A cry for Europe

As the reality of my move to the US in July comes into focus, I have started to look at the “old continent” with an increased sense of poignancy.  Like most Belgians I am a natural cultural chameleon, and I truly think of myself foremost as a “European”.  And I am deeply, deeply concerned.

I am hugely thankful for the benefits of the “European project”, which many people forget.  Freedom to move to Barcelona tomorrow and start a business the next day: how amazing!  And of course, I have seen serious improvements at the micro level in the innovation ecosystem that I live in.  The emergence of smarter angel money such as the recently announced Niel / Berrebi fund, great initiatives like Seedcamp, ambitious entrepreneurs like Daniel Ek and Martin Lorenzton or Christian Segestrale, and so on.  I continue to believe for example the European Venture offers some great return opportunities for the better funds out there.

But at a macro level, I think we are merely continuing a long, drawn-out fall. 

Ingredients of the Decline

[please forgive me for the generalisations]

A Youth with No Ambition.  In a striking poll of striking French students (yes, students strike too, in France), young people were being asked what they wanted to do in life.  The answer was overwhelmingly “devenir fonctionnaire” i.e. to become a civil servant.  When asked what their core concern was, the answer was “whether they would have a pension”.  How depressing.  I had no clue what a pension really was at that age, I just worried about financing my rock concerts addiction.

A People Living in the reflected glory of Its Past. From a surreal conversation with one of the senior people in charge of innovation at the European Commission: “the only reason why you are negative on European innovation is because you are taking a narrow historical perspective.  If you look at the last few centuries, it is undeniable that Europe is the epicenter of ideas and innovation”.  He was dead serious, not a hint of irony.  I replied that Gutenberg Inc. printing presses did not, as far as I knew, create that many jobs in the last few years.  He was not amused.  Tourism, now there is a growth industry…

Absence of Political Leadership.  It’s impossible not to feel disenchanted by the travesty of leadership that the European Union presents to the world and its citizens.  From refusing the outcome of referendums (Ireland) to timorous and hypocritical foreign policy, Europe is being killed by a culture of weak consensus. A technocracy that has taken on a life quite independent of the wishes of the citizens it’s supposed to serve.

Culture of Denial.  Somehow there is no real problem and really we are the only ones who are green and have a sustainable social system.  Far from me to decry the benefits of a more balanced system that has a strong social net and keeps people more than one paycheck from poverty, but I find very little courage in either our political class or our thinkers when it comes to taking responsibility for our our decline.

Continuous Talent Loss.  For one Daniel Borel who comes back and creates Logitech, how many Philippe Kahn’s ?  I know of a number of brilliant guys who say “I would love to come back, but I just can’t face, I just can’t do it here in the same way”.  Just ask Loic Le Meur why he moved to San Francisco.  Sheer exhaustion at the unseen “weight” that the old continent was putting on his shoulders.  The attraction is all about better food than the UK, better health than China, better culture than the US, whatever your passion.  It’s never “it’s a great place to do business”.  Lifestyle attraction (OK, Barcelona does have some winning arguments :-)) can only take us so far.

Major macro challenges to boot

Age and Pensions.  Talk of delaying the pensionable age only has so much to do with the current financial crisis or the offshoring of jobs or other simplistic crap I read in the press.  When I started at JP Morgan in 1996, the fixed income strategist told me something like this: “the overriding macro theme of financial markets over the next 30 years will be the unescapable impossibility of funding the pension gap”.  

Again, the current state of denial means no politician is able to state a simple fact, that a system designed to fund pensions at 60 when life expectancy was less than 70 and we were having babies is an impossible burden when life expectancy exceeds 80.  Here again, Europeans are in denial.

EURO cannot defy gravity.  Politics drove Euro adoption well beyond its natural habitat.  The EURO was a fabulous idea that was marred by a desire to make it the political symbol of the success of Europe.  Instead of stopping at a single market and building from there, it somehow became necessary and desirable for less mature economies to be part of this construct.  So now, poor Greek entrepreneurs are supposed to stay competitive against Germany on merit alone.  Good luck.  I personally think that countries should be allowed to fall out of the EURO and that this is highly preferable to unsustainable bailouts.

We’re fucked if we don’t wake up soon

The rest of the world works harder, smarter, produces more engineers, is hungry, is globally mobile, has inherent competitive advantages we often don’t have.   I really don’t want Europe to suffer the same fate as Japan or to keep kidding itself that it’s holding its own on the global scene because it’s somehow more diverse or some other B/S.

The mantra of the Lisbon objectives sounds increasingly thin and stretched when compared with our reality.  The multiplication of innovation programmes and annoucement of grand technopole initiatives rings incredibly hollow to my ears.

I spend time a few weeks back with the head of innovation at one of Europe’s very best Universities (the local MIT).  He was upbeat but realistic: “sure I keep finding good entrepreneurs and funding them.  They’re smart.  But most of them don’t have a clue what’s going on out there, they are just an order of magnitude away in terms of intensity, speed or passion.  And they really don’t get it, they don’t know what it’s like in Palo Alto or Shanghai”.

It’s going to be a long path if we want to get our mojo again.  We need to embrace change, to take risks, to fail.  Not to hang on to our past in denial of our current failings.  We need to get our future back.

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