America is Still Leading Innovation - Let's Keep it That Way

By Douglas Carswell
November 1, 2021

Tesla is now worth over $1 trillion. Not only is Tesla the first car company in the world valued at over $1 trillion, but Tesla is now worth more than twice the combined total of Toyota and Volkswagen.

Not bad for a car company that was only founded in 2003.

Tesla joins a string of companies, including Apple, Microsoft, Amazon, and Alphabet, worth over a $ trillion (Facebook is not far behind, valued at a mere $914bn.).

What is so striking about these firms isn’t just their astronomical value. It’s the fact that they are all relatively new companies.  Microsoft and Apple were founded in the mid 1970s. Amazon and Alphabet in the 1990s. 

What also stands out is that they are all American.

The largest companies in Europe today – Volkswagen, BP, Shell – were big companies a generation ago. Many of the largest firms in America hardly existed a few decades ago. New, too, is the underlying technology and economic activity on which they are built.

Perhaps any European reflecting on this should ask themselves where their Teslas and Apples are? Or perhaps, more important, ponder what their versions of Bill Gates or Elon Musk are up to? Working in local government, no doubt.

It seems extraordinary that any American politician should want to make their country more European. 

What about Japan? I cannot think of a single significant consumer innovation to have come out of Japan since the Sony Walkman. Japan, which in the 1970s and 80s seemed so promising as a center of innovation and technological advance, has stagnated. Perhaps having an economy dominated by zombie companies, weighed down by debt but sustained by cheap credit, isn’t a recipe for success after all.

America has been the epicenter of innovation precisely because Microsoft, then Apple, were able to compete with IBM. Tesla with General Motors. Dozens of start-ups against AT&T. In Japan and Europe, the equivalents of IBM, GMs and AT&T were able to keep out the competition.

For America the lesson is clear; avoid becoming more European or more Japanese. Keep taxes and regulation low. Make sure that however economically important they might be, no big business is able to rig the market through the rule book. 


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