Europe, please get your incentives straight

We are so dependent, it’s not even funny. But there’s hope.

From your phone (iPhone, Android) on which you use social platforms (WhatsApp, Instagram, TikTok), that run on the cloud (Azure, AWS, Google Cloud), or using AI (OpenAI, Anthropic) that are trained and run on AI hardware (NVIDIA, AMD) where the chips are mainly manufactured (TSMC). Nothing is European.

Even this post, shared on LinkedIn, hosted on Azure and distributed worldwide using Cloudflare. All American companies.

Then there’s the whole Office suite by Microsoft: from Teams, and Excel to SharePoint and legacy systems like Windows XP that still power much of our infrastructure.

Sure, maybe they have their datacenters in Europe (eu-central-1), but even then, look at TikTok: they built massive datacenters in America operated by Oracle to please the U.S. government, but journalists and researchers found that offices in China had admin access to all the data. So much for data sovereignty.

You can say “Ok ok we know it’s bad, we just lost the 2000s internet race, but that’s just the old big tech companies, now for AI it’s going to be better”.

But then I see many startup founders and brilliant people turning to Silicon Valley to start their companies there because it’s easier. The funding is more accessible, and the current engineering salaries are just too attractive. And honestly, the companies are also more interesting from a technological standpoint. They’re pushing boundaries in AI, robotics, and deep tech that European companies often avoid due to regulatory uncertainty or they don’t have the money. I wouldn’t want to work at SAP, for example.

But here’s the thing: there are signs of change. Things are getting better. There is movement.

TSMC is building an innovative chip fab in Dresden, we have European investments for AI gigafactories, and innovative companies like Mistral are working on foundation models alongside success stories like DeepMind (which we sold to Google), Spotify, and ASML that prove European (yes, including post-Brexit UK) tech excellence is possible. My home region Heilbronn is getting a whole new innovative overhaul financed by LIDL money, and the newly founded SPRIND is trying to innovate at many (too long technically neglected) fronts like education.

“Show me the incentive, I’ll show you the outcome” — Charlie Munger

Look at the young people and talents flocking to Silicon Valley, and our own businesses and governments using American companies and products. They’re not to blame. The current incentives that we have in Europe are the problem.

When it’s harder to found a company in Europe, when it’s harder to get investment, when there are more legal hurdles and long bureaucracies, what do you expect? For example, it takes 8-10 days to incorporate in Germany versus same-day incorporation in Delaware, and German startups face complex employment laws that make hiring their first employees not exactly a pleasant experience.

Take the recent push: some companies and governments have announced they are quitting Microsoft and going to LibreOffice and Linux. I think the move is great, but what saddens me is the quality of alternatives we have. Honestly, they just look ugly, and so I don’t wonder that most will keep using what works.

We just don’t have the incentives set up in the right direction. At least not yet.

Here’s what we need:

We need to fix bureaucracy. It should be fast, digital and painless. And we need to do this across borders. This needs a clear signal from above and competent people who execute on that (competent people at the government level would obviously also be nice). And please, just fire people who sit in public offices who are so unmotivated that they drive out people who want to change things for the better. I would rather give them money to watch us build the future than have them standing in the way.

We need a strong investment structure for startups. We have exceptional talent. If we don’t invest in them, they will go abroad and build their unicorns there. So many want to stay in Europe. Let’s give them a reason to, without them feeling they are sacrificing career/ business options.

If we fix this, we will get our desired outcome.

A world that might be a bit more balanced. And hopefully a bit more peaceful, where technological power isn’t concentrated in the hands of a few nations, and where European values of privacy, sustainability, and governance can shape how technology develops.