4 of the 14 companies you found are Swedish. And I think that Akelius Residential Property AB https://en.wikipedia.org/wiki/Akelius also belongs on the list, but I haven't read the report so maybe there is a different reason it was excluded. Not bad for a country of 10 million people. I do not know if the rest of Europe has the problems we have, but in Sweden we have a great many small companies, a few very large ones, and very few that are moderately sized. So if you are a small company and are growing to the point where you need more management, you often cannot find people who have experience in managing in firms that are at the 1000-2000 employee size, and trying to grow. They don't exist. And you end up being better off forking the company into two smaller ones because you do know how to find people who can manage well at the smaller size. This works if you only care about the domestic market. But what if your ambitions are greater?
When all goes well, and it is time to expand to the rest of Europe, Swedes all discover the problem you have collaborating and managing despite profound differences in managerial style and business culture. And this often defeats the expansion. Sweden is an exteme outlier in business cultures, particularly in the flat-egalitatrian vs layered-hierarchical dimension. You cannot expect French or German workers to behave like Swedish ones. They need more direction, and to be lead more. But Swedish managers sent to France and Germany often have no clue how to provide this, or often even have no understanding that this is the problem, and keep trying to get their workers to show more initiative, and stop being so deferential. (There is more understanding that this is the problem these days.) I think that this is the sort of business cultural differences, far more than the various languages, which makes it harder to grow businesses in Europe.
Some European mergers between companies that come from different countries have been very successful. And larger companies vaccuming up smaller ones in the same sector all across Europe has often worked out for the larger companies -- people interested in this can read a history of ABB, which will not make the Draghi list because it was founded in 1988 by the merger of 2 firms, Sweden's Allmänna Svenska Elektriska Aktiebolaget (ASEA) and Switzerland's Brown, Boveri & Cie. They are now the leading company in industrial robotics, with 21% of the market. Their nearest rivals have 9%. see: https://www.statista.com/chart/32239/global-market-share-of-industrial-robotics-companies/ This is the sort of success we want, so it would be nice if we could find out how ABB did it They have a market cap of 105.66 Billion USD, but somehow aren't on the https://companiesmarketcap.com/tech/largest-tech-companies-by-market-cap/ list. Oversight? or are there rules about what goes into that list that I am unfamiliar with, and so misunderstood? . Assa Abloy is another founded less than 30 years ago by an inter-country merger success. Maybe this is an easier way to succeed, rather than trying to impose your culture on other nations?
Actually 5 of the 14 companies is from Sweden. Thats 36% of the companies on this list with Swedens population representing 2% of EUs population. As a Swede, this makes me really proud but I’m concerned over the future of Europe.
In support of this idea, French speaking Swiss I know say that international collaboration between themselves and Swedes is much easier than between themselves and the French, despite the shared language. But how to test such things?
I don't buy the language argument for Europe at all.
The US companies sell their products to the entire human race (well, you get my point) and there are far more languages on planet earth than in Europe.
China is the US's 3rd largest trading partner and their primary language is not English. I have a buddy who works for Micron, and Micron hires translators for their biggest corporate execs when they travel or meet foreign leaders/business partners in China, Korea or Japan (for example).
Language hurts indirectly. It prevents elites and administrations to mingle together and find common solutions. It's part of the cause of the legal patchwork.
I don't think this changes the overall story significantly, but worth noting that Microsoft and Apple are 49 and 48 years old, while SAP (the largest EU tech co.), is 53 years old, just falling on either side of the 50-year cutoff.
In a couple of years, the graphic would be somewhat different (not substantially different, but not negligibly different either).
Conversely, if SAP were added, the EU bubble group would be 75% larger (+ $320Bn).
As a Swede, this article is both alarming but also makes me proud since 36 % of the companies on this list is Swedish despite our population only being 2 % of EU. And also Spotify being the largest of them all!
You missed a couple of Swiss companies - I know Switzerland isn’t in the EU but probably they should have been included for the sake of completeness when discussing European innovation: Partners Group (€36B-1996)
Looking at the 14 EU companies that are listed, five are from Sweden (Spotify, EQT, AB Sagax, Evolution AB, Hexagon AB), three from Denmark (DSV, Asyen, Pandora), two from Germany (BioNTech, DeliveryHero), two from Ireland, (Icon, RyanAir) one from Belgium (Argenx) and one from Spain (Amadeus). Given the sizes of their economies and their population, Sweden and Denmark seem to be doing pretty well. Do you have data on Norway and Switzerland? My hunch is that Switzerland is doing exceptionally well. The level of innovation and entrepreneurialism is surprisingly high in Switzerland. Also the data may not be complete. For example, ASLM Holdings, a Dutch company, the world leading in Semiconductor Equipment Manufacturing, with a market cap of $293bn, worth more than Shell, did not exist 50 years ago. Unless it is seen as a spinoff of Philips and was removed from the list as a consequence. Also GDP per capita - adjusted for Purchasing Power Parity - puts the US at $74k. Above the US: Ireland at $114k and Switzerland at $82k. Below the US: Denmark at $72k (close enough), Netherlands at $71k, Germany and Sweden at $63k, France at $55k, UK at $53k, Italy at $53k, and Spain at $54k. So indeed Europe is reasonably wealthy today - the issue is growth. See the recent article in the Economist on this topic: https://www.economist.com/special-report/2024/10/14/the-american-economy-has-left-other-rich-countries-in-the-dust
Lots of other old European giants are missing (Total, Siemens, L'Oreal, Deutsche telekom...)
