Sweden and Germany, for example, are heavily regulated but have more innovation in terms of GDP% than the USA.

If you're talking about why we don't see more visible commercial innovation from European countries then it's more about access to the enormous amounts of capital to build a big name startup like Uber etc.

Nobody notices the legions of small bootstrapped or seed to profitable software businesses across the EU.

How do you measure "innovation in terms of GDP"? I certainly don't see trillion-dollar world-changing companies like Google, Microsoft, Apple and Amazon coming from those regions. What small business could replicate the impact of Windows, or Gmail or the iPhone?

It's worth noting that those companies have trillion dollar stock valuation, but by far less actual revenue. Average revenue per year of these companies is "just" 159 billions. Amazon has had a revenue of 88 billion.

German companies with more revenue than Amazon: Volkswagen, Daimler, BMW, Allianz, Siemens, Deutsche Telekom, Uniper, Bosch.

On the smaller end, Germany also has a comparable number of employer firms per capita as the U.S.

Empirically it largely is a myth that worker protection and consumer protection stiffles enterprises or innovation.

Amazon 2019 revenue is $280B, which is greater than every company you listed and tied with Volkswagen.

Valuation reflects market sentiment and potential but perhaps I should have left it out. The real focus is the "world-changing" aspect of the products produced.

What have been the recent global innovations produced by those German companies? Anything turned into a household name?

You're correct regarding Amazon's revenue, I somehow got the 2014 data, sorry.

I'm actually not quite sure what you mean with the "global innovations" part, though, could you expand on that? What is it that makes e.g. Microsoft innovative?

What I see is the your big four all sell consumer product/ services and thus are more visible. E.G. Bosch is developing electric powertrain components, produces radar/lidar and video sensors for autonomous driving. Bosch also produces the robots used in those mostly-automated factories.

Every Apple iPhone and Watch uses Bosch's gyroscope and accelerometer tech. They're also the market leader in smaller EV tech used in electric motorcycles, bikes and scooters. It all goes out to consumers without them knowing. Even Tesla use Bosch parts.

That's why they're called a "hidden champion".

The whole is greater than the sum of the parts. It's what you do with that internal tech that matters.

We've had gyroscopes for a century. The iPhone is innovative because it used that to implement a new device that changed mobile computing.

(not the parent)

I would think that since innovation and growth (caused by innovative use of resources or increase in efficiency or novel products and services) in general should be relative to the population and its state to begin with, nominal GDP growth per annum would be a reasonable metric as a proxy for the wildly non-measurable "innovation in terms of GDP"; for reference, here's the data for 2018:

USA: 2.9% Canada: 1.9%

Sweden: 2.2% Norway: 1.3% Finland: 1.7% Denmark: 2.4%

Germany: 1.5% France: 1.7%

Ireland: 8.2% (not a typo, likely explained by expansion of business services from NA into EU) UK: 1.4%

Portugal: 2.4% Italy: 0.8% Greece: 1.9% Spain: 2.4%

No need to approximate: https://data.oecd.org/rd/gross-domestic-spending-on-r-d.htm

Germany is at 3.4% of GDP spending on R&D and the USA at 2.8% France is also right up there at 2.2%

Spending on research and development is an awful proxy for results delivered by said R&D, which is what we would actually want to measure if we're looking for innovation relative to GDP.

Also highly dependent on the laws of the individual countries as to what counts as R&D spending.

Like the car? Volkswagen is twice the size of Microsoft by revenue.

I'm going with the OECD definition here: https://data.oecd.org/rd/gross-domestic-spending-on-r-d.htm

The car was invented in the 1800s, and has seen mature competitors in many other countries like Japan. In the current century, Tesla is the auto giant leaving behind all the legacy manufacturers while also branching into energy products.

Pivotal products are a better milestone than vague estimates of R&D spending.

There's no doubt about Tesla's ability to bring an innovative product to market but they're not a giant by any measure except valuation.

Little known German company ZF has almost double the revenue of Tesla. They also make the transmission for the Porsche Taycan EV that's outselling the 911.

That is a...wildly imaginative take.

Tesla sales are a fraction of any of the big three in terms of sales or revenue.

They sold 192,000 vehicles in the US in 2019. Each of the Big Three sold well over three million.

Tesla currently loses $2500 on every vehicle they sell

And for the numerically challenged like me who like to see visualizations. First line is 200k and second is 3M

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This thread is about innovation, not sales.

How are Tesla more innovative than other companies ? They kicked off a big conceptual change but I don't see that they have a significant technological advantage over other companies like Volvo.

>How are Tesla more innovative than other companies ?

