Dane here. Europeans have a different appetite for risk. Venture funding is 100x harder to get in Europe, meaning far less dynamism in start-ups and far less innovation. Sweden and Denmark buck the trend a little, but it's still a different league.

Why is funding harder? Culture and laws we created as a result. We're far less accepting of things like leverage M&As, options, flexible employee remuneration and conditions (especially for start-ups), etc. VCs therefore need to clear a far higher bar to mitigate risk, meaning only the very best proven ideas receive funding.

Further, investors tend to prefer lower, but more stable returns. There is much less appetite for moon-shots. I could speculate that this is partly driven by the tax structures. Why risk $50M if you know that 60% of the rewards would be taxed? You would use a much more conversative risk ratio, preferring 5% returns but very low risk. This extends to individuals, too. Why start a business when most of the rewards from the considerable risk will be taxed? Especially given the onerous business laws.

Denmark and Sweden are notable standouts. Our laws make it easy to start businesses, operate, and fire workers as needs change. However we still have very high taxes.

There is one final thought: most people I know do not aspire to become Ferrari owners with five mansions. We aspire to happy and healthy families with good friends, good wine, and cozy holidays. If this is one's aspiration, risking their financial stability for something they don't care about would not be very common. Danes who do aspire for the Ferrari lifestyle leave for the US.

Not to look a gift horse in the mouth, but it's always been puzzling to me why American tech wages were so high.

Because America is the innovation capital of the world.

I know that sounds like corny and biased American exceptionalism, but I think it’s just objectively true.

Other countries can have vastly superior government policy, and that shows up in significant ways (like Denmark having an even higher productivity than the U.S.), but nobody has played the productivity game at as big a scale as the U.S. has, and that’s sort of just an insurmountable advantage for the time being.

NVIDIA, Apple, Amazon, Meta, Google—-I could go on for a very, very long time. Those companies alone are going to create heavy competition within the tech sphere, and add on top of that Baumol’s cost disease from every other big U.S. industry, and you get the current situation.

No other country has the behemoth of capital and opportunity like the U.S. has. This will naturally have a big influence on things.