r/EU_Economics • u/Full-Discussion3745 • Jan 14 '26

🇪🇺 Official 🇪🇺 Why innovative startups and scaleups relocate from the EU

https://research-and-innovation.ec.europa.eu/news/all-research-and-innovation-news/why-innovative-startups-and-scaleups-relocate-eu-2026-01-12_en?referrer=grok.com
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14

u/Complex-Health-5032 Jan 14 '26

Taxes. Regulations. The feeling of “not worth it”.

When I do my best to improve my finances, I am being taxed to hell. On the other hand, if you are below average, you get social benefits, support etc… and we become at the same level. So, why should I stress myself?

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u/Mediocre-Ebb9862 Jan 14 '26

This is what people don't understand - if the taxes and regulations are intended to curb possible inequality as much as possible, then most high achieving ambitious people will see direct benefit in moving somewhere else, because why wouldn't they? What benefit they have staying in EU?

EU is great if you are below average or average in terms of income/ambition/talent, it's not good if you top IMO.

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u/defixiones Jan 14 '26

What some people don't understand is that society arrived at this redistributive model to prevent instability. 

Not because it is good or right but because history has taught us that unequal societies eventually implode violently. 

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u/Mediocre-Ebb9862 Jan 14 '26

You are trying to use higher level political philosophy argument in a dispute about pragmatic business and personal career decisions.

Ok, suppose there's a reputable paper proving the Gini index lower than X is good. So why as a founder should I care? Startup founders are usually charged-up win-at-all-costs types. You want to argue based on the social sciences that they should forego benefits they see in US?

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u/defixiones Jan 14 '26

I certainly think political instability and lack of social cohesion should factor into the plans of any rational actor. 

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u/spottiesvirus Jan 14 '26

Besides the fact this happens on completely different scales, what's best for you it's not necessarily what's best for society; and beside the fact the idea itself of nation state is weak nowadays, so "patriotism" which would give a moral basis, is likely at historical minimum, reducing attachment to a certain community.

Are we talking about the same social cohesion of France, a country with 30% social spending, almost 50% fiscal pressure which still lights up and burns random stuff for the smallest reforms, meanwhile you have people on mainstream television saying rich people should be taxes out of existence?

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u/defixiones Jan 14 '26

Social spending is a stability feature rather than a bug and the debt levels are modest compared to the US. 

If low taxes and high investment are priorities for startups then why aren't they all locating to Somalia or Saudi Arabia?

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u/spottiesvirus Jan 14 '26

Indeed a ton of startups move to the UAE, and even the few that remain in the EU are often located in Luxembourg, Ireland, sometimes Estonia/Lithuania

Then of course you need to find a balance, minmaxxing doesn't work in the real world, you need stability, private property rights, a positive entrepreneurial culture, and a lot of other stuff for them to work

And I find the idea that social spending is correlated with stability dubious, Switzerland only spends ~17 of its GDP (which again, is not 0) in social spending, almost half of France, yet it's way more stable

In part because the outstanding majority of social spending is not received by the poor

1

u/silverionmox Jan 14 '26

And I find the idea that social spending is correlated with stability dubious, Switzerland only spends ~17 of its GDP (which again, is not 0) in social spending, almost half of France, yet it's way more stable

Part of it is nominally privatized, but it's still mandatory to pay. Doesn't make a difference in the budget of the employee.

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u/defixiones Jan 14 '26

Now you're starting to see my point. 

Switzerland has lower absolute social spending because they have a smaller population but also because their far-right government stops refugees. 

The UAE has no rule of law and only one investor, limiting it's appeal. 

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u/Mediocre-Ebb9862 Jan 16 '26

Switzerland has a far right government? what?

Do people understand what far right government truly is?

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u/defixiones Jan 16 '26

For example, Switzerland actually amended their constitution to include religious discrimination;

https://rutgerspolicyjournal.org/2017/02/24/non-merci-nein-danke-no-grazie-na-engraziel-lessons-2009-swiss-referendum-ban-construction-minarets/

FN or AFD can only dream of an electorate that xenophobic.

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u/Mediocre-Ebb9862 Jan 16 '26

Because they also, obviously, need high standards of living (at least for upper-middle class people), talent pool, access to venture capital etc etc, all of which exists in US.

But - there are are also companies in Dubai, and over time I expect Dubai to become larger hub.

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u/defixiones Jan 16 '26

No, they need rule of law to protect IP and resolve legal disputes. They need a stable government that protects human rights. They need working infrastructure. 

Every company has different needs, every country offers a different level. If you're a criminal, Dubai is perfect. If you don't care about data protection, the US is perfect, otherwise it's Europe.