The Fallacy of the Two-Hour Lunch Break

Michael Arrington took a shot at european entrepreneurship at the last Le Web Conference in Paris and manage to infuriate just about every European there judging from the reactions on the web and the fact that a poll taken indicates that they don’t want him back.

First the disclaimers, I was born French, educated in England, worked both in France and in England before moved to the US in 1989, became America in 1999. My bio has a more information about my work history here.

I think Arrington has a valid point but delivered it in a cack-handed way. Europeans seldom take two hour lunches anymore, I think he was just extrapolating from his (brief and sumptuous) experience there as a conference guest.

I also think that you cannot generalize about Europeans, Europe is a collection of countries each with their own systems, laws and cultures. Viewed from the United States it is easy to assume that Europe is an homogenous block. Just as it is easy for Europeans to assume that United States is an homogenous block as well, which it isn’t as I frequently point out to Europeans I talk to. The United States is a collection of States each with their own governments, cultures, strengths and weaknesses. Europe is the same.

The things Arrington should have been pointing out to the Europeans are these:

France is somewhat hostile to entrepreneurs, as it Germany and some other countries. Employment is very rigidly controlled, making it difficult to fire people makes management think twice before hiring people. Employer taxes are high making it costly to hire people, Europeans automate where Americas hire. France is particularly backwards is some respects, limiting the workweek to 35 hours, having punitive tax rates, with a culture of ‘Dirigisme’ where control over the economy (and industry) emanates from the center of power (the government), something that is deeply rooted in the culture of the country, going back to the First Empire under Napoleon, and kept going by De Gaulle (with various revolutions and republics in between).

But when you look to the UK, or Ireland, or Spain, you find a different culture, one which is much more conducive to entrepreneurship. The reasons are diverse, ranging from large scale deregulation (in the UK) and a vast influx of European money (Ireland and Spain).

You need a set of preconditions for entrepreneurship to flourish, fluid hiring and firing practices, a willingness to take risks, an acceptance of failure as a normal part of business, the ability to keeps one’s gains relatively tax free so that they can be reinvested in future business, etc… All things which are hard to find in Europe, and all things which Europeans should press their leaders to deliver.

What Arrington should have been pointing are the differences between Europe and the US, specifically what makes Europe hostile to entrepreneurs and what makes the United States attractive to entrepreneurs. At least then a constructive dialog could be started, as it is there is no real dialog which is a loss to both sides.

Updated – Dec 24th, 2009, I forgot to add this quote from a very recent article in the Economist about a French entrepreneur called Malamine Koné:

Other than that, he has made his own way. “The French system is more rigid, more cautious and less risk-taking than the American one,” he says. “In France, the entrepreneur is afraid of failure.” Airness has succeeded despite the closed French elite, not because of it.

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