Why is there no Silicon Valley in Europe? – VisualPolitik EN

By | October 23, 2022

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Silicon Valley is today the mecca of innovation and investment in new companies and products. Its consolidated position as a driver of new inventions and breakthroughs has become the envy of the world. The European Union, faced with the lack of novelties born in its territory, wants to imitate the Valley model in order to be able to place itself alongside the great world powers: the United States and China.

The European Union’s path to creating new products and systems has stalled over the years, and the Union knows it, having become the Detroit of the globe. The push for measures to create technology hubs has begun, but it faces several problems, such as the lack of a unified military and industry.

But the war situation in Ukraine could change the course of the European Union, it could redirect its path and move from becoming the world’s Detroit to possibly becoming the world’s Silicon Valley. However, there are many efforts to be made by all the countries of the Union.

Why has the European Union lagged behind the United States? How is the Union becoming the Detroit of the world in terms of innovation? Is the Ukraine war the big opportunity for the Union to take off? In this video we tell you about it.

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This video has been made possible by Brilliant a problem-solving based Website and app with Hands-On approach Improve your stem skills while having a Great time learning at brilliant.org Forward slash visualpolitiken more on That in a bit [Music] Here is the million dollar question in Europe why is there no European Google Why does Europe seem to be an elephant’s Graveyard when it comes to business To give you an idea of the five largest Companies in the world four are American And were launched after 1975. and Europe However it is common for the largest Companies to have been started much Earlier some such as Nestle date back to The 19th century and even the Pharmaceutical companies that created a Giant like Novartis were started in the 17th and 18th centuries no less Let’s see credit where credit’s due These companies deserve a round of Applause for having managed to survive In the market but it’s significant that No young European company is in this top Five well in the United States three of The five largest companies are younger Than many of you watching this video This indicates one thing the USA is way Ahead of Europe in terms of innovation This does not mean that there are no Companies in Europe that have not been

Innovative sap which is a program used By accountants in large companies or Skype which we all know were conceived In Germany and Estonia but they aren’t Much when compared to the United States Until now this was one more debate among Many in Europe but now it is the most Important debate that will be have Raised in the coming years and that is Because of the energy crisis [Music] The current crisis is affecting all Citizens with stratopharynic electricity Bills but do you know who else is Affected by these price increases you Guessed a visual politic viewers the Companies many of which may flee from a Dying European Union that no longer Offers them low-cost gas the European Union is no longer more competitive in The United States or China in a few Years time we could be talking about the Europe European Union as a continental Detroit in fact as was the case in Detroit the automotive industry is Extremely important throughout Europe And not only in France and Germany in Spain for example the automotive Industry accounted for almost eight Percent of the entire GDP in 2020. in Other words the comparison with Detroit Is no joke and if you’re a loyal Follower to this channel you will Already know what it means to be Detroit

Unemployment slums and crime so how can This trend be changed how could Europe Move closer to the Silicon Valley model Could the war in Ukraine revive the European union today we’re going to Answer all these questions but before we Continue whether you’re trying to Develop your professional skills or Broaden your understanding of the world We recommend checking out today’s Sponsor brilliant brilliant is a Problem-solving based website and app With a Hands-On approach that’s a better Way to learn they’ve got over 70 Interactive courses in maths science and Computer science and it doesn’t matter Whether you’re a student looking to get Ahead or a professional keen on building New skills you have to check out Brilliant it’s excellent maybe you’ve Always wanted to learn about statistics And trust me statistics can be tricky And lead you to dubious conclusions and No just in case you were wondering the Fact that one out of every five babies Born on Earth are Chinese does not mean That your fifth child will be Chinese But jokes are saved there are lots of Great stuff on their platform including Daily challenges which are a great way To flex our gray matter every day so Don’t wait any longer and let brilliant Help you master every complex technical Subjects by clicking on the link below

