Europe’s ‘Lost’ Tech $1 Trillion

Date: 03-06-2013
Source: The Wall Street Journal

The annual publication of analyst Mary Meeker’s Internet Trends Report is something of an Internet tradition, providing a rich source of hard data over which much chin stroking will now take place.

Unveiled at the All Things D annual conference, the report shows two slides that stand out in particular for a European tech audience, highlighting just how much value, and how many jobs, have been “lost” in Europe by the families of founders finding the prospect of the U.S. more enticing than staying home; and as a consequence how little European web companies contribute to the global web economy.

In one slide Ms. Meeker, the Kleiner Perkins Caufield & Byers partner, lists 25 leading web companies by their country of origin and 2013 market value. Of the $1.38 billion in market value only an anaemic $20 billion comes from Europe. While Europe comprises just under 11% of the world’s population, the European companies on the list contribute just 1.5% by value. (And $16 billion of that comes from Russia — search engine OAO Yandex and portal Mail.ru Group Ltd. The U.K. retailer ASOS PLC contributes the remaining $4 billion.)

By contrast the U.S. contributed $1.17 billion or 85%. Americans comprise about 4.5% of the world’s population.

The other troubling statistic is the amount of value, and the number of jobs, created in the U.S. by European immigrants. Of the top 25 U.S. public tech companies by market capitalization, 11 were either founded or co-founded by a first- or second-generation European immigrant.

Looking just at first-generation Americans, six companies had founders whose parents left Europe. Taken together those six companies generated $534 billion in market capitalization in the U.S., and in the process generated 242,000 jobs.

If you add in the market capitalization from companies whose founders had at least one grandparent who was European, that is another $516 billion; making a total of nearly a million jobs and more than $1 trillion created in the U.S. from European founders. Is it worth considering how much of that value would have been created if their parents or grandparents had stayed home?

Founders Internet Companies

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