It is also a matter of culture. For example cutthroat capitalism is not really a thing in Europe, social capitalism (or soziale Marktwirtschaft) is. Culture plays a huge role in this. Most Europeans have a lower risk appetite since it's not like Europe is swimming in successful, well funded, well advertised startups to set an example for a new generation of entrepreneurs. Most also value personal life too much to be willing to make all the sacrifices a startup would require.
But one of the biggest issues in Europe is that it's not very unified yet. A French startup will launch a French product, not a "European" product. The only way to get buy-in from enough people is to have a multinational startup and product. An initiative promoted by both Germany and France has a better chance since it may appeal to ~150 million citizens.
France has been world-leading in verification, e.g. CompCert and Coq come from INRIA, model-checking was co-invented in France. This stuff is largely language independent. Yet the big sellers of this kind of stuff (e.g. EDA software from Synopsys,
Cadence, and
Mentor) is in the US.
That doesn't invalidate my points. SAP is a market leader and comes from Germany. A lot of leading finetch also comes from Germany or UK. A lot of major antivirus vendors in the Czech Republic or Romania, etc. Berlin, Barcelona, Paris, London are all big IT tech innovation and startup hubs in Europe.
Yet the overall scene is not quite as dynamic as the one on the other side of the Atlantic. Startups never seem to be as well funded or advertised. People take fewer risks here, there's no obvious culture of risking it all to found a startup. The whole ecosystem is not designed around this. Maybe this is changing now but today the market really isn't flooded with local products but rather with products of Silicon Valley. A lot of investments in European startups still come from SV instead of being local. There are some products that are big in one European country but don't really seem to make it over the border and it's probably because Europe is not as unified a marked as it could be.
I agree with most of your points, and the huge unified, and rather homogeneous market is a core advantage of the US in certain product categories. Since you mention SAP:
clearly, SAP is successful in a space where Europe's heterogeneity should be a problem -- different legal systems, different accounting rules etc ... and yet SAP succeeded.
Maybe it was because SAP was founded in 1972, half a century ago, when European decline was not as pronounced as it is in today?
But one of the biggest issues in Europe is that it's not very unified yet. A French startup will launch a French product, not a "European" product. The only way to get buy-in from enough people is to have a multinational startup and product. An initiative promoted by both Germany and France has a better chance since it may appeal to ~150 million citizens.