America’s tech titans haven’t stymied innovation: They’ve enabled it

Two weeks ago, The New York Times ran an op-ed arguing that leading technology companies such as Google, Facebook, and Amazon have grown so big they must be regulated or broken up. The piece is just the latest bit of punditry to allege these companies are ripe for antitrust interventions, but Jonathan Taplin makes a particularly problematic assertion in the piece, arguing that “it is impossible to deny that Facebook, Google and Amazon have stymied innovation on a broad scale.” Regardless of whether you believe these companies raise legitimate competition concerns, this broad assertion is fatally flawed and reveals a lack of understanding of why these companies have been so successful.

When most people think about the world’s largest tech companies, they think of them from the consumer perspective. Google is the search company, Facebook is the social network, Amazon is an e-commerce company, Apple is a computer company, and eBay runs an online garage sale. The true value of these companies, however, lies in the powerful, transformative platforms they provide that facilitate entrepreneurship and innovation for both large and small businesses and individuals. Together these companies have drastically decreased the cost of creating a business by making accessible technologies and services that previously only the largest companies and startups backed by venture capital could afford.

Launching a business used to be an incredibly expensive proposition. Today, by leveraging the benefits of the internet, launching a company can be far less expensive and much less risky. A startup is no longer required to make the upfront commitment of purchasing on premise computer servers or investing in the local bandwidth necessary to support a business with online access. Cloud computing brings the connectivity to you and lets someone else manage the back-end information technology infrastructure. Platforms, such as Amazon Web Services, Microsoft Azure, other innovations from IBM, Google, and others, allow startups and businesses of all sizes to inexpensively lease access to server space, computing power, and internet bandwidth that they can scale up or down based on their needs.

With ability to share information technology resources, many smaller companies have been created and thriving by leveraging other companies’ successful business platforms. This is known as Platform-as-a-Service (PaaS) — individuals and businesses are given the opportunity to utilize the internet platforms and tools developed by the big guys. Companies such as Amazon, eBay, Facebook, and Google have benefited greatly from their own technology creations, and they allow others to use their platforms too. Understanding how these companies have brought others along with them by giving them access to their platform tool sets is important. The PaaS model allows the smaller companies using the platforms to prosper, not just the parent companies. The success of businesses sharing their platforms for innovation and entrepreneurship through partnerships with smaller businesses and individuals creates a cycle that helps produce more internet driven success stories.

Examples abound — from the world of online advertising to payments and the sale of physical goods. For example, Google and Facebook have built incredibly sophisticated advertising platforms that not only have fueled the successful expansions of their businesses into multidimensional conglomerates, but also helped countless other entrepreneurs. These companies’ data have become the fuel that runs the internet. Before these digital ad networks, businesses threw money into advertising and guessed at where their target audience may be located. Small businesses had limited tools for creating effective advertising campaigns. Now any business owner can take advantage of targeted online advertising with easy access to analytics tools that can maximize the impact of their marketing budgets. These online platforms are an asset to anyone wanting to make a sale, not just advertise their business.

Other shared platforms can help secure a business’s web presence and bring them together with billing and delivery systems run by outside operators that are easily scaled for efficiency, price, and speed. Amazon’s one-click option makes purchasing and delivery easy for anyone selling on their selling platform. PayPal, Apple’s App Store, and the Google Play Store have created trusted payment systems that lower the cost of financial transactions for sellers and help make payments frictionless. For the sale of physical goods, the development of global e-commerce platforms such as Amazon, eBay, and Etsy have enabled countless startups and small businesses to sell their goods all around the world. Pinterest can give people ideas and direct them to websites that can help them bring their ideas to fruition.

We can have thoughtful policy discussions about whether digital platforms raise real competition concerns, but they must be based on a full understanding of the value these platforms provide. It would be difficult to disagree that these companies have not only benefited consumers and smaller businesses by enabling access to revolutionary tools for creation, management, and marketing, but also greatly increased the ease for buyers and sellers to reach each other. To say that these companies have stymied innovation or entrepreneurship on a “broad scale” turns a blind eye to the successes of the internet. They have offered consumers much more choice in products, services, and delivery expediency. They have also given innovators access to ideas and the materials to bring their dreams to reality. By opening their platforms to others, these companies have allowed the little guys to be both partners and competitors, and part of the continuing success of the internet and digital economy.

 
Πηγή: techpolicydaily.com