The SMEChain Ventures reposted this
Global CEO at Renaissance | Positioning global B2B brands to win | Stanford GSB | IMD Alum
This image stops me cold every time I look at it. On the left, a galaxy of American companies worth $10B+ founded in the last 50 years. On the right, Europe's contribution looks like a rounding error. 'Europe is in decline.' At least that's what everyone keeps telling me. As an Indian who's lived in Europe for the last 5 years, while consulting across three continents, I find this narrative fascinating - and incomplete. Look at the numbers: Of Europe's top 50 companies, barely a handful were born after 1980. America spawns trillion-dollar tech giants while Europe regulates them. China builds vast digital ecosystems while Brussels writes privacy laws. But here's where it gets interesting. In September, I visited a legendary watchmakers' factory in Switzerland's Vallée de Joux. In an age of AI and automation, here were craftsmen spending months perfecting a single watch movement. Not because it's efficient, but because that's how it's been done since 1875. This isn't just culture. It's structural DNA. A German Mittelstand CEO once told me: 'Why would I want to 10x my business when my current size lets my employees leave at 4 PM for their family?' Try explaining that to a Silicon Valley VC. Europe's regulatory maze is legendary. Want to launch a fintech? Navigate 27 different regulatory frameworks. Building an AI startup? Wait for the AI Act to pass while American and Chinese companies race ahead. Yet the same forces that strangle innovation have created something remarkable. 30 of the world's 50 most liveable cities are European. The continent has mastered something more elusive than unicorn creation - the art of balanced living. I see this daily living in Lithuania. My American friends measure success in stock options. My Indian network celebrates 80-hour work weeks. Meanwhile, my European colleagues vanish to their summer houses every weekend, treating leisure with the same seriousness as their quarterly targets. What if Europe's 'decline' is not a bug, but a feature? What if the continent that gave us the Renaissance and the Industrial Revolution now offers a different kind of innovation: the radical idea that progress isn't always vertical. Most economies optimize for growth. Europeans optimize for life. Maybe that's not decline - that's a choice. #Europe #Innovation
It's a mindset...the assumption is - "more is better", "bigger is better", "there is no limit" and there are no consequences for this growth - while we see consequences everywhere, in terms of waste, overproduction, pollution and erosion of nature that keeps us alive in the first place. Companies and money are human creations that are paradoxically disconnected from nature while being dependent on nature.
You’re onto something… Cities and companies are fundamentally different and they need each other…they are complements and not substitutes (in economic terms), and perform different functions to enable liveable cities… Our economic system should be subordinate to experiential urban living - an ecosystem that enables human flourishing… There maybe some truth in the decline hypothesis, but there is definitely truth in the liveable cities reality… For a planet of 10b humans, do we need more unicorns? Or more liveable cities that are able to decently house communities even if they don’t have ‘conventional’ employment? Does this even have to be mutually exclusive? Citizens (not employees) come first, and may be able operate as gig workers, have a high quality of life, public housing in well connected cities contributing to their places and communities and to a lesser extent to their clients and companies… Do we update our understanding of the social compact we have with each other, a part of which is transactional and based on value exchange through the economic system? Those bubbles will look very different in relative size if you put sociality, culture, community and nature as value determinants…
Jatin Modi, I would love to see the same graph but change one parameter: how many companies founded >50 years ago with a 10B+ market cap (or maybe market cap is a misleading parameter?). Would EU dominate the US in the number of companies that have created stable value for more than one generation? My (wholly unscientific guess) thinking is yes. I also think that this only tells one part of the story. If we look at the life expectancy of EU citizens, the per-capita healthcare spend, the measures of deaths of despair and depression rates, we may see a very different story about US vs EU and whether EU has stagnated or is simply playing a different (albeit, less sexy) game than the US.
This is one of the clearest explanations I’ve seen regarding the differences between the U.S. and Europe. However, it's important to acknowledge that Europe's decision to prioritize quality of life comes with significant trade-offs. Specifically, this choice relies on a large, productive workforce and high taxes. With Europe facing its lowest birth rate in history and a rapidly aging population, we need to consider how this demographic trend will play out if it continues. While prioritizing life is an admirable ideal, the question remains: How sustainable is it? And what can Europe do to maintain this balance in a rapidly changing world?
Nicely captured. It is a feature if you decide it's not a bug. In other words, Europeans themselves aren't yet aware that it needs to become a feature worth defending and building forward. We don't have to play by the same rules, and instead nurture our singularity as Europeans. It's a win for all if we do, it's a loss for all if we don't, that includes the US of A, China, India, and the ROW including countries in Africa and South America.
Very interesting insight, Jatin Modi! While there's a lot of truth to your argument, it raises some questions: 1) If we extend your logic, could developing countries, who often show remarkable joy despite economic hardship, also be seen as optimizing for life rather than growth? They smile more, yet face systemic inequalities, limited opportunities, and vulnerabilities. Similarly, Europe's balance may feel sustainable now, but can it withstand external pressures from faster-growing economies like the U.S. and China? 2) Over the last 20 years, the GDP per capita gap of the US vs Europe has grown to over $20k (see chart below) and may reach $40k in the next decade. Can Europe sustain its model when its U.S. counterparts enjoy resources that enable greater innovation and investment in public goods? 3) While Europe currently prioritizes balance, younger generations increasingly value entrepreneurship and global competitiveness. Without structural adaptation, Europe risks losing talent to regions with greater opportunities. A brain drain could further widen the economic gap and strain Europe’s ability to sustain its quality of life.
This is a key reason I moved from the U.S. to France. The U.S. is about quantity of life. Europe is about quality of life. It's your choice.
Europe still has neoliberal capitalism at its heart; the endless drum of economic growth continues to beat despite endless pretences of "acting" on climate change. I'm not doubting there are significant cultural differences across continents; the cultures of different countries within Europe are vastly different, from Spain where siestas are commonplace whilst UK politicians bemoan remote workers for resting "too much". Unfortunately what is common across European countries is economists' and politicians' obsession with economic growth, which is parroted back on mainstream media. What we really need are economic systems that focus on human and planetary needs and wellbeing rather than the endless pursuit of growth, profit and wealth accumulation.
Coach and Organisational Consultant at Team Transformer | Partner, Culturalysts
2wThank you for a thought-provoking piece Jatin Modi. Like others I was struck by the idea that ‘Europeans optimize for life’. It suggests to me a level of intentionality that seems unlikely, even if it’s present consciously in some cases and unconsciously in more. Also, I find myself uncomfortable with the comparison of the USA with Europe - apples with oranges rather than apples with apples. The USA is a unitary whole in a way the EU isn’t and the cultural foundation of the USA is very different. These two factors alone are likely to explain the very different economic snapshot you provide. Much more compelling in my mind is the observation you make about longevity of businesses. It suggests a particular type of resilience. I think US businesses have a different kind - the ability to pick themselves up again when they fail and create something different/better. Their economic/regulatory framework supports/encourages this. Failure is not a source shame but a scar to wear without it. Random thoughts.