2022 could be the year historians declare the death of Big Tech. If so, 2023 should be the year of ‘Small Tech’, where innovation, agility and value creation (the things that allowed Big Tech to get big in the first place) return to our economy through an open, competitive environment with new, fragmented players.
This seems all but inevitable. Meta reported a drop in earnings for the first time since its founding. The industry has laid off more than 88,000 workers (and counting). Most significantly, Elon Musk’s takeover of Twitter has driven many users to niche, specialized alternatives. The genie is out of the Big Tech bottle.
Some say that Big Tech should never have been allowed to get so big. That’s understandable: At more than $1.4 trillion, the five big tech companies in the US have more revenue than the GDP of either Mexico or Spain.
But the real problem isn’t its size, or even its power. The real problem is what Big Tech uses its size and power for, and its effects on our economy and democracy.
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The world’s best coders will be watching the mass layoffs underway in Silicon Valley and realizing that security and earnings are not guaranteed by Big Tech. Some may even be angry that, since those firms bought out so many newer competitors - and prevented new competitors from emerging by controlling so much talent - there are limited opportunities elsewhere.
A small number of the laid off will become the entrepreneurial fuel for the next wave of innovation in tech, something that we need.
According to Dorothy Neufeld, over the last 250 years, we have witnessed multiple waves of innovation that ranged from the Industrial Revolution to green tech. We are currently in the sixth wave and the shortest of them all - AI.
We need as much competition as possible to maximize this wave. We need as much talent out there solving as many problems as possible. We can’t have Big Tech, who for many years now has broken its promise to ‘move fast and break things’, holding us back. You can only move so fast when your revenues are equal to a small country’s GDP, and you can’t break things when your in-house counsel is looking over your shoulder.
Those inside the industry know this needs to happen, almost as much as those outside it: Nearly 80 percent of tech workers believe that Big Tech companies have too much power. 40 percent of those workers believe that they do more harm than good and that major companies like Facebook, Amazon, Alphabet and Apple should be broken up.
But they don’t need to be broken up by the over-reach of regulators. They are already being broken up by creative destruction of the markets.
The next Steve Jobs or Bill Gates is likely sitting at a desk right now getting paid a mid six-figure salary just so they won’t leave and become a competitor to their current employer. I hope - for the sake of that person, and our economy - they are included in the current wave of layoffs.
Apple and Microsoft - the grandfathers of Big Tech - became so successful and changed the entire world because of competition. Steve Jobs and Bill Gates once worked together, but soon parted ways because they aspired to excel their own companies. Their personal rivalry was only matched by their commercial competitiveness.
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In 2022, a young Gates or Jobs is likely to be in the gilded cage of a tech job. They shouldn’t be. They should be out in the market, raising funds for their own ventures, and driving the entire sector forwards.
This is already happening elsewhere. For example, China is set to invest more than a trillion dollars in tech companies and infrastructure in an effort to surpass the U.S. grasp over the industry. Given the proximity of Chinese tech firms to Beijing, this should worry the U.S., more than a plunging stock price.
Big Tech has ultimately let down its users, many of its investors, and alienated regulators and policymakers. Small Tech can provide the sustained growth investors want, and the competition that regulators want.
It is also what our economy - and our national security - needs.
