If technology is supposed to drive the US economy, how come a few key players are allowed to stifle competition in it?
A lengthy interesting article by James Bessen in MIT Tech Review, “How big technology systems are slowing innovation”, highlights the extent to which concentration in the technology industry is stifling creativity and reducing the innovative capacity of environments such as Silicon Valley into little more than a myth.
The article attempts to show how the disproportionate growth of the technological giants and their stratospheric valuations have created an environment where innovation only takes place within these behemoths, which simply buy up smaller players that try to innovate. The only hope for smaller companies that really manage to innovate is to find a relatively unexplored niche, but eventually, if they manage to continue proving the value of their technology or their patent portfolio, they will still end up being bought out.
This unassailable dominance by a few companies generates a power over the market that prevents disruption. Big Tech can devote far more resources to research than smaller companies, and are also able to generate more, vitally important, data. In addition, decades of permissive legislation has encouraged large companies to bring any hint of disruption under control, either by acquisition or by…