You’ll get started for free and hurry The first 200 people get 20 off an Annual premium subscription and now Let’s get cracking History of two places A visual politic had existed in the 1950s there would be two places we’d be Talking about non-stop Silicon Valley And Detroit and you may be wondering What do you mean Detroit well yes in the 1950s Detroit was mainly home to a large Automotable industry with a well-known Brand such as Ford and Chevrolet in fact A lot of people started to move there Just as they said to Silicon Valley with The population reaching almost 2 million People meanwhile the other successful Sister city in the United States from 1950s onwards was and still is Silicon Valley can you tell me where the initial Success of this value was to be found Well for those of you who don’t know it Was no less than in the war [Music] You heard correctly during World War II The United States was focused on Fighting Japan in the Pacific so California started getting a lot of Investment and workers to open all kinds Of factories and businesses to supply The military effort so you could say That Silicon Valley was in the right Place at the right time Not only was it Located in California but it also had a

Large university community in Palo Alto And therefore highly qualified Professionals and as War not only Demanded Commodities but also Technologies that were very Advanced for The time suddenly this place started to Take off for example many many companies Began to develop new semiconductors for Bombs here and so what would later Become known as Silicon Valley became a Key player during the war But that seed soon sprouted because Silicon Valley was a particularly Fertile ground for companies and one of Those responsible for this Entrepreneurial fertility was the man You see on the screen right now We are talking about Professor Frederick Terman the father of the connection Between universities and private Enterprise Thurman understood that Universities produced knowledge but that Is the entrepreneurs who convert this Development into Innovation that is into Products that are useful to society with This idea in mind he worked tirelessly To open the university companies and Strengthen ties with them in line with His vision companies would finance and Promote the University’s research Projects which would give the university Many more resources and a guide of where To go on the other hand collaboration With the university would allow

Companies to grow faster and therefore Eventually have more resources and so The cycle continued however in order to Get the whole process started we are Still missing a key factor something That entrepreneurs desperately need So the million dollar question is what Could it be that these entrepreneurs Needed funding and that’s where this Other gentleman you see on the screen Stepped in Lawrence Rockefeller the Creator of silicon Valley’s first Venture Capital fund van Rock Associated The rest is history [Music] To put out another way silicon Valley’s Success is not due to the fact that it Has many entrepreneurs there are Entrepreneurs everywhere the difference Is that in Silicon Valley the conditions Are right for a company to start from Scratch and end up listed on Wall Street Within just a few years this is the Story of Google Facebook apple and so Many other companies that have changed Our lives but the question is what does Silicon Valley have that does not exist In Europe flexibility comes first what Happens if you want to work for two Competing companies at the same time no Problem however if you want to fire Someone who is not being profitable and Hire someone else go ahead but that’s Not all there are two additional key

Factors in Silicon Valley University Industry collaboration and venture Capital on the other hand we have Detroit Detroit is the capital of the automobile A very mature industry where there was Hardly any disruptive innovation better Cars can be made but there are still Cars so companies like Ford Chevrolet And General Motors which were stocked at The beginning of the 20th century Continued to do what they knew how to do Cars and it didn’t take long for them to Encounter a fierce competitor offering Cheaper but just as good cars Japanese Companies companies like Toyota began to Dominate the U.S car market Thank you What’s more Detroit was left behind a Host of Union tax and Regulatory Problems of all kinds along with Ever-increasing crime rates and a Growing competition from new Asian Brands caused American companies to Begin closing their factories in the City because plain and simple they were No longer competitive in fact the Debacle was of such intensity that the City once home to nearly 2 million People now struggles to maintain Amiga 670 000 inhabitants As you can see both Silicon Valley and Detroit started out booming like no Other territory but only one has managed

To survive and the key has been what We’ve already mentioned innovation [Music] Well in a way we could say the European Union today faces a very similar threat Over the years regulations of attacks And labor policies have eroded the Competitiveness of established Businesses and now the energy crisis Threatens to be something of a final Straw this is a problem above all Because in Europe basically and Simplistically you could say that almost Nothing new is being produced [Music] So it is fair to ask is Europe heading The same way as Detroit Old Europe [Music] Pay close attention to the following Graph as you can see Europe not only Spends much less on defense of the United States but also the spending is Highly fragmented by country and almost All of it goes to salaries and current Expenses in other words there is little Left to invest in r d and the Development of new military programs so Let’s say that Europe does not have one Of the drivers of innovation that the United States does and here we have to Keep one thing in mind whether you are For or against military investment Unlike other types of public spending it

