I've thought a lot about this whole conundrum and I'm fairly certain you and Yglesias have hit the nail on the head. The taxes in Europe aren't the real deal breaker, especially as California has quite high taxes yet leads the US. It's the labor laws and the approach to risk taking. Labor laws are likely the worst offender.
On the risk taking, It's purely anecdotal, but startups in Spain told me years ago that the investors would never invest in them again if they fail.... That mentality is detrimental to high growth, high risk startups like tech companies. I'm not sure how to fix investor mentalities, but it's another factor.
Daniel, your second point is more than anecdotal. In Switzerland, we have far looser labor laws than in our neighboring countries. Long notice periods, yes (three months is standard; six months not uncommon), but otherwise it is "employer-friendly," fairly easy to hire and fire.
Risk taking? No. It starts in the schools, where children are encouraged to choose a less-strenuous path and earn higher grades than to try a more challenging track. It is better to not try than to risk the chance of failure.
Bankruptcy is an expensive and never-ending process. An entrepreneur is not personally responsible for debts of a legal entity (corporation or limited liability) that fails, but if it is a sole proprietorship the entrepreneur's personal finances are seized to resolve the debt. In all bankruptcy cases, the names of the company director, owners and partners (but not shareholders) remain in the commercial register as linked with the failed company. They may have trouble getting business and personal loans, mortgages, or even credit cards thereafter.
Personal bankruptcy exists legally, but is not at all like in the US. The conditions for declaring personal bankruptcy in Switzerland are extremely strict, and debts not resolved in the legal proceedings *remain active*. Forever. It is not a way to get a clean slate and start over.
I've thought a lot about this whole conundrum and I'm fairly certain you and Yglesias have hit the nail on the head. The taxes in Europe aren't the real deal breaker, especially as California has quite high taxes yet leads the US. It's the labor laws and the approach to risk taking. Labor laws are likely the worst offender.
On the risk taking, It's purely anecdotal, but startups in Spain told me years ago that the investors would never invest in them again if they fail.... That mentality is detrimental to high growth, high risk startups like tech companies. I'm not sure how to fix investor mentalities, but it's another factor.
Daniel, your second point is more than anecdotal. In Switzerland, we have far looser labor laws than in our neighboring countries. Long notice periods, yes (three months is standard; six months not uncommon), but otherwise it is "employer-friendly," fairly easy to hire and fire.
Risk taking? No. It starts in the schools, where children are encouraged to choose a less-strenuous path and earn higher grades than to try a more challenging track. It is better to not try than to risk the chance of failure.
Bankruptcy is an expensive and never-ending process. An entrepreneur is not personally responsible for debts of a legal entity (corporation or limited liability) that fails, but if it is a sole proprietorship the entrepreneur's personal finances are seized to resolve the debt. In all bankruptcy cases, the names of the company director, owners and partners (but not shareholders) remain in the commercial register as linked with the failed company. They may have trouble getting business and personal loans, mortgages, or even credit cards thereafter.
Personal bankruptcy exists legally, but is not at all like in the US. The conditions for declaring personal bankruptcy in Switzerland are extremely strict, and debts not resolved in the legal proceedings *remain active*. Forever. It is not a way to get a clean slate and start over.