> It is not clear to me what precisely happened, but if someone throws sand into a running machine constantly, you cannot pinpoint the precise grain which stopped it either. They all act together. There is the paper war about everything, delaying important projects by decades; there are the high energy prices; there is a welfare system that may be unrealistically magnanimous and ill-prepared for the graying of the country; there is all the immigration from the Islamic world which cannot really compensate for the dearth of native Germans. But most of all, there is the sort of complacency that kills, and its first warning signs were already visible in the late 1990s.
I think that it's as simple as this: You get what you incentivize.
There are literally dozens of reasons not to start a tech business in Germany. The taxation structure is brutal, funding opportunities are absurdly conservative, true equity in even early-stage ventures is taxed in Byzantine ways to such an extent that companies award virtual equity (VSOP, lol) which is taxed as standard wage income at payout (45%, lol), and I could go on all day. All of that just barely scratches the surface, but I don't want to write you a book.
Put it like this: You've probably heard that from 1990-2020, VC would look askance at an American entrepreneur if he didn't incorporate in Delaware. "You'd have to be pretty stupid to incorporate your business in New York or New Jersey or something," is what they'd inevitably think to themselves. "What's wrong with you, kid?"
...Well, yeah, incorporating in Germany as opposed to literally anywhere else in the EU is 1000x worse than that.
So you got major brain drain from Germany, where anybody with a modicum of ambition moved elsewhere. Most of those who remained are dyed-in-the-wool wagies, who don't mind using fax machines, and want nothing more than to be salarymen at Philips or ThyssenKrupp.
> It is not clear to me what precisely happened, but if someone throws sand into a running machine constantly, you cannot pinpoint the precise grain which stopped it either. They all act together. There is the paper war about everything, delaying important projects by decades; there are the high energy prices; there is a welfare system that may be unrealistically magnanimous and ill-prepared for the graying of the country; there is all the immigration from the Islamic world which cannot really compensate for the dearth of native Germans. But most of all, there is the sort of complacency that kills, and its first warning signs were already visible in the late 1990s.
I think that it's as simple as this: You get what you incentivize.
There are literally dozens of reasons not to start a tech business in Germany. The taxation structure is brutal, funding opportunities are absurdly conservative, true equity in even early-stage ventures is taxed in Byzantine ways to such an extent that companies award virtual equity (VSOP, lol) which is taxed as standard wage income at payout (45%, lol), and I could go on all day. All of that just barely scratches the surface, but I don't want to write you a book.
Put it like this: You've probably heard that from 1990-2020, VC would look askance at an American entrepreneur if he didn't incorporate in Delaware. "You'd have to be pretty stupid to incorporate your business in New York or New Jersey or something," is what they'd inevitably think to themselves. "What's wrong with you, kid?"
...Well, yeah, incorporating in Germany as opposed to literally anywhere else in the EU is 1000x worse than that.
So you got major brain drain from Germany, where anybody with a modicum of ambition moved elsewhere. Most of those who remained are dyed-in-the-wool wagies, who don't mind using fax machines, and want nothing more than to be salarymen at Philips or ThyssenKrupp.
I expect all Germans will agree with me.
When I was young, people in Central Europe considered German and English to be ~ equally practical for your future career. Now they no longer do.
A personal reminiscence somewhat related to digital tech.