Big Tech: Where do we go from here?

If you ever are asked to teach a course in essay writing, there is a great text, They Say, I Say, that takes a “read and react” approach to public discourse in which the writer first presents what “they” say, and then uses that as context to present what he or she wants to say. Today’s blog will follow this path, reacting to a post on The Last Futurist titled “2021 Prediction: The Anti-Big Tech Movement Will Begin”.

I was attracted to the post because I think it is directionally correct but significantly different from what I believe is actually occurring. My position is grounded in the notion that all ecosystems self-organize to create super-powerful gorillas and then, once they are in place, self-organize to curtail their future power. The reason ecosystems value gorillas is that they create a platform of de facto standards as well as new markets which create business for partners as well as themselves. The reason they seek to curtail gorilla expansion is that, as markets mature, gorillas design out or absorb the very partners they previously enabled, thereby marginalizing future opportunities for shared wealth creation. 

So, my first “read and react” moment was spurred by the word “anti”—which implies antipathy leading to anger. I think this is a feature of the current dialog, but I don’t think it is a useful one, and it leads, as the Last Futurist blog demonstrates, to increasingly strident judgments which strike me as just plain wrong. We’ll see if you agree.

I agree with the opening idea that the K-shaped economic recovery is creating a staggeringly large inequality of wealth that is unhealthy and socially destabilizing. And I do think that is triggering a regulatory response, one which, interestingly enough, the Big Tech CEOs featured in the article all have publicly endorsed (the devil, no doubt, being in the details). Next-generation taxation that redistributes the burden of tax paying is the real force at work here, with regulation being a means to direct and govern this effort. 

Where I begin to part ways with the author is when he states “Monopolies that stunt innovation like Facebook, Google, Amazon, Alibaba, and Tencent (WeChat) really need to be regulated in a totally different way to create a level playing field for the future of innovation.” This claim is staggeringly disingenuous. These companies have innovated more dramatically and more successfully than any of their forbearers. Each created a category and then went on to lead it. And the world has benefited dramatically from social media, search, ecommerce, and the like, with each category serving as a platform for wealth creation at scale. Now, to be sure, we are at that turning point, when the gorilla’s power threatens to overtake the entire system, and so regulation is warranted, but not because it will serve future innovation. It won’t. Regulation never has. But it will serve the economic interests of societies straining to fund a whole range of recovery projects, next-generation infrastructure build-out, reemployment, and social services. 

“Ultimately the backlash against Big Tech will favor Chinese tech innovation.” This is an interesting idea which I had not considered. But the arguments supporting it claim that China is much more innovative than the US these days, and that it why their economy will overtake ours as the world’s largest in the not too distant future. I do believe there will be a “passing of the torch” across the Pacific, with the US yielding to China in much the same way that Europe yielded to the US in the 20th century when the torch passed over the Atlantic. But I do not think it is due to superior innovation capabilities. American culture is much better suited to the agile innovation needed to gestate new categories, and I think we will retain that advantage for the foreseeable future. China’s advantage is they are going to have the largest domestic market in the world, by far. That means global commerce must play an increasing number of away games on their playing fields, just as it had to in the US in the 20th century. Home field advantage is always strong, but in China in particular, I expect it to be mercilessly exploited.

Finally, there was one paragraph in the blog that really did get my dander up. Here it is in full:

In 2021 China’s mainland government is in the process of issuing regulations to rein in the power of tech giants such as Alibaba, Tencent, JD.Com and Meituan-Diaping. It’s taken them long enough given that they actually care about real innovation. In the United States, bloated platforms steal the best talent from startups that are dwindling and unable to compete. Silicon Valley is all but a shell of what it once was. Antitrust regulation was late and the ecosystem is failing badly. Beg Tech failed us and it could lead to the decline of America.   

To paraphrase Luke Skywalker talking to Rey in Star Wars: The Rise of Skywalker, “Impressive—every sentence in that paragraph is wrong.”

I am not sure what regulations are being referred to in the first sentence, but I suspect they relate more to the financial impact of the tech giants’ eyepopping market valuations than to their impact on social welfare. But let that pass. The second sentence just “chaps my hide.” China actually cares about real innovation to the extent that they have systematically plundered US intellectual property for the past several decades. And its first generation of hyper-successful companies were knockoffs of US franchises. To be sure, since then there has been significant original work, particularly in the areas of machine learning and artificial intelligence, but it remains to be seen how much boundaries will be pushed. 

Meanwhile, to call US tech giants “bloated platforms” is weird, given that platforms are intended to be as extensive as they can be in order to support ecosystems that build atop them. And the notion that these companies steal talent is ludicrous since no one working there is an indentured servant. And finally, to propose that startups are dwindling and unable to compete is absurd—just look at the IPO market for the past year for goodness sake! As for Silicon Valley, there are plenty of other centers of innovation excellence in the US to complement and compete with it. The claim that our tech ecosystem is failing is without evidence or merit, and if one chooses to worry about the decline of America, which is always a possibility, there are far more disturbing forces to look into.

That’s what I think. What do you think? 

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