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The unprecedented developments in information and communication technologies of our age, with artificial intelligence at the forefront, have not brought about equally impressive progress and prosperity. Quite the opposite, we see cemented industrial and labour stratifications. Regarding value captured from digital technologies, China comes second after the US and ahead of a lagging Europe, but the perpetuation of core-periphery structures stays untouched.
At the root of Europe’s sluggishness lays the disconnection between technological change and progress. All sort of knowledge are increasingly appropriated and turned into intangible assets by a few corporations that exert sustained intellectual monopolies. This curtails technological diffusion stifling complementary innovations that could distribute part of the benefits of technological change.
This widespread dynamic is on steroids in the tech sector. While Europe produces frontier AI models, a handful of US and Chinese Big Tech companies capture the bulk of the associated profits. A comparison between scientific publications and patents illustrates this point. While Alphabet (Google’s parent), Amazon, and Microsoft co-author between 80 and 90% of their publications, they only share ownership of between 0.1 and 0.3% of their patents. Data on leading AI conferences further highlights that these companies control the whole AI field.
Big Tech are also prominent venture capital investors. By October 2023, Alphabet was among the top 5 investors of 859 start-ups. The figure was 590 for Microsoft. They steer research and development at these companies and get privileged access to knowledge and talent. Microsoft’s backing of OpenAI since 2019 is a case in point.
As AI start-ups assume the risks of developing a frontier technology, Big Tech retains control of the field and reaps the profits. Start-ups’ AI models only make sense integrated with other knowledge modules that are under control of Big Tech, from freely harvested data to the world’s largest concentration of compute power. Big Tech also monopolises code coproduced with scholars and developers to train AI models and turn them into marketable products. They offer all these digital technology pieces in their clouds. Amazon, Microsoft and Google possess over 65% of the world’s cloud computing business.
Chat GPT sensation has accelerated the adoption of AI and with it the use of these giants’ clouds. Cloud services are technologies sold as black boxes. This begets long-rung technological dependence on Big Tech for all sorts of firms, from small developing companies to other leading corporations from the most diverse industries. Social and economic progress will remain undermined unless these extreme forms of intellectual monopoly are dismantled.
Dr. Cecilia Rikap is a Head of Research and Associate Professor in Economics at the UCL Institute for Innovation and Public Purpose (IIPP). Cecilia’s research is rooted in the international political economy of science and technology and the economics of innovation.
Technology, Employment and Wellbeing is a new FES blog that offers original insights on the ways new technologies impact the world of work. The blog focuses on bringing different views from tech practitioners, academic researchers, trade union representatives and policy makers.