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What’s the incentive for companies to pay European devs more?

Ability to attract and retain talent better than their peers?

Alternatively: What's the incentive for firms in the US to pay high wages?

Managers in US software companies base their seniority on experience in software engineering. Up-valuing software engineers also up-values their own position.

Most large employers of engineers in Europe are rather old industrial companies. Management generally do not have software engineering backgrounds.

If they could compete with American companies to get better developers they could build move valuable companies.

I’m pretty certain that lack of technical talent is not one of the factors contributing to the relatively fewer numbers of large European tech companies.

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