Many stereotypes on the culture and work ambition of Europe are unfair.
“Europe is less hardworking, less ambitious, more regulated and more opposed to the risks than the United States, with the gap between the two continents which only widens.” They were the words of Nicolai Tangen, the boss of Norges Norges Bank Investment Management of 1.6 TN an interview With the Financial Times in April. As one of the largest investors in the world, with growing assets in the United States compared to Europe, Tangen’s views count. But is he right, and what does that mean for European startups?
Just stereotypes? Or the reality?
We know all the common stereotypes to do business in the two regions and, from my wide trip to the United States, some are difficult to disagree. There seems to be a higher will to take risks, greater curiosity and less stigma around failure. For example, just a new thing that I noticed is that Americans are much more open to the implementation of meetings than Europeans, because there seems to be a greater openness and will to listen to new proposals.
But at the same time, many stereotypes are unfair. For example, Tangen’s point on the United States with the hardest workers does not necessarily sound with reality, with figures showing that workers in Eastern Europe work And other regions are allegedly more effective. It is also difficult to support the affirmations that Europeans are less ambitious or more opposed to risk if we consider this one on five US Founders Unicorn are European. Figures like this suggest that the image is not as simple as it may seem.
Ten years strong for European startups
By examining the growth figures, there are also many reasons to be positive on the commercial landscape of Europe. While public procurement has undoubtedly fallen behind the United States, in many ways, history is the opposite for startups. In March 2022, Goldman Sachs noted that the European startup ecosystem had increased twice as fast as the United States in the previous seven years, while the two markets fell with a similar percentage since then.
In addition, Europe Share of the venture capital ecosystem has increased since 2021, its Net feedback surpassed the United States – 6.24% in the past five years – and it is ahead of New training in technological startups.
The United States still pulls the big dollars.
The big difference is the size and the scale. In 2023, European startups collected less than half of the United States funding ($ 52 billion against $ 138 billion) and, although average yields in the EU are stronger, the amount invested by business United States is nearly 5: 1. The greatest successes are also still mainly through the Atlantic, which has four of the five largest companies in the world – all at the origin supported by a company.
An important factor is that Europe has a history or a “history” of lacking major technological developments, including PC, software and internet waves, putting it in a weakened position to develop critical transversal technologies. We currently see this trend taking place in the development of a generative AI, which has seen 90% of ordered venture capital in the United States, and almost twice So many AI-generating startups have founded there as in the European Union and the United Kingdom have combined.
On the other hand, Europe excels in the construction of solutions focused on key sectors, such as endological technology and climate technology, by taking advantage of fundamental technologies in an intelligent manner. He is also a world leader in university research, due to advanced universities and STEM talents; European countries dominate the Top 20 nations for AI researchAnd Europe now has more AI talent than the United States, according to An Atomico study.
Structural challenges
This raises the question, what holds Europe?
Some demand the regulations are the problem. Europe has led the world with the GDPR and started it again with the recent AI law. Many say that this makes the development of cutting -edge technologies more difficult, although conversely, many would say that the advantages prevail over the drawbacks, in particular given the current AI fears.
The entrepreneur and VC of German origin, Andreas Klinger, recently argued This regulation itself is not the problem, but the number and variety of rules and regulations in the European region. After all, the United States is a country, while there are 27 distinct jurisdictions in the EU, or more than 40 years if you count more in Europe. This has huge obstacles to business, including many languages, cultures and legal systems to navigate. Klinger called for a “EU inc” system, to rationalize by doing business through the block.
Funding is another important challenge, with much more limited and cautious private capital here than in the United States. In Europe, government agencies are the greatest contributor to venture capital, contributing 37% of funds In 2023, according to Invest Europe. These funds can have different criteria of their American counterparts LP, such as pure R&D, regional development, young people’s employment or the objective of the primary sector. On the other hand, American VC funds have substantial support Institutional investors led by private, such as pension funds and insurance companies, giving entrepreneurs greater freedom to take risks and evolve.
Look beyond stereotypes
It is easy to fall back on stereotypes during the comparison of the United States and Europe to do business, but a deeper analysis shows that it is not as simple as hard work and ambition, And there is a complex network of factors at stake. The American and European markets are very different in several ways, and unless these structural differences are approached, we are always confronted with enormous challenges to reach the summits of the States- United for investment and growth of startups.
In the meantime, we must maximize the enormous forces and potential we have, while continuing to fully explore the investment, partnership and growth opportunities that are across the Atlantic. As a European investor investor, the United States will always be essential for the expansion of our portfolio companies, for relations with LP and companies, and to establish links with co-investors, executives, heads of opinion and bankers. We are the strongest when we work together.