This article about Xavier Niel and the current LeWeb conference recently caught my attention, because to me it signals a new fight between Paris and Budapest. Which capital city will also claim the title of startup capital of Europe?
Way back in June, I sat in on a talk with the Hungarian Minister of State for Economic Strategy, Mr. Zoltán Cséfalvay. (You can watch the hour-long discussion here.) He explained that the goal of current economic policy in Hungary is to entice companies to set up shop in Budapest and other major Hungarian cities. Incubators and helpful legislation make it a low-cost environment for young businesses—not to mention that Hungarians are some of the best educated people around.
This is incredibly important to Hungary for broader political reasons. IMF and EU pressure on the nation was only recently lifted, once the budget deficit dropped below the 3% threshold; Hungary only managed to make that happen through some tricky, one-time-use maneuvers and severe austerity measures. In order to stay under that 3% threshold, the nation will have to increase its income. Expenses have already been slashed to the bare necessities.
So, in one corner, we have a nation as a whole that has been vying for position as startup-company leader—and sees the status as an only-hope kind of deal. In the other corner, we have France, already “the fifth-largest economy in the world” (according to Niel, as quoted here), trying to stay that way through the efforts of a few companies and billionaires.
If I had any money to bet, I’d be backing Hungary. The Central European nation has a history of producing talented science and technology innovators, whereas in Western Europe they are scrambling to train people to fill current positions. It offers lower-cost options for location, production, and staff than a Euro-based nation can. And it’s more invested in the startups’ successes, because of the immediate benefits that could have for the nation as a whole.
What do you think? Have you heard much about the Hungarian startup scene? Or the French one? Will having a “startup capital” benefit new companies?