Open goal

A decade ago, bankers were not merely the masters of Davos, but the ‘masters of the universe’. No one calls them that any more. It is a mark of how far the global economy has shifted that the market capitalisation of Goldman Sachs was this week overtaken by that of Netflix, the online entertainment company. The world’s five largest companies are now all in the field of technology and the internet: Apple, Google, Microsoft, Amazon and Facebook. Ten years ago, none of them made the top five: the masters, then, were Exxon, Walmart, China National Petroleum and the Industrial and Commercial Bank of China.

We are in a period of unparalleled innovation, where ideas rather than large amounts of capital or manpower can create (and fell) commercial giants in a very short space of time. But one other factor unites the top five high-fliers of the corporate world: they are all American. And it is not just the top five. A decade ago, there were 35 US companies and 41 European in the top hundred. Now 55 are from the US, and just 22 from Europe. The emergence of China as an economic superpower is one of the great stories of our age, but so too is the great progress of the US in the digital sphere. And America will continue to thrive this year, thanks to dramatic tax cuts passed by Congress, which show its faith in the force of innovation.

As American leaders realise, technology companies need freedom, not protection, in order to thrive. It is because of sheer innovation that the likes of Apple, Microsoft and Google have grown so large and powerful. It could have happened anywhere, so why did it happen in America? Or, more to the point, why not in Britain? Rather than worry about whether Goldman Sachs might move to Frankfurt, why don’t our leaders think about how the next Netflix can be created here?

The EU’s main reaction to the development of search-engine technology has been one of panic in the face of American innovation: our continent has produced Spotify, but not much else.