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 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).
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.
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)
There aren’t 130 million German speakers in the EU. Per perplexity’s: “Approximately **16%** of the European Union's population speaks German, which translates to about **77 million people** based on the EU's total population of approximately 480 million. “
It would be interesting to plot something similar for smaller companies and show how it is evolving with time.
My impression is that the number of startups has literally exploded in the EU in the last 10 years or so. About half of my PhD students create their own startup after graduation, a phenomenon that didn't exist 10 years ago.
I believe that both the US and EU economies are largely dominated by small companies, not large ones.
Interesting to note that 8 of the 14 European firms aren't located in the Euro zone. I notice a similar phenomenon when looking at European mega cap firms. It's dominated by Switzerland and the U.K., again non-Euro zone countries.
Thank you for sharing this perspective Andrew. By the way, did you use Gapminder for the visualization? European innovations & Hans Rosling FTW.
This analysis may be missing a few key points to understand the picture though. Is this really the image of the EU putting too many restrictions and requirements on its young tech companies? Or are also global macroeconomic patterns embedded within it, and maybe even of even larger impact?
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 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).
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.
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!
Why are the pics so lo-res for me?
Great visualization of an important point. Europe has some serious work to do. Moderate reform is simply not enough.
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)
There aren’t 130 million German speakers in the EU. Per perplexity’s: “Approximately **16%** of the European Union's population speaks German, which translates to about **77 million people** based on the EU's total population of approximately 480 million. “
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.
I'm not entirely sure I would classify T-Mobile as an American company.
We need to take T-Mobile out because it's a spinoff (of Deutsche Telekom)
It would be interesting to plot something similar for smaller companies and show how it is evolving with time.
My impression is that the number of startups has literally exploded in the EU in the last 10 years or so. About half of my PhD students create their own startup after graduation, a phenomenon that didn't exist 10 years ago.
I believe that both the US and EU economies are largely dominated by small companies, not large ones.
The discussion is as interesting as the article. Great, to-the-point visualisation though. Gets the point across very nicely.
The reason for this difference is so easy to spot. US homes have (attached) garages. Most European houses do not.
OK, that was fun. But I also found that many US high schools have - well-stocked - science and computer clubs.
And it is easier to go bankrupt and start over in the US.
OTOH, were many of the big blobs in the US side of this graphic not started by (also) first and second generation immigrants?
Europe had some disadvantages, e.g. it is only since the last 25-30 year possible to go from one EU country to another to work - without visa issues.
Interesting to note that 8 of the 14 European firms aren't located in the Euro zone. I notice a similar phenomenon when looking at European mega cap firms. It's dominated by Switzerland and the U.K., again non-Euro zone countries.
Thank you for sharing this perspective Andrew. By the way, did you use Gapminder for the visualization? European innovations & Hans Rosling FTW.
This analysis may be missing a few key points to understand the picture though. Is this really the image of the EU putting too many restrictions and requirements on its young tech companies? Or are also global macroeconomic patterns embedded within it, and maybe even of even larger impact?
Here is my take: https://www.linkedin.com/posts/fridgren_andrew-mcafee-a-principal-research-scientist-activity-7295932389225066500-uDX8
How do you assure completeness? E.g. Dutch based ASML is founded in 1984, has a market cap of $290B but is not in your bubbles.