Europe Must Nourish Its Startups

Europe's newfound muscle in software proves that Continental technology companies can compete in global markets. But French, German, and other governments deserve no credit. Policymakers wasted tens of billions of dollars over the last 15 years pumping up big national corporate champions that stumbled badly. They did little to cultivate smaller, nimbler companies with better products. European business culture is also profoundly anti-entrepreneur. Banks don't loan to small, promising companies, and industry won't buy from them. Even if startups manage to cobble together private funding and a few customers, politicians levy punishing taxes on them. The result: Europe lags in the global technology race despite its strong science and highly educated population.

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