Ed Driscoll

Advantage: Den Beste!

In what surely must be the most-missed Weblog on the Internet, Steve Den Beste had a terrific observation about Europe’s lack of high-tech industries back in 2002:

If you work in high tech in the US, you soon become very good at understanding English spoken with a wide variety of accents. The number of immigrants with technical degrees is staggering, and they’re not being hired because they can be paid coolie wages (despite what some might have you believe) or because they can be abused. American companies are hiring them because they’re starved for good people to fill positions. That part is pretty straight forward. But it’s the other side of the coin which is more interesting here.

It’s just as easy to understand why people from India might want to come here to work, or from Korea, or Taiwan, or mainland China. (With regard to India, I’ve long had a suspicion that a disproportionate number of them might be from lower castes, who want to live here in part because we are far more egalitarian. But I’ve never asked any of the many Indians I’ve worked with about that, so I don’t really know.)

But why are so many of Europe’s best and brightest emigrating? When you look at that list of Nobel laureates, you find again and again “Born in Germany, residing in the US”, “Born in France, residing in the US”.

I can’t say whether it’s primarily money, since I don’t know how European companies pay their engineers and scientists. I suspect some of it is that this is where the action is; we’re the ones who are creating the cool stuff; Europe is mostly just following along. To some extent that’s self-reinforcing.

Europe is a high-tech disaster area. It’s a desert pock-marked with occasional oases. For an area with the kind of overall education level Europe has, and the kind of industrialization Europe has, and the overall average wealth that Europe has, and the transportation and communication infrastructure that Europe has, the amount of ground-breaking work in science and technology happening on the continent is embarrassingly small.

It’s not that they cannot do it. There are significant examples which demonstrate otherwise. The Ariane program has been a substantial technical success. Airbus is the only company in the world which is even challenging Boeing in the passenger jet business (though Airbus only was able to get going through substantial subsidies by the French and British governments). Philips has been creating cutting edge technology for years. At least three major pharmaceutical companies are headquartered in Switzerland. CERN is doing good work, and has one of the world’s best particle accelerators. And I have only the highest regard for the engineering which is being done by the European Southern Observatory for its sites in Paranal and La Silla, (not to mention their full intention of creating a telescope with a one hundred meter main mirror).

But what these few successes show is that the potential is there and that it is not being realized very broadly. The Europeans can do this stuff, but it seems as if they mostly don’t bother. You have a small number of companies which are competitive in production of high technology, but most of Europe’s companies seem to produce rather prosaic me-toos, using fundamental technology developed elsewhere (usually the US).

If you ask someone with any kind of technical background to list high-tech Japanese companies, they’ll have no trouble at all reeling off several names immediately (often brandnames chosen for the American market, like Pioneer), and several more after a few seconds of thought: Sony, Toshiba, Matsushita; the only reason there aren’t more names on the list is because of the Japanese zaibatsu system. Ask pretty much anyone to list American high tech companies and they may come up with 50 names before they have to slow down.

But ask people to list high-tech companies from continental Europe, and I think most people would have to think hard to list even one. I, myself, having been in the industry for 25 years can only list a few: Nokia, Ericsson, Siemens, Alcatel, Philips and then I run out, and honestly can’t think of any more right now. And among them, Philips as the only one actually doing cutting-edge research. (They developed the laserdisc, which led to the CD and DVD, among other interesting things.)

What the Europeans seem to spend most of their time doing is to refine or develop or apply basic technology coming from other places. Americans created the transistor, the laser, the MOSFET, the integrated circuit, the LED, the first computer built out of transistors, the first microprocessor, the hard disk, television, wide area networks, cell phones. Europe uses computers, but the only major contribution from Europe in my field is the development of the first block-structured programming language, ALGOL, which influence later languages like C but which itself was too bloated to really be very useful. And in general, I’m really pretty hard pressed to think of anything (except the laserdisc) which has come from the continent which ranks the same as that long list of American innovations, which is far from complete.

Where is Europe’s Intel? Where is Europe’s Microsoft? Where is their IBM? Their Dell? Their Applied Material?

Orrin Judd links to a current Reuters article titled, “Tech nightmare may ruin Europe” that says improvement won’t be on the way anytime soon:

The European technology sector is under pressure from strict labour laws and a lack of start-up firms, and needs a major push if it wants to create another Nokia or SAP, executives said on Wednesday.

Venture capitalists pump only one-fifth as much into start-up companies in Europe they do in the United States, and the founder and chief executive of unlisted, Luxembourg-based Skype said the reason for slow activity was tough conditions.

“We want our vacations and our social luxuries. This is not the best environment to start a company. It is much more difficult here than in the United States or China,” said Niklas Zennstrom at the Reuters Telecoms, Media and Technology Summit.

Or as the lines went in 1941’s Citizen Kane:

During the “News On The March” segment at beginning, a journalist asks Kane (in a scene in the mid-1930s), “How did you find business conditions in Europe?”

“With great difficulty!” Kane guffaws.

To paraphrase something that Glenn Reynolds noted earlier this week, there’s a great, Toffler-style book in Den Beste. As Glenn writes, “Publishers take note”.