Big tech, knowledge predation and the implications for development: Innovation and Development: Vol 12 , No 3

ABSTRACT

This paper focuses on tech giants as active drivers of a phase of globalization characterized by growth in digital services trade combined with a general shift to intangible assets. By analysing how Google, Amazon and Microsoft organize their innovation activities, we show that they continuously monopolize knowledge while outsourcing innovation steps to other firms and research institutions. The paper compares science and technology collaborations with patent co-ownership suggesting knowledge predation from those other organizations. We also highlight that selected tech giants combine the collection of innovation rents with rents from exclusive access to data. We, therefore, refer to tech giants as data-driven intellectual monopolies, each organizing and controlling a global corporate innovation system (CIS). Intellectual monopolies predate knowledge (including data when they are data-driven) from their CIS that they turn into intangible assets. The paper ends with reflections on the implications for innovation and development.

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Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 In fact, we analyze Alphabet, Google’s parent company. However, since the company is still known after its main business, Google, we use Google to refer to the overall holding.

2 The article takes inspiration from recent attempts to integrate insights from the innovation system literature and the global value chain literature (Fagerberg, Lundvall, and Srholec Citation2018; Jurowetzki, Lema, and Lundvall Citation2018; Lema, Pietrobelli, and Rabellotti Citation2019).

3 There is a growing literature that refers to these developments as reflecting a move toward a platform economy or platform capitalism (see for instance Cusumano, Gawer, and Yoffie Citation2019; Montalban, Frigant, and Jullien Citation2019; Srnicek Citation2017). The ownership of digital platform is important for GAFAM dominance. But the basis of their lead position goes beyond. For instance, it draws upon tight collaboration with academic research institutions, and in some cases with US government agencies. And some of their products follow the typical GVC structure. This is the case of iPhone for Apple and in general for the handsets offered by GAFAM as well as Kindle for Amazon. Finally, these companies’ innovation strategies and success also rely on IPR and strategic acquisitions.

4 https://www.forbes.com/powerful-brands/list/ last accessed November 28, 2019.

5 https://www.theguardian.com/technology/2020/feb/03/amazon-kindle-data-reading-tracking-privacy.

6 https://www.microsoft.com/en-us/microsoft-365/government.

7 https://www.nytimes.com/2020/02/13/technology/amazon-jedi-pentagon-contract-microsoft.html.

8 https://aws.amazon.com/pricing/.

9 https://www.reuters.com/article/amazon-cloud-idUSN1E7A727Q20111109 last accessed February 27, 2019.

10 https://www.nytimes.com/interactive/2019/03/10/technology/internet-cables-oceans.html.

11 https://wikileaks.org/amazon-atlas/map/ https://azure.microsoft.com/en-us/global-infrastructure/locations/ and https://www.google.com/about/datacenters/locations/.

12 https://www.technologyreview.com/2015/09/21/10487/why-americas-top-mental-health-researcher-joined-alphabet/.

13 https://www.nature.com/news/why-biomedical-superstars-are-signing-on-with-google-1.18600.

14 https://www.businessofapps.com/guide/app-stores-list/.

15 https://news.microsoft.com/2018/06/04/microsoft-to-acquire-github-for-7-5-billion/.