| This June, the British financial firm Wise, with a market capitalization of £10 billion, announced that it plans to move its primary stock-market listing to the U.S. It’s only the latest in a long series of major U.K. companies opting for America. The chip designer Arm Holdings, once based in Cambridge, moved its listing to NASDAQ in New York in 2023, ignoring the pleadings of the British government to stay put. They wouldn’t even keep a secondary listing in London.
But it’s not just London losing out. Stockholm has also lost a string of successful companies to New York. In 2018, the music-streaming platform Spotify made the move; now, it’s the driverless-truck start-up Einride; and the fintech company Klarna is exploring its options in the U.S.. “Should it be a natural law that European tech companies almost exclusively go to U.S. stock markets to go public?” the Swedish Prime Minister Ulf Kristersson asked the Financial Times.
Why are they leaving?
Philippe Aghion is a professor of economics at the Collège de France, INSEAD, and the London School of Economics. Aghion says successful start-ups are facing a number of barriers to growth in Europe. The capital markets can’t rival what’s on offer in the United States, so even though there are plenty of innovative small-and medium-sized enterprises in Europe, they often look to New York to explore their initial public offerings. And it’s not only a lack of capital that’s pushing them westward; there’s also an excess of regulation.
But European policy makers have started to take notice of what’s happening. They’re trying to create a more integrated capital-markets union, strengthen European venture capital, boost basic research funding, and much besides. Still, Aghion says, there isn’t enough happening—and it isn’t happening fast enough: The European Union is too fractured to move with great speed. And so it’ll be up to vanguard countries to go it on their own, leaving Brussels behind … |
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From Philippe Aghion in The Signal:
- “There are very few large European tech companies. That’s in part because of the over-regulation of how data must be stored and how it can be shared. And the whole field of artificial intelligence is currently facing an onslaught of regulation. Excessive regulation, in my opinion, helps large incumbents—companies that have already established themselves and have the resources to comply with the regulations—but it’s a barrier to entry and growth for newcomers.”
- “A few days ago, the French President Emmanuel Macron held a dinner for a group of tech CEOs, including the head of Nvidia, who said, In Europe—especially in France—you are after perfection. In America, we don’t care about perfection—we go for imperfection because we wouldn’t want to miss the chance for something very big. I think that’s very well put. In Europe, we want perfection right away. Which of course makes breakthrough innovation much less likely.”
- “If you look at the papers that have laid the foundations for those breakthroughs, you’ll notice that lots of them are European. Basic research in Europe is really good, in spite of the fact that Europe puts significantly less funding toward basic research than America does. So the problem isn’t so much with basic research as with breakthrough innovations. European researchers enable innovation, but the patents aren’t held in Europe.”
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| The Aviron Victory is the perfect way to stay on track with your fitness goals—no matter how packed your schedule gets.
With more than 1,000 programs to choose from, there’s something for every mood, goal, and energy level. Jump into a quick interval run, explore scenic routes, compete in multiplayer games, or stream your favorite shows while you sweat. |
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| BOOKS / FROM THE MEMBER’S DESPATCH |
| That’s your opinion, man |
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| While the American media’s news cycle has become higher-paced than ever, millions among the American people are turning away from it. According to the University of Oxford’s Reuters Institute, there’s “a clear decline in interest in news” in the U.S. 43 percent of those polled say they avoid some form of the news, and 8 percent follow it either less than once a month or never.
What’s happening? |
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- Russia launched more than 700 drones at targets in Ukraine overnight on Wednesday, yet another new record, as Moscow intensifies its air attacks.
- U.S. President Donald Trump says the U.S. will send weapons to Ukraine—and that Russian President Vladimir Putin is throwing “a lot of bullshit” at him.
- Turkey’s jailed Kurdish leader Abdullah Öcalan, in prison for 25 years, released a video on Wednesday declaring an end to his people’s armed struggle against the Turkish government.
- William Ruto, the president of Kenya, has ordered police to shoot protesters in the legs, two days after officers killed 31 people demonstrating against the government.
- & The airport in Marseille canceled flights on Tuesday on account of of wildfires caused by the ongoing European heat wave.
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See you Saturday … |
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