People always seem to compare Tesla technology of tomorrow with what its competitors are doing right now. That's why Volvo "only" has level 3 self-driving, while Tesla has a fleet of robotaxis that are earning you money on its ride-sharing app while you sleep.

I joke, but a large portion of the Tesla fan base has no clue what is going on in the autonomous driving or auto manufacturer world outside of Tesla. Tesla has been a big innovator, but they aren't leaders in everything....not even close.

> "Tesla has been a big innovator"

The thread is about innovation, so that's what counts. And what other manufacturer matches what Tesla has driving on the roads today? The closest realistic challenger is the expensive Porsche Taycan which is still missing all the functionality and usability features.

I mean, I get your point, but unless there are enough sales, pretty soon there will be no money for innovation.

I'm not sure announcing products with no capacity to manufacture them should be considered "innovation".

>Tesla is the auto giant leaving behind all the legacy manufacturers while also branching into energy products

Tesla has sub-1% market share in the global auto market and rapidly declining energy product deployment (they deployed 4x more MW 4 years ago than the did last year). Let's not pretend Tesla has taken over anything yet.

How do you measure innovation? American companies are on average far wealthier than companies in Europe and spend more in R&D as a result.

> Nobody is stopping you from owning a factory

Seriously? Should they eat cake as well?

https://en.wikipedia.org/wiki/Let_them_eat_cake

Seriously, who's stopping you? It's ironic to say that on HN when YC has helped launch thousands of companies and several self-made billionaires.

The ability to hire and fire fast is undeniably helpful for companies, and being able to quit and move to new jobs is just as useful for personal career development. It might not be for everyone, but it's not any less valid.

The typical member of the precariat doesn't have the financial means of taking an unpaid sick day. How on earth do you imagine that they have the means of starting their own company?

The discussion was about at-will employment in America. There are pros/cons to both employee and employer, and it is an absolute truth that this arrangement helps companies grow and helps employees eventually start their own companies - as opposed to different regulatory environments.

Adding more regulations will bring equivalent trade-offs because that's the reality of economics. Do you disagree?

If you want to get bogged down in technicalities and anecdotes though, then sure life isn't fair. I worked manual labor before and now own multiple properties. I guess it's just magic.

No one suggested it was magic. What it often is - statistically - is socioeconomics. It’s more or less the single best predictor of outcomes for you and yours.

There are outliers, but we’re talking about broad systemic patterns.

You evidently went to an okay UC - you probably had supportive parents. Be it emotional or financial support. Perhaps both! Perhaps your family life was reasonably stable. Perhaps you had three square meals most of your youth.

The point is that you are in a position to access capital that is markedly different from a lot of individuals born into lower socioeconomics striations in society and the statistics are weighed :heavily: against them.

This is often through no fault of their own.

Thank your lucky stars the world aligned for you as it did. Where and with whom you started that life made a far bigger difference than any perceived grit you might think you exercised.

Let me just go find a cash machine and withdraw the $X million needed to buy me a factory. Nobody’s stopping me!

That's called venture capital, or a loan, or a mortgage; things that millions of others have used to start their own businesses. Happy to make some intro's for you. Let me know.

Loans with no collateral ... right.

Sometimes. Or you give up equity. Or secure it some other way. What's your point? That it's hard to do?

That you can't get a loan when you don't have collateral which is the case when you are not already wealthy.

Then get a job and save up some collateral. That's how many people start. This is really not that complicated.

But that's not always possible when you don't have a good enough job to save which is the reality for a majority of Americans since they live pacheck to paycheck.

All it takes is a small loan of a million dollars.

Sure, because nobody has ever taken a loan to start a business before. And VC funding doesn't exist. And mortgages are a falsehood. And companies are never bootstrapped either.

I guess eventually owning a factory is just impossible right?

Yeah and I could become a rock star if I started playing the guitar.

Getting loans is hard, especially if you're one of the working poor. Starting a company that doesn't die after a few years is harder. When you're one of the 40% of Americans who can't cover an unexpected $400 expense, if you company fails you're fucked. The social safety net in the US is a joke.

Yes, it's a trade-off. Less regulation and more freedom and flexibility at the cost of more social risk and personal responsibility. That's the American way.

I was simply stating that truth, not defending it nor saying other realities can't exist. But there is always a trade-off. What part of that is so controversial?

Perhaps things have changed and the balance needs to be shifted now. That's a great discussion to have, but let's actually have a discussion then.

You meant more freedom for those who are in a powerful enough position to take advantage of it.

That the other side of the coin is misery for those, who have not the means to exercise these freedoms, that is the problem your comments ignore.

There is always theoretical freedom and practical (real) freedom. It is not evident, that the USA offers more freedom to the average person.

