You said -

> The EU has no viable software industry because there's no real single market to fundraise from and sell into (no single capital market, no single language market, no single regulatory market…

Yes incentives matter. They are not the only factor when figuring out the outcome. Competitive structures, and the type of good being traded has a bearing as well.

Software is not like physical goods. Given the marginal costs of making additional units of software is effectively nil, and that network effects tend to lock users in, you will see the rise of behemoths that shrug off competition.

You see more competition when it comes to startups than a stalwart like Excel or word.

I can of course be wrong - but For major daily drivers type software (Gmail, word, etc.) , the incumbents aren’t going to be moved by simply increasing competition.