(News Bulletin 247) – In his report on European competitiveness, the former president of the European Central Bank, Mario Draghi, wrote that no company in the European Union with a market capitalization greater than 100 billion euros had been created in 50 years. A fair observation but which must be qualified.

This was one of the most striking findings of Mario Draghi’s report on the future of European competitiveness last month. The former president of the European Central Bank (ECB) emphasized that over the last 50 years, the European Union had not been able to create a group whose market capitalization (the value of all of its shares ) or more than 100 billion euros.

In comparison, all six American companies whose capitalization exceeds 1,000 billion euros are less than fifty years old, he noted.

“For Mario Draghi, this goes to the root of one of Europe’s main challenges: there is too little innovation and, instead, a static corporate structure with little disruption that prevents new drivers growth potential,” said Jim Reid of Deutsche Bank in a recent note.

Is this observation correct? Let’s cut the suspense short: yes. But on condition that you take Mario Draghi’s words literally.

All American groups exceeding 1,000 billion euros in market capitalization were actually created after 1974. However, this is insignificant for Microsoft (1975) and even for Apple (1976). Berkshire Hathaway, a company whose origins date back to the 19th century, exceeded 1,000 billion dollars in market capitalization this summer, but not 1,000 billion euros.

ASML was born in 1984 but….

On the European side, it is appropriate to read Mario Draghi’s prose to the nearest comma. The economist writes exactly that “there is no EU company with a market capitalization exceeding 100 billion euros that has been created from scratch in the last fifty years.”

By “from scratch,” the report refers to “creating a business from the outset as a new entity, rather than through mergers, acquisitions, or spinoffs of established businesses.”

This is where the nuance takes on its full meaning. As Jim Reid notes, the birth of ASML, a Dutch company specializing in photolithography, a key technology for the semiconductor industry, dates from 1984. However, the company has a market capitalization of 265 billion euros, the third largest most important in Europe. But, Jim Reid points out, ASML was actually born from the establishment of a joint venture between the electronics giant Philips and the semiconductor group ASMI (Advanced Semiconductor Materials International).

The creation of the first European group on the stock market, the Danish laboratory Novo Nordisk, dates back to the 1920s. LVMH, the second European group on the stock market, was strictly speaking born in 1987. But it was then a merger between Louis Vuitton, and Moët Hennessy, whose origins date from the 19th and 18th centuries.

According to Jim Reid, the company closest to contradicting Mario Draghi’s observation remains the German professional software specialist SAP, whose market capitalization amounts to 240 billion euros and remains by far the largest in the market. Frankfurt. But the group from across the Rhine was founded two years too early, in 1972, to prove the Italian wrong.

Spotify to change the game?

That said, the Swedish streaming group Spotify was created in 2006. The company remains, admittedly, quite far from 100 billion euros, with a capitalization of 76.2 billion dollars, or around 70 billion euros. But the group is currently operating at higher stock prices and is riding a good dynamic. Spotify shares have gained nearly 101.5% since the start of the year and 152% in one year. So much so that the barrier of 100 billion euros does not seem insurmountable in the coming years.

Obviously Mario Draghi’s observation is not so much intended to take stock of the stock market situation as to illustrate Europe’s difficulty in innovating and bringing out new large companies in recent sectors.

“Innovative digital companies generally fail to scale in Europe and attract funding, resulting in a considerable EU-US gap in later-stage funding,” he writes . The Italian underlines, for example, that the Old Continent’s delay in the cloud (dematerialized computing) should widen.

However, Mario Draghi judges that Europe still has a card to play in generative artificial intelligence, in particular thanks to its important positioning in robotics.

Let us point out in passing that on the CAC 40 too, the companies are relatively old. An Amafi report noted in 2015 that the average age of residents of the Parisian index was around 100 years old. Currently, although Edenred became independent as an independent company in 2010, it was previously (since 1983) a subsidiary of Accor and its origins actually date back to the creation of Ticket Restaurant in 1962.

As for the “young” companies, STMicroelectronics was born in 1987, but this birth resulted from the merger of the semiconductor activities of SGS Microelettronica and the non-military activities of Thomson semiconductors. The Eurofins laboratory was founded in 1987 while Dassault Systèmes was created in 1981 by around twenty engineers. The former France Telecom, Orange, for its part was technically born in 1988. But none of these groups comes close to reaching 100 billion euros in market capitalization, with Dassault Systèmes, the largest, standing at 44 .5 billion euros.