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 (AMZN) Web Services to scale rapidly creates enormous bounty for them, but leaves other companies – IBM (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 (FB) 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.
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