From time to time there are some people on European territory, who cherish a dream to create an analogue of Silicon Valley. Still,while indulging in such day-dreams, the majority of them forget that the Silicon Valley appeared not only because of technology companies. A lion’s share of its success depends on the sum of venture capital, which supported innovational technologies. And as the investment atmosphere in USA and Europe has a number of differences, we can distinguish 3 main reasons, which explain why the appearance of European Silicon Valley for now is impossible.
1. INCAPACITY TO TAKE A RISK
While performing on one of the startup festivals, which took place in Amsterdam, Eric Schmidt, the chief executive of Google, has shared with an interesting thought. According to his words, a modern model of business demands, first of all, taking risks, serious investment in universities and, as a result, skill yough graduation with credits (material as well) for making true brave and sometimes crazy ideas.
Let’s focus on the meaning of the phrase “taking risks”. If to look closely at the Silicon Valley, it seems, that it consists of many young companies, which, despite their greenness are being supported by the investors. Therefore investors are ready to support only one, but indeed interesting idea. But in this case the startup guys don’t have a backup plan: in case it fails, it would be extremely hard to fix it.
The same time in Europe the startup guys can rely on numerous social programmes, ready to help people whose business is ruined. So meantime startups from Europe can work easily, without thinking that they should pay a serious price for failure, americans have to take risks. There’s no doubt, that they achieve success more often.
2. A HIGH PRICE OF FAILURE
Due to american mentality, risk is an integral part of business. So that the person which failed, but managed to recover and succeed will gain more respect than those who were lucky from the very beginning. It’s totally different in Europe, failure is something like a black spot in the Old World. Undoubtedly, a person who failed the first attempt, wouldn’t starve (because of the programmes mentioned before), but most likely a second chance is never going to happen. The investors, simply, wouldn’t take risks.
Moreover, in central Europe exists practice to block access to business for citizens, who had issues with law for this or that reason. We should mention a case of Vaclav Muchna, CEO of czech company Y Soft, who got in the big car accident in the age of 18. As a result he was found guilty and, due to czech laws, didn’t have a right to obtain a leadership position. It was actual until a criminal record was expunged.
In the New World there are simply no such game rules. A businessman has a right to create a new business even if the previous company is on the bankruptcy stage. Moreover, in USA a car accident conviction is not a barrier for making personal business.
3. ISOLATION FROM FOREIGNERS
Despite the EU ideals, related to simplicity of making business on the whole territory of Europe, the local market still consists of the separate national markets. Also the law of different countries is not so loyal for their neighbours. France for instance, where laws serve as the barrier for young foreign companies. As a result creation of technical giants inside Europe turns to be impossible.