> European companies are just run the same way EU governments are run, on austerity and cost cutting
To a certain extent yes.
But that's because of margins. An large automotive parts vendor or a major biopharma company isn't generating revenue on software, so software engineering is treated as a cost center.
It's the same in the US, but at least you have tech first companies that generate most of their revenue of tech.
Europe's tech industry died out because of a mixture of mismanagement and bad luck. Velti [0] used to outcompete AdSense, but their management was incompetent and borderline fraudulent, and that's why the AdTech industry boomed in the US and collapsed in Europe.
The same thing happened to Nokia, Ericcson, and others.
The good European startups like Datadog, Spotify, Databricks, and UIPath all ended up relocating to the US so an entire generation of startups doesn't exist in the EU.
> they instead try to increase the profits by cutting all possible costs from purchasing to labors' wages and offshoring, since I assume that's also what's taught in European MBA schools
I've dealt with MBA grads from the EU and US - they aren't taught any of this. IMO, the issue is most leadership in European companies tend to be ex-accountants from KPMG/EY/PWC/Deloitte/Mazars-type companies, because manufacturing industries like pharma, automotive, etc have severely low margins.
Was it really bad luck or just bad management refusing to accept the reality that they were bad so they blamed luck?
Nokia CEO was famous for saying "We did everything right and still lost". Clearly he didn't do everything right if they lost.
I think EU leaders and CEOs have no accountability, hindsight or self reflection capacity to see how badly they're failing so then just blame bad luck because it always has to be someone else's fault.
> Was it really bad luck or just bad management refusing to accept the reality that they were bad so they blamed luck?
Bit of column A and bit of column B. There was a LOT of bad management, but the Eurozone Crisis (2007-2014, 2018 for Greece) was also extremely severe and out of corporate leadership's hands.
If 70-80% of your customers across the Eurozone were delinquent in payments and in the midst of bankruptcies and rolling down operations, you wouldn't be generating the same amount of revenue needed.
In the US, enforcing vendor arrears and collecting dues from bankrupt customers is much easier. These are business law issues that business leadership within the 26+ EU/EFTA nations cannot solve, as this is a legislative issue.
> I think EU leaders and CEOs have no accountability, hindsight or self reflection capacity to see how badly they're failing so then just blame bad luck because it always has to be someone else's fault.
To a certain extent yes, but that's because they don't empower the private sector beyond a handful of politically connected firms to have an actual say or input. Lobbying happens in the EU as well, but it is much harder for startups and companies that aren't national champions to get a say.
Of course, this depends on the country as well as the EU as a whole, which is the crux of the issue - should national law or "EU law" be prioritized? In action, enforcement and regulatory capacity is devolved from the EU to individual member states, and logically, companies do jurisdiction shopping, hence why you see American companies over-represented in Ireland and a strong tech ecosystem in Czechia, Poland, and Romania.
>but the Eurozone Crisis (2007-2014, 2018 for Greece) was also extremely severe and out of corporate leadership's hands.
What does Greece's economic crisis have to do with the way European companies are run?
>In the US, enforcing vendor arrears and collecting dues from bankrupt customers is much easier. These are business law issues that business leadership within the 26+ EU/EFTA nations cannot solve, as this is a legislative issue.
I think you'll find it's exactly the opposite.
In many EU countries, if you're behind on payment, the government's debt collection agency comes after you and seizes your assets to pay off your debt, while in the US a lot of people have 5 figure debts spread over 20 different credit cards, debt they'll never repay because the collection process is up to the CC companies, not on federal government, so CC companies give up after a while since the cost to chase down people to collect a 1000$ debt is not worth it.
This doesn't work in the EU. If you have 20 Euro unpaid debt, the state's debt collection agency will slap a 1000 Euro collection fee on that and seize 1020 Euros worth of your assets be it from your home, bank account or from your pension fund.
That's how Swedish payment provider Klarna si going bust in the US due to how many people are defaulting on their debts from buying burritos and pizzas off DoorDash, probably because Klarna naively assumed it was gonna be like in Sweden where the government goes after you to collect the 20 Euros you owe.
> What does Greece's economic crisis have to do with the way European companies are run
Velti and a number of other mobile AdTech and app vendors were clustered in Greece+Balkans. Greece was also in the process of spinning up a tech investment promotion policy comparable to what Israel and India did in the 1990s right before the Eurozone crisis happened.
Velti was the largest AdTech platform in the late 2000s and early 2010s - outcompeting Google AdSense and what became Google AdMob, but they went under due to their heavy European presence. Same with plenty of other European startups.
An entire generation of potential unicorns died out.
> Correct me if I'm wrong
I'm talking about corporate bankruptcy. It's much harder to shut down a business or go thru bankruptcy and arrears when you maybe to deal with a state collections agency due to the associated compliance and red tape hurdles.
Consumer Insolvency tends to be pro-consumer in the US, and Business Insolvency tends to be pro-business in the US.
>Velti and a number of other mobile AdTech and app vendors were clustered in Greece+Balkans
I don't know enough about these companies because I never heard about them so I can't contradict this but googling tells me they're Irish, not Balkan.
And on the other hand, best to look at how important and influential they are to the EU economy, because at the end of the day that's what matters and what drives the economy, politics and citizen votes.
The truth is, nobody cares about the failure of some random ad companies with a workforce of ~100 maybe, that barely pay any taxes locally.
So I don't see how some no-name ad companies are relevant to this. If they were to be highly profitable for the EU, pay a lot in taxes in the EU, and hire tens of thousands of EU workers, we would have heard about them and they would have had lobbying power and support form workers like the likes of VW, Renault or Airbus do. But they're most likely irrelevant in the grand scheme of things so I don't see how they fit in this discussion, as small companies go bust every day around the world, be it US, EU, Asia, etc.
> It's much harder to shut down a business or go thru bankruptcy and arrears when you maybe to deal with a state collections agency due to the associated compliance and red tape hurdles.
It really isn't more difficult since the government helps you with the shutting down part the moment you are unable to pay workers' wages.
>Consumer Insolvency tends to be pro-consumer in the US, and Business Insolvency tends to be pro-business in the US.
Maybe true. Which is why very few Europeans want to start businesses and hire workers, when they face the wrath of the government the moment the finances of their business go south and can't pay the workers wages.
But from the proof I saw, the defaulting on your debt situation is bad in Europe whether you're a business or a consumer, while in US is not that bad as you have a lot of opt-outs legal and otherwise.
To a certain extent yes.
But that's because of margins. An large automotive parts vendor or a major biopharma company isn't generating revenue on software, so software engineering is treated as a cost center.
It's the same in the US, but at least you have tech first companies that generate most of their revenue of tech.
Europe's tech industry died out because of a mixture of mismanagement and bad luck. Velti [0] used to outcompete AdSense, but their management was incompetent and borderline fraudulent, and that's why the AdTech industry boomed in the US and collapsed in Europe.
The same thing happened to Nokia, Ericcson, and others.
The good European startups like Datadog, Spotify, Databricks, and UIPath all ended up relocating to the US so an entire generation of startups doesn't exist in the EU.
> they instead try to increase the profits by cutting all possible costs from purchasing to labors' wages and offshoring, since I assume that's also what's taught in European MBA schools
I've dealt with MBA grads from the EU and US - they aren't taught any of this. IMO, the issue is most leadership in European companies tend to be ex-accountants from KPMG/EY/PWC/Deloitte/Mazars-type companies, because manufacturing industries like pharma, automotive, etc have severely low margins.
[0] - https://www.businessinsider.com/how-velti-one-of-the-largest...