By John Kell and Alan Murray
November 6, 2015

Earnings season this quarter has underscored the growing chasm between the tech juggernauts – whose growth continues unabated – and other companies – which are feeling the pains of a sluggish and maturing economy. The Wall Street Journal highlights the trend this morning here.

 

As noted on in Monday’s CEO Daily, the current tech disruption has a tendency to create, if not a winner-take-all dynamic, at least a winner-take-most. We are watching that play out in real time, as technology moves from consumer gadgets and social platforms ever deeper into the enterprise. The ability of a business like Amazon Web Services to scale rapidly creates enormous bounty for them, but leaves other companies – IBM, Dell, HPE – scraping over the remains.

 

On Thursday, the Journal’s Greg Ip wrote an insightful column pointing to “mounting evidence” that this gap between the most successful and least successful companies is a driving cause of the growing inequality in the U.S. Ip’s column is worth reading, here.

 

I raised the notion that tech disruption is driving inequality during a session at the Fortune Global Forum earlier this week, prompting quick disagreement from Facebook’s Sheryl Sandberg, and a dramatic outburst from investor Marc Andreesen. “Is this Fortune?’ he asked. “Did I stumble into an International Workers Party conference?”

 

Off-stage, Andreessen moderated, saying his main concern is that a focus on inequality will lead to counterproductive policies. That’s certainly true. History shows penalizing success is easier than preventing failure, and the result can be a receding tide that sinks all boats.

 

But that doesn’t mean the winner-take-most nature of the current tech disruption doesn’t demand our attention – for its social, economic and political consequences.

 

More news below. Share the CEO Daily.

 

Alan Murray
@alansmurray
alan.murray@fortune.com

Top News

Exxon Mobil faces probe

New York’s Attorney General Eric Schneiderman has issued a subpoena against Exxon Mobil, citing possible lies to the public by the oil-and-gas giant about risks associated with climate change. The subpoena reportedly dates back to activities by the company stemming over the last 40 years. It focuses on whether Exxon Mobil warned investors about possible financial risks stemming from society’s need to limit the usage of fossil fuels. Exxon Mobil has rejected the allegations.
Fortune

United CEO to return in 2016

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WSJ (subscription required)

Ackman backs Valeant CEO

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Reuters

U.S. wins Libor rigging case

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Fortune


Around the Water Cooler

Stumpf: Debate is bigger than the rate 

Wells Fargo CEO John Stumpf says he can’t wait for the Federal Reserve to finally get going with the cycle of rate hikes. “If [the Fed] could turn the clock back, they probably wish they could have done it in June, they probably wish they could have done it in September, [and now] they just want to get on with it,” he told Fortune. Stumpf says higher rates will mean more profits – not just for his bank but also for all of his peers. He adds consumers are also in a better position today, as they have been paying down debt and saving more of their paychecks.
Fortune

Goldman accelerates promotions

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Bloomberg

Men’s Wearhouse learns painful lesson

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Fortune

Christie, Huckabee to miss main stage

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Fortune


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