The idea is of course to measure relative strength in business innovation, which is mostly driven by new companies. The old ones tend to stagnate and fade away or crash like Kodak.
Of course, another interpretation would be to look at the image on the left and think "malignant cancerous tumour" on course to kill its host, the planet's biosphere. I suspect a bubble chart of ecological impacts by those same companies would look similar - Draghi et al blue-pilled that "Growth" at all costs is a North Star worth chasing. Now do growth without ecocide.
It’s crazy to think that a continent once at the top of its game during the industrial revolution has upended this way during the tech revolution. It’s definitely not caused by the fact that there are fragmented communities of different languages, because EU has shown success in the past - and global success. Their cars were once hailed class best in virtually every class they set their foot in. The government’s not keeping up with the tech scene is a much more plausible cause for this decline.
Thank you for this interesting and detailed article.
I'm currently writing a book on the disruption of states by the Internet, and in it I'm showing the difference in reaction between the USA and the EU to these disruptions, and the results.
Your graph clearly and strikingly illustrates the economic disparity created by over-regulation.
Would you allow me to include this diagram in my book, with full attribution of course, and a mention of your blog?
4 of the 14 companies you found are Swedish. And I think that Akelius Residential Property AB https://en.wikipedia.org/wiki/Akelius also belongs on the list, but I haven't read the report so maybe there is a different reason it was excluded. Not bad for a country of 10 million people. I do not know if the rest of Europe has the problems we have, but in Sweden we have a great many small companies, a few very large ones, and very few that are moderately sized. So if you are a small company and are growing to the point where you need more management, you often cannot find people who have experience in managing in firms that are at the 1000-2000 employee size, and trying to grow. They don't exist. And you end up being better off forking the company into two smaller ones because you do know how to find people who can manage well at the smaller size. This works if you only care about the domestic market. But what if your ambitions are greater?
When all goes well, and it is time to expand to the rest of Europe, Swedes all discover the problem you have collaborating and managing despite profound differences in managerial style and business culture. And this often defeats the expansion. Sweden is an exteme outlier in business cultures, particularly in the flat-egalitatrian vs layered-hierarchical dimension. You cannot expect French or German workers to behave like Swedish ones. They need more direction, and to be lead more. But Swedish managers sent to France and Germany often have no clue how to provide this, or often even have no understanding that this is the problem, and keep trying to get their workers to show more initiative, and stop being so deferential. (There is more understanding that this is the problem these days.) I think that this is the sort of business cultural differences, far more than the various languages, which makes it harder to grow businesses in Europe.
Some European mergers between companies that come from different countries have been very successful. And larger companies vaccuming up smaller ones in the same sector all across Europe has often worked out for the larger companies -- people interested in this can read a history of ABB, which will not make the Draghi list because it was founded in 1988 by the merger of 2 firms, Sweden's Allmänna Svenska Elektriska Aktiebolaget (ASEA) and Switzerland's Brown, Boveri & Cie. They are now the leading company in industrial robotics, with 21% of the market. Their nearest rivals have 9%. see: https://www.statista.com/chart/32239/global-market-share-of-industrial-robotics-companies/ This is the sort of success we want, so it would be nice if we could find out how ABB did it They have a market cap of 105.66 Billion USD, but somehow aren't on the https://companiesmarketcap.com/tech/largest-tech-companies-by-market-cap/ list. Oversight? or are there rules about what goes into that list that I am unfamiliar with, and so misunderstood? . Assa Abloy is another founded less than 30 years ago by an inter-country merger success. Maybe this is an easier way to succeed, rather than trying to impose your culture on other nations?
Actually 5 of the 14 companies is from Sweden. Thats 36% of the companies on this list with Swedens population representing 2% of EUs population. As a Swede, this makes me really proud but I’m concerned over the future of Europe.
I wonder if the success of ABB might have some relationship to the two countries being the most "outsider" countries of western Europe?
Interesting idea. Do you mean outsider in terms of this culture map?
https://www.worldvaluessurvey.org/photos/EV000428.JPG
In support of this idea, French speaking Swiss I know say that international collaboration between themselves and Swedes is much easier than between themselves and the French, despite the shared language. But how to test such things?
I don't buy the language argument for Europe at all.
The US companies sell their products to the entire human race (well, you get my point) and there are far more languages on planet earth than in Europe.
China is the US's 3rd largest trading partner and their primary language is not English. I have a buddy who works for Micron, and Micron hires translators for their biggest corporate execs when they travel or meet foreign leaders/business partners in China, Korea or Japan (for example).
No way do I buy this language issue in Europe.
