger companies&lt;/i&gt;&lt;p&gt;This is literally the article’s point. Europe and the U.S. grew similarly. The U.S. and China produced more large companies. (The Continent’s larger companies also being older than the other two’s.)&lt;p&gt;&amp;gt; &lt;i&gt;supposedly more investment in R&amp;amp;D&lt;/i&gt;&lt;p&gt;Not supposedly, factually. The article explicitly states this. It’s the Economist; if you need a source, they’re available on Google Scholar.&lt;p&gt;&amp;gt; &lt;i&gt;take the global innovation index, the number of Nobel price per 100&amp;#x27;000 habitants, the number of registered patents per year or simply the size of the economy&lt;/i&gt;&lt;p&gt;Nobel prizes and patents are measures of innovation, albeit not commercial ones.  Leading product centres are another. The article measure the latter.&lt;p&gt;Europe has constrained its big businesses and scale-oriented entrepreneurs. America and China have not. This is a tradeoff, and we’re seeing it play out. The Economist takes one side; it’s the side of iPhones, AWS, the Falcon 9, drones and other businesses with economies of scale. It’s against social sensibilities aligned against “big business.”</text></item><item><author>satellite2</author><text>This article is truly bizarre.&lt;p&gt;The main point it makes is that the top 500 US companies grew faster than the top 500 European ones in the last decade or so.&lt;p&gt;But then it quickly mention, without any further analysis, that both their GDP actually grew at a similar pace. So the entire EU economy grew at the same speed than the US one but not its 500 bigger companies. So all else being equals it means that the smaller US companies grew more slowly and that this article is simply mesuring increasing corporate inequalities (if there is such a thing).&lt;p&gt;It then goes on to say, without much evidence, that this is actually good as economies of scale, supposedly more investment in R&amp;amp;D and increasing concentration should imply more innovation.&lt;p&gt;If this article actually wants to discuss innovation, why don&amp;#x27;t it use recognised tools to do so? If you take the global innovation index, the number of Nobel price per 100&amp;#x27;000 habitants, the number of registered patents per year or simply the size of the economy, all point to a very healthy European continent.&lt;p&gt;I will even go further and say that the US should monitor much more closely increasing concentration as typically the ISPs or the energy distribution sectors show that concentration can be good for the shareholders but devastating for the consumer.</text></item></parent_chain><comment><author>simonh</author><text>I people freely move from one service or product to another, usually it&amp;#x27;s because the new service is cheaper or better than the old service or product. That&amp;#x27;s direct value to the end user right there.&lt;p&gt;Moving to AWS from running your own data centres is vastly more cost effective for most companies, you can build systems faster, you can scale them instantly, you can move resources between regions easily, you can focus on your company&amp;#x27;s core competencies. AWS creates massive value, that&amp;#x27;s why we use it.&lt;p&gt;I used to look up the phone numbers of restaurants in a phone book, but now I use Google. That doesn&amp;#x27;t mean they are equivalent to me and they provide the same value. Looking up a restaurant on Google Maps is quicker, I can do it from anywhere, I can look at reviews and I can see exactly where it is and get routing direction. The experience now is orders of magnitude more powerful and that creates huge value for customers and businesses.&lt;p&gt;Apple hardware is highly customised, and dramatically better than anything their customers have with better performance and advanced features like machine learning and secure authentication all implemented in custom hardware. That&amp;#x27;s been true on the phones for many years, and now with their in house designed desktop processors it&amp;#x27;s true for the Mac as well. Although the Mac has had unique custom hardware like the T1 and the 5K iMac video system for a while too. You cannot buy hardware like it anywhere else, at any price.</text></comment>
