This one quote summarizes the whole point of the article:
> Rather, the sheer difficulty of shedding staff en masse—a reality of corporate life—steers Europe’s biggest companies away from making risky bets in innovative fields.
And then the article goes on to defend that point. It explains the difference in cost here:
> An American firm shedding workers will incur costs equivalent to paying those sacked for seven months and be done with it. In Germany costs amount to 31 months of wages for each employee let go; in France 38 months. Beyond severance pay and sops to keep unions happy, the biggest expense is firms keeping unproductive workers on their books they would rather be rid of. New investments are delayed for years as dismissed employees are gradually replaced. American firms quickly pivot to new moon-shot opportunities; Europeans ones are stuck in the same old mire as they haggle with unions, due often to laws devised nearly a century ago.
There's no economically feasible way to hire someone to build a product that may not succeed in the marketplace and guarantee them lifetime employment. That requires a certain about of clairvoyance about the market and many other variables that go into product development that no one has.
So your position is that there is no economically feasible way in Europe to open an new restaurant, bakery, hair or nail salon, or any other new enterprise. Yet reality shows that somehow such activities exist and keep happening.
Restaurants, bakeries, hair and nail salons are not startups and do not do product development. Their market is known before the business is opened. Running one of those businesses is extremely different than a tech startup, where the risk is from not knowing what the market will be for the product in development.
(And you should know that, given that this message board you caters to the startup crowd, and is sponsored by a company that educates people on how to run a startup.)
I encourage you to read through YCombinator's "startup school" materials to understand the fundamental difference.
> Rather, the sheer difficulty of shedding staff en masse—a reality of corporate life—steers Europe’s biggest companies away from making risky bets in innovative fields.
And then the article goes on to defend that point. It explains the difference in cost here:
> An American firm shedding workers will incur costs equivalent to paying those sacked for seven months and be done with it. In Germany costs amount to 31 months of wages for each employee let go; in France 38 months. Beyond severance pay and sops to keep unions happy, the biggest expense is firms keeping unproductive workers on their books they would rather be rid of. New investments are delayed for years as dismissed employees are gradually replaced. American firms quickly pivot to new moon-shot opportunities; Europeans ones are stuck in the same old mire as they haggle with unions, due often to laws devised nearly a century ago.
There's no economically feasible way to hire someone to build a product that may not succeed in the marketplace and guarantee them lifetime employment. That requires a certain about of clairvoyance about the market and many other variables that go into product development that no one has.