Language hurts indirectly. It prevents elites and administrations to mingle together and find common solutions. It's part of the cause of the legal patchwork.
I don't think this changes the overall story significantly, but worth noting that Microsoft and Apple are 49 and 48 years old, while SAP (the largest EU tech co.), is 53 years old, just falling on either side of the 50-year cutoff.
In a couple of years, the graphic would be somewhat different (not substantially different, but not negligibly different either).
Conversely, if SAP were added, the EU bubble group would be 75% larger (+ $320Bn).
Why are the pics so lo-res for me?
As a Swede, this article is both alarming but also makes me proud since 36 % of the companies on this list is Swedish despite our population only being 2 % of EU. And also Spotify being the largest of them all!
You missed a couple of Swiss companies - I know Switzerland isn’t in the EU but probably they should have been included for the sake of completeness when discussing European innovation: Partners Group (€36B-1996)
Glencore (€56B - 1974)
Richemont (€83B - 1988)
TE Connectivity (€43B - 2007)
Swisscom (€28B - 1997)
STMicroelectronics (€22B-1987)
On Holding (€17B - 2010)
Great analysis Andrew. What about Zara (Inditex)? It's a Spanish company created in 1975 and has a market capitalization above 100B.
Inditex traces its history back to 1963:
https://www.inditex.com/itxcomweb/en/group/history
That’s the trace. It’s like saying that Apple started the day they started working in their garage.
You are comparing company funding dates, so you should be equal in all cases. Inditex was founded in 1985.
Great visualization of an important point. Europe has some serious work to do. Moderate reform is simply not enough.
Looking at the 14 EU companies that are listed, five are from Sweden (Spotify, EQT, AB Sagax, Evolution AB, Hexagon AB), three from Denmark (DSV, Asyen, Pandora), two from Germany (BioNTech, DeliveryHero), two from Ireland, (Icon, RyanAir) one from Belgium (Argenx) and one from Spain (Amadeus). Given the sizes of their economies and their population, Sweden and Denmark seem to be doing pretty well. Do you have data on Norway and Switzerland? My hunch is that Switzerland is doing exceptionally well. The level of innovation and entrepreneurialism is surprisingly high in Switzerland. Also the data may not be complete. For example, ASLM Holdings, a Dutch company, the world leading in Semiconductor Equipment Manufacturing, with a market cap of $293bn, worth more than Shell, did not exist 50 years ago. Unless it is seen as a spinoff of Philips and was removed from the list as a consequence. Also GDP per capita - adjusted for Purchasing Power Parity - puts the US at $74k. Above the US: Ireland at $114k and Switzerland at $82k. Below the US: Denmark at $72k (close enough), Netherlands at $71k, Germany and Sweden at $63k, France at $55k, UK at $53k, Italy at $53k, and Spain at $54k. So indeed Europe is reasonably wealthy today - the issue is growth. See the recent article in the Economist on this topic: https://www.economist.com/special-report/2024/10/14/the-american-economy-has-left-other-rich-countries-in-the-dust
Novo is more than 50 years old.
Lots of other old European giants are missing (Total, Siemens, L'Oreal, Deutsche telekom...)
The idea is of course to measure relative strength in business innovation, which is mostly driven by new companies. The old ones tend to stagnate and fade away or crash like Kodak.
It would be great if you started at $1b /euro market cap and extended it to 55 yrs to make SAP people happy 😃
Then add all the VC money the last 55 yrs raised in the US and Europe
And did slices every 11 yrs to capture each boom cycle or period going back 55yrs.
And, pulled annual tech spending from Gartner, Forrester, Consumer Tech, OT/IT estimated to see the growth % and density of spending differential
Lastly, compared foreign tech sales in Europe vs. US by each other (SAP will be what jumps out in the US)
Also there are a ton of industrial tech, Bio-Life Science firms usually not included. Rockwell, Siemens, etc..
the 14 EU arrivistes vs. US comparison hits hard.
Of course, another interpretation would be to look at the image on the left and think "malignant cancerous tumour" on course to kill its host, the planet's biosphere. I suspect a bubble chart of ecological impacts by those same companies would look similar - Draghi et al blue-pilled that "Growth" at all costs is a North Star worth chasing. Now do growth without ecocide.
It’s crazy to think that a continent once at the top of its game during the industrial revolution has upended this way during the tech revolution. It’s definitely not caused by the fact that there are fragmented communities of different languages, because EU has shown success in the past - and global success. Their cars were once hailed class best in virtually every class they set their foot in. The government’s not keeping up with the tech scene is a much more plausible cause for this decline.
Thank you for this interesting and detailed article.
I'm currently writing a book on the disruption of states by the Internet, and in it I'm showing the difference in reaction between the USA and the EU to these disruptions, and the results.
Your graph clearly and strikingly illustrates the economic disparity created by over-regulation.
Would you allow me to include this diagram in my book, with full attribution of course, and a mention of your blog?
FYI, I linked your post here:
https://www.libertyrpf.com/i/151832202/us-vs-europe-tech-companies