Many people have remarked on the differences in culture between the people of the United States and their counterparts in the European Union. While they share the same cultural roots, people from Europe and the United States often see things quite differently. From opinions about organized labor to views on money and investing, Europeans have a different way of looking at the world.
Those differences are reflected in the startup cultures of the two regions. Many people have remarked on the seeming advantages United States residents have when starting and growing a business, and on how relatively difficult it is to get a new firm off the ground in Europe.
While some of those differences are no doubt overblown, others are legitimate. Compared to their counterparts in the European Union, men and women in the United States tend to be more willing to take risks, even if there is a good chance those risks will not work out favorably. Europeans are often more risk averse, choosing the security of a steady paycheck over the uncertainty of launching a new startup.
The ability of educational institutions to exploit the intellectual capital they are given is another area where residents of the European Union and the United States differ. Throughout the centuries, colleges and universities in the European Union have been very good at providing a quality education to their students, but they have been unable to foster the same kind of risk-taking culture that is so common in the United States.
The fact that so many top colleges in the United States are located in or around Silicon Valley is just one example of how cooperation between businesses and educators can nurture new startups and allow students to pursue their ideas. Three of the most widely respected institutions of higher learning in the U.S. – Stanford, Berkeley and the California Institute of Technology, are all a stone’s throw from Google, Facebook and other giants of the Silicon Valley scene.
That proximity means that many heavy hitters in the Silicon Valley industries hold important posts at local colleges, helping to influence the next generation of entrepreneurs and providing the kind of mentorship and experience that is so important to getting a new business venture off the ground.
To date the European Union has not enjoyed this same level of cooperation between the corporate world land the colleges and universities that educate the next generation of workers and business owners. The culture that makes it so common for U.S. executives to teach at major universities is largely absent in European culture. European universities often hold the business world at arm’s length, focusing instead of traditional ideas of education and with much less focus on entrepreneurship and startup culture.
The close relationship between corporations and educational institutions that exists in the United States has another important benefit for startups. That culture of cooperation provides the financial capital entrepreneurs need to get their new ventures off the ground. It is no accident that so many Silicon Valley companies were started by young people still in school. The combination of intellectual capital on the part of the students and financial capital on the part of angel investors and successful business people creates a virtuous cycle and helps fund the next generation of startups.
There is some evidence the European Union in general, and The United Kingdom in particular, is starting to close the gap in the funding arena. In particular, the United Kingdom is home to some of the most generous angel investors. These angel investors tend to be younger than in generations past, and a good portion of those investors are young women.
The fact that capital and individuals can move freely across the borders of European Union countries may accelerate this closing of the financial investment gap between the EU and the U.S. The fact that money can move freely from angel investors in the United Kingdom or Germany to startups in France and Belgium is expected to foster new startups, and over time the changes may further close the startup gap between Europeans and their counterparts in the United States.