Perestroika in European tech market? - September 9, 2024

Hello readers,

Well, if you thought or had the impression that Europe is in stagnation in the tech sector compared to the United States, there might be something to it, because a major report by the European Union, led by Mario Draghi, has just been published, urging a radical change in the way Europe operates. The details are well described on Twitter by Izabela Kamińska. I recommend you take a look. I'm not sure if it's good or bad, because "perestroika" was something positive for the economy and the region in general, but it didn't end very well, as we can tell today.

Oh well, onto the news.

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📰 Europe Plans New Tech Strategy

Mario Draghi is calling for "radical change" in Europe's approach to technology and industry. This could be the biggest shake-up since the Davignon plan, aiming to address what Draghi calls an "existentially threatening stagnation." The proposed new industrial strategy for Europe seeks to overcome long-standing challenges without dismantling the continent's social market model.

✅ Why it matters: A new strategy could help Europe catch up with the US and China in tech innovation. It could potentially unleash a wave of competitiveness and create a more unified tech ecosystem across the continent. This move might also attract more global investment to European tech ventures.

🧠 My take: A single European tech market could boost startups and attract more investment. It could simplify operations for tech companies and create a more fertile ground for innovation. However, the real test will be in how it's implemented and how it navigates the diverse regulatory landscapes across EU member states.

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📰 Nvidia vs Intel OMG

✅ Why it matters: As AI becomes central to innovation, companies providing the underlying tech are set for major growth. This shift will reshape the entire tech industry.

🧠 My take: Nvidia's rise shows the value of spotting and acting on new trends. It demonstrates how quickly fortunes can change in the tech world when a company aligns itself with emerging technologies.

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📰 Google Employee Reveals Internal Innovation Issues

A long-time Google employee, Richard Sproat, shares his experience with bureaucracy and misalignment hindering innovation at the tech giant. His account details a complex and often counterproductive project approval process, highlighting how even successful tech companies can struggle with internal inefficiencies. Sproat's decision to leave after 12 years underscores the seriousness of these issues.

✅ Why it matters: This insider view shows how large companies can struggle to maintain innovation as they grow. It provides valuable insights into the challenges of fostering creativity and efficiency in large tech organizations. The story also serves as a cautionary tale for other companies looking to scale while maintaining their innovative edge.

🧠 My take: It's a reminder that innovation isn't just about tech - it's about creating an environment where new ideas can thrive. Companies need to be vigilant about bureaucracy creep and ensure that their processes support rather than hinder innovation.

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📰 Heat Affects Learning Rates

Research shows a link between high temperatures and slower learning rates, with implications for education worldwide. The study, covering 58 countries and 12,000 US school districts, found that an increase in hot school days corresponded with a decrease in learning rates. This finding has significant implications for educational achievement across different socioeconomic groups and geographic regions.

✅ Why it matters: As we deal with climate change, we need to understand its effects on human development, including education. This research highlights a potentially overlooked consequence of rising global temperatures on cognitive development. It could influence educational policies, school design, and resource allocation in the future.

🧠 My take: I need to move to Sweden.

💡 [Click for more information] and [here]

📰 Wealth Concentration After (or Maybe Before?) Market Crashes

Analysis shows the top 10% have consistently increased their wealth share after major market crashes. This trend has been observed across multiple economic downturns, including the Dot-com bubble, the 2008 Financial Crisis, and the COVID-19 pandemic. The data reveals that economic shocks tend to exacerbate wealth inequality rather than equalizing it.

✅ Why it matters: This looks like a not a great sign:

🧠 My take: Run

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📰 Bolt's High-Stakes Fundraising

1-click checkout company Bolt is attempting a "complex fundraising" round that could bring back its controversial founder, Ryan Breslow, as CEO. The deal involves a $200 million investment from a UAE-based special purpose vehicle and $250 million in influencer marketing credits from The London Fund. However, questions have been raised about the transparency and legitimacy of some aspects of the deal.

✅ Why it matters: how strange ZIRP era was, really. And that, maybe, main innovation was not on the tech side - but rather on the ability to creatively raise "rounds"

🧠 My take: One have to admire chutpzah of Ryan Breslow.

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📰 Debunking AI Myths

A new analysis breaks down common myths about AI, from control myths to futurist myths. The article examines various misconceptions, including the "prompt myth," the "learning myth," and the "scaling myth." It argues that these myths often stem from oversimplified metaphors and marketing narratives that don't accurately represent AI's capabilities and limitations.

✅ Why it matters: As AI spreads, we need a clear view of what it can and can't do for responsible use. Misunderstandings about AI can lead to unrealistic expectations, misguided policies, and potential misuse of the technology. By challenging these myths, we can have a more nuanced and productive discussion about AI's role in society and business.

🧠 My take: Narrative creation might be the biggest skill Silicon Valley leaders have (check if not Paul Graham post)

💡 [Click for more information]

Quote of the week

"Europe is facing existentially threatening stagnation - symptoms ignored for too long. The situation is worrisome." - Mario Draghi

Eye-popping number

400X - The CEO pay ratio that soared during 2014-2018.

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Radek Zaleski