One Idea to Make Europe Bigger in Tech Is to Pay Employees More

Index Ventures says startups need to give more stock options
Startup employees need more financial incentives in Europe

City workers walk on a platform during the morning rush hour commute at Taunusanlage S-Bahn underground railway station in Frankfurt, Germany, on Monday, Aug. 7, 2017. London could lose 10,000 banking jobs and 20,000 roles in financial services as clients move 1.8 trillion euros ($2.1 trillion) of assets out of the U.K. on Brexit, according to think-tank Bruegel.Photographer: Alex Kraus/Bloomberg

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By Adam Satariano

November 27, 2017 at 12:00 AM UTC

This article is for subscribers only.

Europe isn’t producing the kind of large, globally-influential technology companies like those coming out of the U.S. and China. A perennial question is why?

One reason might be that European startups don’t give employees as much of a chance to strike it rich, according to a new study by the European venture capital firm Index Ventures. While startup employees in the U.S. are often rewarded with stock options -- allowing them to cash out handsomely if a company is sold or goes public -- young firms in Europe don’t offer the same scale of incentives.