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Here’s a graph I’m not happy with:
© Deutsche Bank
Deutsche Bank said it was inspired by the European Union’s competitiveness report published a few weeks ago. Here is the relevant part of Mario Draghi’s foreword:
First, and most importantly, Europe needs to radically refocus its joint efforts on closing the innovation gap with the United States and China, especially in advanced technologies: Europe is stuck in a static industrial structure with few start-ups disrupting existing industries or developing new engines of growth.
In fact, no EU company with a market capitalization of over €100 billion was founded from scratch in the past 50 years, while all six US companies valued at over €1 trillion were founded in this period.
This lack of dynamism is self-fulfilling.
Note the careful wording: “Founded from scratch” does not include companies like AstraZeneca (founded in 1999 with the merger of Astra and Zeneca).
However, both Draghi and Deutsche Bank are wrong. Here’s another graph:
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Displays all constituents of the Bloomberg World Large- and Mid-Cap Indexes, ordered by inception date (where available). All countries and regions are clickable.
Obviously, when trying to estimate company incorporation dates, incorporation dates are less robust than Deutsche Bank’s finger-pointing approach: for example, a lot happened before Saudi Aramco was even filed for commercial registration in 2018; Shell was clearly not incorporated in 2002.
Still, the incorporation date is enough for a quick fact check. The key points are:
PDD Holdings, a US-listed company that owns e-retail platforms Temu and Pinduoduo, moved its corporate registration from China to Ireland in May 2023. The company was founded nine years ago and now has a market capitalization worth €140 billion, meeting both of Draghi’s criteria.
Hooray for PDD, the future of innovation in the European Union.
Further reading:
— The mysterious rise of the Chinese e-commerce giant behind Temu (FT)
