There are 27/28 economies in the EU alone, ranging from Sweden to Greece, with very different cultures, laws and bureaucratic competencies, some of whom have successfully incubated very innovative businesses.
Perhaps innovative business (which I translate to “how to enrich myself via an ephemeral finance system without adding much new utility” these days”) isn’t a great target for governments to enable.
Social pressure downward to abide the desires of a minority of elites before the public used to be called authoritarianism, and it used to be reviled. Just because it lacks the overt violence of yesterday doesn’t mean it isn’t manipulative and damaging to society.
Profits are up. So is inequality.
It's probably due to the fact Germany focuses a lot more on industry technology rather than consumer-facing tech.
Driving through similar places in France the difference was striking. There didn't seem to be any of this decentralized economy. Again, I don't mean to draw conclusions, just stating my very limited observation.
Actually a not insignificant part of these backwater businesses are so called Hidden Champions[1]. Basically, small companies who are still leader in the world market for their very specialised product.
Do they do engineering or manufacturing?
And how could they maintain an advantage over so many others and of course over large companies ? Where's the r&d budget coming from ? And what about marketing ?
The companies themselves are usually under 50M Euro and have under 500 employees, and export-oriented. They've been a big target for Chinese acquisition, usually for companies that don't have any family to inherit the enterprise.
And this is basically a function of Germany's economic development. Germany industrialised quickly by extracting from consumers. Forced savings, cheap loans to entrepreneurs, etc. The model isn't optimised for competition and new entry.
Germany hasn't really moved on from that point. Industry and banking is still heavily concentrated (the level of corporatism is far beyond anything outside of East Asia). Capital markets still don't really exist (amazingly, given current ECB policy). Consumers are still paying a massive surplus over to the corporate sector (through low wages and forced saving).
Rocket Internet is the kind of exception that proves the rule. They were successful but only by doing something totally inexplicable in any other context (i.e. their shareholding model is a function of the awful state of finance in Germany).
Definitely, the govt have trying very hard on this for a while. But with no real results because the model seems to produce what voters want. There are signs that things are coming apart (particularly in banking) but before that point, nothing will change. It just makes no sense to compare Germany to an entrepreneurial society, that has never been the goal.
What is unusual is that Israel is the recipient of largess of the American tax payers and enjoys continual replenishment of available Capital. Enjoy it while it lasts.
But beside that, there's a simple explanation: it's quite hard to earn a decent salary in Israel, without being either an Entrepreneur , or by working in a startup company.
Germany(and maybe Austria) probably don't suffer from that problem.
On the other hand, entrepreneurs are usually independent people who really value freedom and don't like to work for others. Regardless if they can find a good job or not. So I'm not sure if my first theory holds. Maybe Israelis are just more independent then the average European (which can be explained by the culture and environment too).
Perhaps in Europe, people are less inclined to borrow large sums of money?
I would like to say that it is not necessarily true either. I do not have to go far, I could just take a look at my mother. Funny thing is that it was not even her who asked for a loan, it was my father, but they were married. They divorced, and fought the "bank" for years to no end. My mother is still the one who is suffering from the actions of my father. She will, to her last day. It makes me sad, her pension probably will be negligible.
Regardless, my mother would not get by at all on her own. :/ She works hard physical labor which affected her health A LOT. She is working hard just so a huge percentage of her salary can be taken away for something she did not do.
Bankruptcy protection for individuals is not available everywhere and it often comes with very onerous conditions.
Anecdotally I'm an Israeli who moved to Europe (first Austria then Germany) and at least from my layman's perspective both of these countries seem both a lot less entrepreneurial than Israel and a lot less corrupt...
So I wonder if something unusual is going on or if one or more of my perceptions are wrong.