Is mostly an investment in highly Applied Technologies and that shows But not only that even if all European Militaries were to agree to develop a Joint weapon for example a new missile System they would encounter a huge Problem most European universities are Forbidden to collaborate on Military Projects just as you heard and the Internal regulations of many Universities is forbidden to do research For military matters nor can it be said That they are willing to collaborate With private companies easily and this Is a problem remember that most military Innovation ends up having civilian Applications take the example of GPS or The internet itself And of course we’re not only talking About military spending add to this the Fact that European universities are more Orientated towards teaching than Research we have talked about this on Previous visual politic videos Universities in the United States are Extremely expensive however that has an Advantage they generate results so Europe does not have this other driver Of American innovation either to make Matters worse the European Union is a Regulation machine practically its main Job is to regulate everything that can Be regulated which makes Innovation very Difficult for example it’s already

Working on regulating artificial Intelligence to companies that want to Start researching will have to face a Lot of obstacles and requirements of all Kinds then drugs are another good Example regulations are so intense that It can take decades for companies to Bring out new medicines barely any Investment in military technology Universities reluctant to collaborate And with a lot of Regulation let’s say That we could summarize the general Feeling in this sentence We cannot be leaders in Innovation let’s Be leaders in regulation statement of an Anonymous MEP to visual politic Union Regulations may actually repel Investment in its innovation of course There are always exceptions [Music] In Europe for example companies such as Sep the business management software Giant have been born if you work in a Large company you will surely be Familiar with it but it is curious that One of the largest Venture Capital funds Sequoia Capital does not even have Offices in the European Union they are Present in the United States the UK India and China but they haven’t even Bothered to open offices in any uu Capital and that illustrates why Europe Today has hardly any unicorns unicorns Are startups that are worth at least one

Billion dollars and I’m sure you can Guess where most of them come wrong That’s right the United States the Country that has produced the most Unicorns are whopping 487 this is Followed by China with 301 and we have To go to the fifth place of countries With the most unicorns to find a country Within the European Union Germany with 26 unicorns Foreign Isn’t there any country in the European Union that resembles Silicon Valley well Perhaps the most similar case is Estonia Here on visualpolitik we have several Videos where we explain in depth the Estonian model it’s a country that is Sought to move away from almost all of The policies that Prevail in Europe for Example it’s created a very attractive Tax framework for companies has Developed its digital infrastructure Beyond any other and it’s fought hard to Limit regulations or at least make Compliance with them easier so what’s The problem it’s an extremely small Country with only a little over 1 Million inhabitants so obviously its Influence is very limited So has Europe been resting on its Laurels not interested in getting a Silicon Valley of its own well visual Party viewers that didn’t seem to matter To the European Union until not so long

Ago [Music] As long as Russian gas flowed smoothly To the European Union and particularly To Germany companies would remain Competitive and the territory attractive For investment precisely because of its Low energy prices let’s just say that Cheap energy was making up for all the Other factors however gas prices have Skyrocketed and now most of the gas is Liquefied and does not come from Russia Which means paying much more for that Energy source and so now the risk of Companies leaving has multiplied Visual politics communicate the European Union is starting to look for a way to Become competitive again with the United States and China the question is how Will it do it will it try to create its Own Silicon Valley is this option really Possible well pay attention because the European Union has a golden opportunity A new beginning Do you know how many European unicorns Are in the top ten you guessed it indeed In the list of the top 10 unicorns is Dominated to no one’s Surprise by China And the United States Despite this absence it cannot be said That the European Union has not tried Since 2008 several programs have been Launched to finance r d and boost Innovation and of course many of the r d