<story><title>Europe is now a corporate also-ran. Can it recover its footing?</title><url>https://www.economist.com/briefing/2021/06/05/once-a-corporate-heavyweight-europe-is-now-an-also-ran-can-it-recover-its-footing</url></story><parent_chain><item><author>thow-01187</author><text>Imho, what was happening in the Silicon Valley economy looks much more like displacement of value rather than creation of value (1).&lt;p&gt;Google&amp;#x2F;Facebook have displaced other ad formats, redirecting money to themselves. AWS have displaced IT technicians in other corporations, redirecting money to themselves. Apple is selling overpriced commodity hardware, redirecting money to themselves. Uber is displacing taxis, redirecting money to themselves.&lt;p&gt;In other words, it&amp;#x27;s barely above zero-sum game. And US productivity statistics are clear - the aforementioned corporations grew 500%-1000% in their profits and valuations since 2010. Meanwhile, the US productivity has grown by 4.7%. Had the SV tech been a clear net positive to the economy, the productivity growth would look different. When the tech&amp;#x2F;telecom was truly creating new value (1995-2005), the productivity growth was at 27% that decade.&lt;p&gt;(1) with notable exceptions: Microsoft really is creating value where one didn&amp;#x27;t exist before. So is Netflix, Amazon&amp;#x27;s venerable logistics and Tesla&amp;#x27;s drive to decrease battery costs</text></item><item><author>JumpCrisscross</author><text>&amp;gt; &lt;i&gt;the entire EU economy grew at the same speed than the US one but not its 500 bigger companies&lt;/i&gt;&lt;p&gt;This is literally the article’s point. Europe and the U.S. grew similarly. The U.S. and China produced more large companies. (The Continent’s larger companies also being older than the other two’s.)&lt;p&gt;&amp;gt; &lt;i&gt;supposedly more investment in R&amp;amp;D&lt;/i&gt;&lt;p&gt;Not supposedly, factually. The article explicitly states this. It’s the Economist; if you need a source, they’re available on Google Scholar.&lt;p&gt;&amp;gt; &lt;i&gt;take the global innovation index, the number of Nobel price per 100&amp;#x27;000 habitants, the number of registered patents per year or simply the size of the economy&lt;/i&gt;&lt;p&gt;Nobel prizes and patents are measures of innovation, albeit not commercial ones.  Leading product centres are another. The article measure the latter.&lt;p&gt;Europe has constrained its big businesses and scale-oriented entrepreneurs. America and China have not. This is a tradeoff, and we’re seeing it play out. The Economist takes one side; it’s the side of iPhones, AWS, the Falcon 9, drones and other businesses with economies of scale. It’s against social sensibilities aligned against “big business.”</text></item><item><author>satellite2</author><text>This article is truly bizarre.&lt;p&gt;The main point it makes is that the top 500 US companies grew faster than the top 500 European ones in the last decade or so.&lt;p&gt;But then it quickly mention, without any further analysis, that both their GDP actually grew at a similar pace. So the entire EU economy grew at the same speed than the US one but not its 500 bigger companies. So all else being equals it means that the smaller US companies grew more slowly and that this article is simply mesuring increasing corporate inequalities (if there is such a thing).&lt;p&gt;It then goes on to say, without much evidence, that this is actually good as economies of scale, supposedly more investment in R&amp;amp;D and increasing concentration should imply more innovation.&lt;p&gt;If this article actually wants to discuss innovation, why don&amp;#x27;t it use recognised tools to do so? If you take the global innovation index, the number of Nobel price per 100&amp;#x27;000 habitants, the number of registered patents per year or simply the size of the economy, all point to a very healthy European continent.&lt;p&gt;I will even go further and say that the US should monitor much more closely increasing concentration as typically the ISPs or the energy distribution sectors show that concentration can be good for the shareholders but devastating for the consumer.</text></item></parent_chain><comment><author>aikinai</author><text>&amp;gt; Apple is selling overpriced commodity hardware&lt;p&gt;This hasn’t been true since the 90s. And the rest of your examples are similarly ignorant of the incredible pace of innovation coming from a lot of these companies. Google ads might not be changing the world, but their peripheral technology certainly is. AWS and Amazon’s core business as well.</text></comment>