International -- Readers Report
U.S. VENTURE CAPITAL IS WELCOME IN EUROPE (int'l edition)
As someone who runs a European startup Internet company with one of the most heavily trafficked sites in Europe, I agree with Hasso Plattner's observation that "while the Europeans wait for a product, the American market throws money at hype. That's how companies get started" ("The 21st century economy," Cover Story, Aug. 24-31).
The European and American approaches to business and technology are decidedly different. All the European companies mentioned are already large, established companies, whereas a number of the U.S. companies were startups, which is where innovation comes from, after all.
While it is true that Europe is beginning to participate in the technology revolution, it is predominantly the large companies that are involved. This is unfortunate, as there is no shortage of entrepreneurial talent in Europe, merely a shortage of the resources and support required to nurture startups. At this point, many Europeans are having to relocate to the U.S. to get their ideas off the ground. A sad loss for Europe, a major gain for the U.S.
Currently, one of the major constraints facing European entrepreneurs is the lack of true venture capitalists in Europe. Most are VCs in name but not in practice, preferring safe deals, management buyouts, and leveraged buyouts. There appears to be a distinct lack of vision. I welcome, as do many others, U.S. venture capitalists setting up shop in Europe. A vision in itself.
LondonReturn to top
IN JAPAN, LACK OF INNOVATION WAS NOT THE PROBLEM (int'l edition)
There can be no objection to the argument in "The innovative society" (Editorials, Aug. 24-31) that nations can rise and fall as they try to adapt new technologies. But you are wrong in applying this concept to Japan.
First, Japan's decline is supposedly attributed to its inability to adapt to new technologies. What a bad joke this is. Economists agree that current stagnation in Japan stemmed from the burst of economic bubbles. Many of them quickly add that the bubbles were caused by unreasonably low interest rates forced on Japan by the U.S. at the time of the Plaza Accord. The simple fact may be that despite many efforts by Japanese businesses to develop and use new technologies, they couldn't overcome the aftermath of the enormous, and admittedly stupid, economic bubbles we had.
Second, Japan is assumed to have turned to a beggar-thy-neighbor policy of currency devaluation, unable to adapt to information technologies. This is nonsense. In a country such as Japan, where free flow of capital is assured, a currency devaluation "policy" can never be plotted. Rather, it is more likely that U.S. traders and fund managers played with the yen to lower its value.
Funabashi, JapanReturn to top
COMPARING PRICES ON THE NET: CAVEAT EMPTOR (int'l edition)
"A new chapter for Amazon.com" (American News, Aug. 17) and its plans to become an E-commerce destination glossed over the fact that all of this growth won't necessarily be good for consumers. Amazon's purchase of Junglee, an Internet comparison-shopping company, could actually raise prices. The products that Amazon sells (currently books and CDs) are unlikely to be included among the categories that consumers will be able to comparison-shop.
A similar situation occurred earlier this year when Excite acquired Netbot, another Internet comparison-shopping company. The first thing they did was to remove the ability to comparison-shop for books and CDs. According to Excite, these shopping categories were removed as a result of contractual obligations.
Before Excite's purchase, the Netbot agents would scour dozens of sites looking for the best price for a book. Now, Excite allows consumers to search only one bookseller, its partner Amazon. A similar situation exists in other categories. Consumers need to look carefully when a site says it can help find a good price. That bargain might not be as good as it is made out to be.
BostonReturn to top