Projects paid for with European funds Are interesting however most of them Usually remain a nice academic paper They never materialize into products That make a difference and that can be Bought and sold on the market among Other things because public programs Tend to be very rigid very bureaucratic And almost never focused on the market Itself the fact that civil servant or a Bureaucrat is responsible for selecting The projects to be financed does not Seem to be a Cutting Edge strategy in Fact one of the most successful Countries in recent decades has been Ezreal what they did was take these Bureaucrats out of the formula they made Public Funding complement private Funding and therefore it was the latter That was in charge of selecting the Projects that then had to be put their Own money in tune However stay tuned because this Situation in Europe could change for one Simple reason the war in Ukraine After Putin cited to invade Ukraine EU States reacted with increased military Spending we found news like this Germany Reverses defense policy with historic Military investment increase in response To Putin’s War suddenly All European States are going to double their Military spending it seems this new Military spending is going to go through

Three phases in the European Union the Initial one of fine-tuning all the Military assets in place no more Broomsticks yikes Germany’s army is so Under equipped that it used broomsticks Instead of machine guns a second phase Would be the renewal of outdated Equipment in other words buying f-35s From the US as if there was no tomorrow And finally a third phase of development Of their own Armament this is very Important because in this aspect the Development of new technologies is Fundamental in fact this could be the Seed that Europe needs for a Silicon Valley to Blossom [Music] It has taken Europe to enter into a Crisis and unite against an enemy for Its high representative Joseph Burrell To be heated either we invest heavily in Defense Innovation or we will become Defensively irrelevant Joseph Borrell EU High representative for foreign policy The problem Europe has 27 different Armies and it takes huge sums of money To create a fighter jet or tank that Compete with those of the US there are Several European Union programs to Facilitate r d between organizations in Different countries but the results have Been rather modest what could be the Solution joint projects between two Three or more countries this was the

Formula with Switzer’s relatively Successful projects were created such as The Euro Fighter or the eurodrone even Companies like Airbus which has a very Significant military division emerged With the collaboration of several States In this case we could see several European nations coming together to make A public competition to design a new Fighter jet or a new cyber security System being several States they can Invest much more money Well the fact is that this new flood of Money into military research could end Up supporting as it did in Santa Clara The emergence of new high-tech clusters In this sense military research has Several advantages over other types of Public spending firstly the development Of Applied research is sought in other Words money is spent with a clear Intention of creating new products and Technologies to be used for specific Products and services secondly military Research relies on private companies and Is closely linked to Industrial Processes and thirdly the ability to Export this technology is usually taken Into account this is because the Military-industrial process is very Capital intensive and for a new Development to be profitable it usually Needs to be mass produced well these Three major advantages mean that

Military spending tends to be relatively Efficient at least more so than other Types of spending when it comes to Boosting a technology industry of course It is not enough on its own more is Needed But what needs to change in Europe for All this money to be translated into Innovative companies [Music] Mainly two elements are needed firstly It is important the states are willing To cooperate in defense and that is not Easy let’s give an example imagine that Spain France and Italy got together to Develop an artificial intelligence Project where will the factory be set up Which university will do most of the Research would France really be willing To pay to finance a project that will Create jobs in another country these Kinds of discussions can delay projects For years and they end up generating all Sorts of cost overruns secondly it is Essential for universities to be able to Participate in defense projects European Universities have to get used to working With private companies [Music] And thirdly Europe needs to relax many Of the regulations that currently hinder This type of Activity one idea could Figure eight a special economic zone Following the model proposed by Liz

Truss in the United Kingdom economic Zones where urban planning rules Business rules or taxes are relaxed or Better adapted to the reality of this Industry this could make it possible to Turn the military race into a new Silicon valleys throughout Europe Now the questions though are over to you Will Europe see a Silicon Valley or will Europe’s declarations just fine words Will this compensate for the loss of Competitiveness due to higher energy Prices will the European Union manage to Avoid having several many silicon Valleys or will it end up becoming a Gigantic act Detroit instead you can Leave me your answers in the comments Below as always don’t forget that here On visualpolitik we release new videos Every week so subscribe to this Channel And hit the little bell button down There so you don’t miss any of our Updates if you like this video like it So we know all the best and I’ll see you Next time [Music] Foreign

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