It is easier to start and grow a business when there are less regulations around employees. Every employee in America is also free to walk away from their job without any notice. These are both facts and have allowed for vast commercial growth and innovation in America (and in countries with similar setups).

Whether you (can) take advantage is completely orthogonal to the original question of why the USA is "an aberration in this regard", and I would rather not devolve into yet another rehash about fairness and opportunity.

maybe the reason why so many want to start they own business is because u can get fired for no reason. being it's own boss gives you at least the freedom to not always live in fear of being fired if you do something that the company does not want, like getting pregnant, i have read enough stores of companies firing pregnant women and i cannot believe it's legal to happen.

in europe at least that part is gone, you start your own company not out of necessity but out of motivation.

Do you think it's easier to start a company and that is has less risk than just finding another job? Also have you seen the world-leading benefits at places like Google?

America just chooses more freedom than government mandated security. There's some slight trade-off but it is nowhere near as problematic as media makes it seem.

"Just buy your own factory" as a response to the power imbalance between the workers and the owners of the means of production is the controversial statement.

The actual quote is "nobody is stopping you" - because that imbalance means it's easier for you to also own the means of production. It's unequivocally true, and enjoyed by 10s of millions of small business owners and entrepreneurs which form the heart of the American middle class. It answers the why posed by the GP.

But yes, different places are different and life isn't fair. No need to cutoff any discussion of various economic systems and environments for the same basic retorts.

No, the imbalance doesn't make it easier for you to own the means of production at all. On the contrary, it allows for systemic exploitation that makes social mobility harder and increases the wealth imbalance over time.

Depending on your target industry, "a factory" can be as simple as some old yet reliable drill presses and lathes, and then hiring a machinist or two. How is the flexibility to do this "controversial"?

https://youtu.be/xXze8_SzW28?t=431 <---Granted he's got Youtuber money and other gun-sales related money to help, but the concept is the same....he's bootstrapping a factory after purchasing the relevant capital infrastructure using his own money.

> Granted he's got Youtuber money and other gun-sales related money to help

This is the difference. Most Americans don't have access to this capital, or access to means of borrowing this capital, and if they do have the means then they might not necessarily be able to shoulder the risk.

It's not like the capital just fell into his lap from a friendly Wall Street banker. Those businesses are ALSO self-started (to the best of my knowledge), especially his Youtube success. He's a prime example of someone working hard, spending less than they earn, accumulating resources, and then expanding that into ownership of the means of production as well as employing others.

It's not for everyone. Sure, most people have no appetite for the level of risk involved even if they can scrape together the money to buy some revenue-generating asset (I know a guy who left the Marine Corps as a truck driver...moved back to Japan, bought a truck, and then opened a moving company). Most people don't have access to capital....nor will most people ever have the intellect to write tight software code, no matter how many government-backed Code Bootcamp Initiatives there are.

To bring this back to the original point though, telling someone to bootstrap a factory, which is demonstrably doable in the American economy even today (for flexible definitions of "factory"), shouldn't ever be a "controversial" piece of advice. Especially on an pro-entrepreneurship site like YC/HN.

How do you get a big loan without collateral?

VCs might be interested in your app but not in a random bakery which is also a business of a type that is probably more common.

Also VCs take a share which makes them the owner as well but oh well.

You don't. You start small and work you way up while offering whatever collateral you can until you get that big loan. Save up earnings and use a downpayment or buy insurance. That's how business growth works.

There are 10s of millions of business owners in America. Ask any of them how they did it.

I would sincerely love to live in the bubble you do.

It would better to not assume someone's background first.

The total amount of land is relatively fixed on human time scales. Given that, everyone who owns a factory (or any land) does make it more difficult for you to own a factory.

That’s quite a stretch since 95% of the world population lives on 10% of the land. [1] We can also build vertically, and space is a whole new frontier that is seeing lots of interest lately. I don't see this as a serious limitation. Opportunity is endless.

1. https://www.sciencedaily.com/releases/2008/12/081217192745.h...

Oh, I didn’t know you could stack factories on top of each other!

You literally can. Are you being facetious? What's going on with this discussion?

Try to go build your factory on top of an existing factory. I suspect someone will stop you.

Skyscrapers and multistory industrial centers with multiple tenants already exist.

But really? The thing most preventing you from starting a factory today is... because you can't find the land? Alright then.

It’s not about locating land. That’s easy. It’s about controlling the land.

Start by making things where you live right now. In fact that's how many HN users are producing value as we speak.

Finding and controlling land to expand your business is not a serious limiting issue. You have effectively infinite headroom before you need to worry that you can't own a factory on Earth because too many other factories already exist.